King­dom com­mences pri­vati­sa­tion plan for flour mills

The National - News - - BUSINESS - ALKESH SHARMA

Saudi Ara­bia com­pleted the first batch of its flour milling sec­tor pri­vati­sa­tion through a full di­vest­ment of two of its four milling com­pa­nies to qual­i­fied in­vestors.

The First Milling Com­pany went to Raha AlSafi con­sor­tium for 2.02 bil­lion Saudi riyals (Dh1.98bn), whereas the Third Milling Com­pany was awarded to Al­ra­jhi-Ghu­rair-Masafi con­sor­tium for 750 mil­lion riyals.

Win­ning bid­ders were de­cided on the ba­sis of the “high­est fi­nan­cial bids sub­mit­ted by qual­i­fied strate­gic in­vestors”, said the Na­tional Cen­tre for Pri­vati­sa­tion and Saudi Grains Or­gan­i­sa­tion.

The com­ple­tion of the sale and trans­fer of own­er­ship are sub­ject to le­gal re­quire­ments by the bid­ders.

“The suc­cess­ful sale of the milling com­pa­nies in the first batch re­flects the at­trac­tive­ness of Saudi Ara­bia’s flour sec­tor to in­vestors … the qual­i­fi­ca­tion phase for the sec­ond and fi­nal stage of the pri­vati­sa­tion of flour milling sec­tor will be launched shortly,” NCP and Sago added.

The sec­ond phase will in­clude the sale of the sec­ond and fourth milling com­pa­nies.

The four flour-milling com­pa­nies un­der Sago rep­re­sent an “at­trac­tive op­por­tu­nity” for the pri­vate sec­tor to in­vest in one of the largest flour mar­kets in the Mena re­gion with “high growth rates” and po­ten­tial to en­hance “sec­tor pro­duc­tiv­ity”, NCP said.

Sago is the state en­tity run­ning a port­fo­lio of flour mills and an­i­mal feed fac­to­ries in the king­dom.

Last month, Saudi Ara­bia is­sued a res­o­lu­tion giv­ing four milling com­pa­nies per­mits to pro­duce flour and trans­fer­ring their own­er­ship to the NCP. This was in line with NCP’s role to over­see sales of pub­lic as­sets and forge pub­lic-pri­vate part­ner­ships.

NCP said the trans­fer of own­er­ship will not af­fect the pri­vati­sa­tion that is ex­pected to be fi­nalised by next year.

The flour-milling sec­tor is among in­dus­tries in­clud­ing min­ing, health and ed­u­ca­tion marked by Riyadh for pri­vati­sa­tion un­der the Vi­sion 2030 pro­gramme, which aims to di­ver­sify the king­dom’s econ­omy and re­duce its de­pen­dence on oil.

The pri­vati­sa­tion of Sago, iden­ti­fied among the first govern­ment-con­trolled en­ter­prises as part of Saudi Ara­bia’s pri­vati­sa­tion pro­gramme, re­ceived in­ter­est from in­ter­na­tional agri­cul­tural com­pa­nies such as Archer Daniels Mid­land and Bunge, both based in the US, ac­cord­ing to Reuters.

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