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Jeddah - Yasmine El Tohamy - RIYADH: The Saudi Grains Organization (SAGO) and the National Center for Privatization (NCP) announced on Thursday that the Third Milling Co. (MC3) has been sold to a consortium of UAE investors.
The consortium, which includes Ghurair Investment (AGI), Al Rajhi Holding Group and Masafi, acquired MC3 following a competitive tender process led by SAGO and the NCP.
SAGO will continue to oversee MC3 in its remit as the regulator of the Kingdom’s milling sector and its main importer and supplier of wheat, barley and other grains.
The flour milling sector represents one of the key sectors for full privatization in line with Saudi Vision 2030, and the completion of the acquisition is a significant step in the country’s privatization agenda.
Commenting on the deal, John Iossifidis, group CEO of AGI, said: “The completion of the strategic acquisition of MC3 marks a milestone in the move toward the privatization of crucial sectors, and aligns to AGI’s strategy to support governments as they seek to enhance food security throughout the region.
“We are grateful to the NCP, SAGO and our consortium partners for their trust in our commitment to advancing the development of the grains sector. AGI has a long and proud history in the flour sector, having established Dubai’s first milling company in 1976. We look forward to bringing this experience to Saudi Arabia and leveraging it to spur the growth and diversification of MC3,” he added.
Djamal Djouhri, CEO of Al Ghurair Foods, commented: “Monetizing public assets is a key agenda item for governments across the Middle East, as is food security as they seek to boost competitiveness, product diversity and operational efficiency.
Esmail Al-Sallom, chief investment officer at Al Rajhi Holding Group, said: “This is a historic transaction which is a major step toward the Kingdom’s vision to increase private sector participation in the Saudi economy. Al Rajhi Holding Group aims to leverage on its experience … to improve operational efficiency and performance, drive new product development, enhance distribution networks, increase market penetration, and enrich the overall consumer experience.”
While the valuation of this latest deal was not revealed, Al-Raha Al-Safi Food Co. announced the acquisition of First Milling Co. (MC1) in January for $540 million, a deal also facilitated by the NCP and SAGO.
MC1 is the largest of the Kingdom’s four milling companies, and the sale was also part of SAGO’s planned privatization of Saudi flour mills and grain silos previously owned by the Public Investment Fund, the sovereign wealth fund of Saudi Arabia.
Last month, the Saudi Cabinet announced plans to privatize 16 key industries, including in the environmental, water and agricultural, transportation, energy, industry and mineral wealth, labor and social development, housing, education, health, municipalities, Hajj and Umrah, communications and information technology, media, sports, interior and finance sectors.
“We are working with all the sectors targeted for privatization. Several projects have been recently selected and launched in … health, education, transport, municipalities, environment, water and agriculture and human resources and social development,” Hani Alsaigh, director general of strategic communication and marketing at the NCP, told Arab News.
In January the NCP announced it had raised SR3 billion ($800 million) in revenue from sale of state assets in 2020 and aimed to make approximately SR15 billion or more in 2021
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