The cows of Qatar’s Baladna farm, housed in climate-controlled farms in the desert, exemplify the lengths to which Qatar has gone to resist what it calls an economic “blockade” enforced by its Saudi Arabia-led neighbors.
When the boycott began in June 2017, Qatar responded with sweeping measures, like liquidating one-fourth of its cash reserves to steady the economy and its currency, but it also flew in hundreds of Holstein Friesian cows.
The new herd was part of a plan to establish food security in the event that import routes were blocked — concerns that had seen supermarket shelves emptied in the opening days of the embargo.
Baladna was this week to finish listing 75 percent of the company on the Qatar Exchange, allowing Qatari investors to own part of the Persian Gulf nation’s embargo fightback.
“We were driven to do this by our commitment to provide Qatar with a fresh and steady supply of dairy products,” Baladna vice chairman Ramez al-Khayyat said.
The company now meets more than 90 percent of the country’s fresh dairy needs from its farm 55km north of Doha.
Rows of cows are gently cooled through a system of giant fans and vents that spray a fine mist as they move between feeding and milking barns.
The herd, which has grown to 18,000 cows, is fed hay imported from Europe and the US.
With Baladna’s growth, Qatar is now looking to its nascent dairy industry to play a role in the drive to diversify the economy away from oil and gas.
Baladna stock would initially only be on offer to Qatari individuals and companies, but bosses are still hoping to raise about US$390 million for three-fourths of the company’s shares.
Foreigners would be able to own up to 49 percent of shares from an unspecified future date.
The sale is dwarfed by Saudi Arabia’s plans to list part of oil giant Saudi Arabian Oil Co, expected to be the biggest-ever stock market flotation, but it represents an important landmark for Qatar’s fledgling dairy industry.
The listing would make Baladna “more sustainable, even for the future after the illegal blockade is eased, “ al-Khayyat told reporters.
However, the embargo enforced by Saudi Arabia, the United Arab Emirates, Egypt and Bahrain shows no signs of abating, prompting Baladna to expand its product range to include juices, cheeses and yogurt in the past few months.
The Riyadh-led alliance has accused Doha of backing Muslim militant groups and Iran, issuing a raft of terms Qatar must accept before it will lift the embargo that includes a ban on direct air, land or sea trade.
Doha has strongly denied the allegations and has refused to meet the demands that also stipulate the closure of its flagship state-run al-Jazeera broadcaster.
Qatar, with a population of 2.7 million, has also turned to countries including Turkey, Iran and Morocco to replace supply chains severed by the embargo.
“There’s great interest from strategic investors — they’ve taken 23 percent,” a source briefed on the Baladna initial public offering said.
They include Qatar’s government pension fund and a subsidiary of the sovereign wealth fund, they said.
The Qatari Ministry of Energy and Industry is to hold a “golden share,” allowing it to appoint some directors and veto certain decisions.
Baladna’s founders would hold the quarter of the company not on offer.
The company hoped that the remaining 52 percent of shares would be snapped up in the final days of the purchase window, which closed on Thursday. Trading is to begin tomorrow.
Kuwait Financial Centre KPSC (Markaz) head of research M.R. Raghu said that the company’s growth prospects, “underpinned by strong regulatory support in addition to its discounted valuation,” made the stock an attractive prospect.
“Supportive government policies are expected to put the company at an advantage to competitors,” Raghu said, referring to subsidized land, among other measures.
The Baladna initial public offering, expected to be the only such indigenous offering this year, has been heavily publicized.
Glossy ads have appeared on YouTube showing truckloads of cattle being transported from Qatar Airways Co QCSC cargo airplanes to their vast desert barns.
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