Saudi group ties up with Cargill for sweeteners JV
Riyadh, September 8, 2013
Arabian Agricultural Services Company (Arasco) has signed an agreement with Cargill, an international producer and marketer of food and agricultural services based in the US, to set up its first starches and sweeteners joint venture (JV) in the Kingdom.
This joint venture marks the US group’s first operations in the Kingdom. The new company, 'Middle East for Food Solutions Company (Mefsco)' will produce starch-based products primarily for the GCC region, Yemen, Iraq and Jordan market.
As per the agreement, Arasco will take an 80 per cent share of the JV along with management control.
The company's existing starches and sweeteners facility in Al Kharj has already been acquired by Mefsco, said senior Arasco officials at a ceremony held to mark the signing of the agreement.
It was attended by senior representatives from Arasco and Cargill, as well as the US Ambassador in Saudi Arabia James Smith.
Announcing the deal, Arasco CEO Dr Abdulmalik Alhussaini said “This new joint venture builds on the strengths of both companies, our existing local market knowledge and local manufacturing environment along with Cargill’s global technical and product development capabilities. By building on these strengths we can provide our customer with high quality but locally enhanced solutions.”
The Al Kharj plant is already undergoing the first stage of its expansion in order to triple the capacity of the plant and meet the growing demand across the confectionery, juice, bakery and catering segments in the region, he added.
Glucose and starch production capacities will more than double and high fructose corn syrup (HFCS) – a completely new product for the Saudi Arabia - has been added to the portfolio, revealed Dr Alhussaini.
Due to the importance of this product for the market and in particularly the beverage industry, the significant progress in the project expansion will enable the JV to officially introduce HFCS to the market within a shorter timeframe, said the official.
According to Dr Alhussaini, Arasco will make further investments and expansions in the plant in line with customer demand and to help continue to build a first class starches and sweeteners operation in the region.
Murat Tarakcioglu, the managing director for Cargill Turkey, said the joint venture marks the US group’s first operations in the Kingdom and builds on its global capabilities in food ingredients.
"We had been working with Arasco for a number of years and so partnering with them on this exciting new venture made perfect sense – we knew we could build on our good working relationship and strong cultural fit and the combined expertise of both companies will mean new opportunities for the region," he observed.
Going forward, the joint venture will also pave the way for discovering further opportunities for growth in the region and to support customers with other food ingredient solutions, said Tarakcioglu.
The joint venture will also create more new jobs for nationals, and will give new Saudi graduates the opportunity to undergo intensive training and development programs, as well as technology transfer and international expertise gain, he added.
Dr Alhussaini said the growth and future development of this business is great news for the Saudi graduates.
"We intend to raise Saudization to the maximum possible levels and we look forward to welcoming a number of Saudi graduates, in the engineering and technical fields, to this new company," he added.-TradeArabia News Service