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Cargill, Arasco to create joint venture in Saudi Arabia

Cargill Inc., Minneapolis, and Arasco, Riyadh, Kingdom of Saudi Arabia, are creating a new starches and sweeteners joint venture in Saudi Arabia. The new company will acquire Arasco’s existing corn milling facility in Al Kharj, Saudi Arabia, and produce starch-based products primarily for the Gulf Cooperation Council (GCC) countries of Saudi Arabia, United Arab Emirates (UAE), Kuwait, Oman, Qatar and Bahrain, as well as Yemen, Iraq and Jordan.

This joint venture will mark Cargill’s first operations in Saudi Arabia and build on Cargill’s global capabilities in food ingredients and Arasco’s already proven successful local knowledge and supply chain infrastructure.

“The Middle East region represents the highest growth area for the food and drink industry in the world,” says Cargill executive vice president Frank van Lierde. “The rapidly changing demographics in the region and the growth of consumer choice mean 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.”

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 Saudi Arabia.

“This is an exciting opportunity for both companies to offer our customers—new or existing—a broader portfolio of products and solutions,” says Dr. Abdulmalik Alhusseini, CEO, 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.”

Once the agreement is finalized, Cargill will take a 20% stake in the joint venture, while Arasco will take a 80% stake and management control. The agreement is subject to regulatory approvals.

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