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Cargill, Arasco create starches, sweeteners joint venture in KSA
Published in The Saudi Gazette on 24 - 01 - 2013

JEDDAH – Cargill and Arasco intend to create a new starches and sweeteners joint venture in Saudi Arabia, a press statement Wednesday.
The deal will mark Cargill's first operations in the region and build on the company's global capabilities in food ingredients and Arasco's proven successful local knowledge and supply chain infrastructure.
The new 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 as well as Yemen, Iraq and Jordan.
The joint venture will mark Cargill's first operations in the Kingdom and will build on Cargill's global capabilities in food ingredients and Arasco's already proven successful local knowledge and supply chain infrastructure.
The intent is 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 of Saudi Arabia.
Once the agreement is finalized, Cargill will take a 20 percent stake in the joint venture, while Arasco will take a 80 percent stake and management control. The agreement is subject to regulatory approvals.
“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,” said Frank van Lierde, executive vice president, 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.”
Arasco Chief Executive Officer Dr Abdulmalik Al Husseini said “this new joint venture will build 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.”
As a direct result of the joint venture, the Al Kharj plant will undergo 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.
Glucose and starch production capacities will more than double and the product offering will be expanded to include high fructose corn syrup (HFCS) - a completely new product for Saudi Arabia - to serve the growing food and beverage industry.
“For Cargill, it was important to find a local partner that we had a good working relationship with and a strong cultural fit,” said Murat Tarakcioglu, Managing Director for Cargill Turkey. “We have been working with Arasco for a number of years and are excited to be taking this first step into the Kingdom of Saudi Arabia with them as our local partner.”
Ziyad Alsheikh, President of Arasco's existing starches and sweeteners business, said “this new joint venture will build on the strengths of both companies in order to provide our customers with high quality, local solutions. The combination of our existing local market knowledge and supply chain infrastructure with Cargill's global technical and product development capabilities, will help us to create enhanced solutions for our customers.”
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.
“The growth and future development of this business is great news for the Saudi graduates,” Alsheikh said, adding that “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.” – SG


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