COBHAM, U.K. — Cargill and Arasco have agreed to create a new starches and sweeteners joint venture in the Kingdom of Saudi Arabia. The joint venture company will acquire Arasco’s existing corn milling facility in Al Kharj and will produce starch based products primarily for the Gulf Cooperation Council (GCC) countries of Saudi Arabia, United Arab Emirates, Kuwait, Oman, Qatar, Bahrain, as well as Yemen, Iraq and Jordan. It will be Cargill’s first operations in Saudi Arabia.
Once the agreement is finalized, Cargill will hold a 20% stake in the joint venture, while Arasco will have an 80% stake and management control.
“The Middle East region represents the highest growth area for the food and drink industry in the world,” said Frank van Lierde, executive vice-president of Cargill. “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.
“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,” continued van Lierde.
The companies said they intend to triple production at the Al Kharj plant to meet the growing demand across the confectionery, juice, bakery and catering segments in the region. Additionally, the joint venture aims to more than double the glucose and starch production capacities. The plant’s product offering also will be expanded to include high-fructose corn syrup.
“This is an exciting opportunity for both companies to offer our customers — new or existing — a broader portfolio of products and solutions,” said Abdulmalik Alhusseini, chief executive officer of Arasco. “Through this joint venture, we can expand our facilities more quickly and launch new products, such as HFCS to the Kingdom of Saudi Arabia. We are looking forward to working with Cargill to build and strengthen our existing successful corn milling operations in the Kingdom.”
Founded in 1983, Arasco is an agri-food conglomerate with a workforce of more than 2,200. The company’s businesses include raw materials trade, feed milling, corn refining, broilers production and marketing, farm inputs and services, feed and food phosphates manufacturing, food safety and quality services, and logistical services.