JEDDAH: Saudi Arabia took the latest step in the privatization of the Kingdom’s flour mills with the announcement on Monday of a $540 million deal.
Al-Raha Al-Safi Food Co, consisting of Al-Mutlaq Group, Al-Safi Holding Co., Abunayyan Trading Co. and Essa Al-Ghurair Investment LLC, announced it has completed the acquisition of the First Milling Company (MC-1) for $540 million.
The deal was facilitated by the National Center for Privatization (NCP) and the Saudi Grains Organization (SAGO).
MC-1 is the largest of the four milling companies and is part of SAGO’s privatization plan of Saudi flour mills and grain silos. The company was previously owned by the sovereign wealth fund the Public Investment Fund (PIF).
“The acquisition represents an attractive opportunity for the private sector to invest in one of the largest flour markets in the Middle East and North Africa with high and appealing growth rates, and to further boost private sector productivity and improve product quality,” said Tariq Al-Mutlaq, chairman of Al-Raha Al-Safi Food.
“The company plans to invest in human resources, technologies, and to develop innovative products that address the evolving needs and requirements of our business clients and discerning consumers in Saudi Arabia,” he added.
In September the NCP said that “the flour-milling sector is one of the targeted sectors for privatization under the Kingdom’s Vision 2030 realization programs.”
The sector “enjoys the support of the relevant regulatory and executive authorities led by the Ministry of Environment, Water and Agriculture, Ministry of Finance, and the NCP,” it added.
Privatization of flour mills was one of the first such projects in the Kingdom and is seen as a barometer for the government’s wider privatization goals.