The new JV shall officially be called “Middle East for Food Solutions Co” (MEFSCO) and will produce starch based products primarily for the GCC (Saudi Arabia, UAE, Kuwait, Oman, Qatar, Bahrain) Yemen, Iraq and Jordan market.
Arasco’s existing starches and sweeteners facility in Al Kharj has been acquired by MEFSCO and Arasco will take an 80% share of the JV, along with management control. This agreement is subject to all regulatory approvals.
A ceremony was held to mark the signing of the agreement and was attended by senior representatives from Arasco and Cargill, as well as the US Ambassador in Saudi Arabia H.E. Mr. James Smith.
Speaking at the event, Dr Abdulmalik Alhussaini, Arasco CEO, said, “Since we announced our intention to create this new joint venture on the 23rd January 2013, both Arasco and Cargill have been working to finalise all agreements in order to create the new limited company; Middle East for Food Solutions co. and to secure the success of this exciting new project for the region. This new company will operate individually yet under the administration of Arasco.”
Dr Abdulmalik Alhussaini continued, “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.
Glucose and starch production capacities will more than double and high fructose corn syrup (HFCS) – a completely new product for the Kingdom of Saudi Arabia – has been added to the portfolio. 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. Further investments and expansions in the plant are expected in line with customer demand and to help continue to build a first class starches and sweeteners operation in the region.
“This joint venture, marks Cargill’s first operations in the Kingdom, and builds on our global capabilities in food ingredients,” said Murat Tarakcioglu, Managing Director for Cargill Turkey. “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.”
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.
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.
Dr Abdulmalik Alhussaini continued, “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.”
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