Cargill, Arasco enter Saudi food JV
Riyadh, January 23, 2013
Cargill, a global producer and marketer of food, agricultural, financial and industrial products and service, has announced plans to set up a joint venture with Arabian Agricultural Services Company (Arasco) to produce starch-based products for the GCC states besides Yemen, Iraq and Jordan.
The new starches and sweeteners joint venture will mark Cargill's first operations in Saudi Arabia and will build on its global capabilities in food ingredients and Arasco's already proven successful local knowledge and supply chain infrastructure.
Once the agreement is finalised, Cargill will take a 20 per cent stake in the joint venture, while Arasco will take a 80 per cent stake and also management control, said the US-based company in a statement.
As a first step, the new company aims to acquire Arasco's existing corn milling facility in Al Kharj, it added
"The Middle East region represents the highest growth area for the food and drink industry in the world. The rapidly changing demographics in the region and the growth of consumer choice means that this joint venture will be well placed to help our customers meet this rapidly developing market," noted said Frank van Lierde, the executive VP, Cargill.
"By partnering with Arasco and combining the strengths of both our companies, this joint venture will not only help us create enhanced solutions for our customers but most importantly local solutions," remarked van Lierde.
The JV, he stated, aims to triple production at the Al Kharj plant to meet the growing demand across the confectionery, juice, bakery and catering segments in the region.
"Glucose and starch production capacities will more than double and the product offering will be expanded to include high fructose corn syrup (HFCS) to serve the growing food and beverage industry in the Kingdom," he added.
"This is an exciting opportunity for both companies to offer our customers - new or existing - a broader portfolio of products and solutions," said
On the new venture, Arasco CEO Dr Abdulmalik Alhusseini said, "Through this, we can expand our facilities more quickly and launch new products, such as HFCS to Saudi. We are looking forward to working with Cargill to build and strengthen our existing successful corn milling operations in the Kingdom."
"Going forward, the JV will also pave the way for discovering further opportunities for growth in the region and to support customers with other food ingredient solutions. The joint venture has potential for further expansion in line with customer demand," he added.-TradeArabia News Service