Sale of Saudi Arabia mills set for second quarter

by Arvin Donley
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Saudi Grains Organization
 
DUBAI, UNITED ARAB EMIRATES — The sale process for Saudi Arabia’s flour milling sector will be announced during the second quarter of 2018, according to a report by Reuters.

 The sale is one of the first privatizations Saudi Arabia plans as part of a wide-reaching overhaul of its economy and has drawn interest from some of the world’s largest agribusiness companies, such as Archer Daniels Midland Co. and Bunge Limited, the report said.

The privatization, which involves the potential sale of four flour milling companies by the Saudi Grains Organization (SAGO), presents opportunities for expansion into value-added products with Saudi Arabia, a statement from HSBC Saudi Arabia, which is advising the sale, said.

“It is of note that the milling companies represent a unique investment opportunity in the flour milling sector in Saudi Arabia, the largest economy in the Middle East,” a note from the HSBC said.

The flour mills have a combined daily milling capacity of 12,630 tonnes (wheat equivalent) and process 3.3 million tonnes of wheat annually.

SAGO, the state grain purchaser for Saudi Arabia, is one of the world’s largest wheat and barley buyers. Saudi Arabia has been a major wheat importer since 2008 when it abandoned its plans for self-sufficiency. 

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