SAGO sells mills to UAE investors as part of KSA’s ongoing privatization drive

SAGO sells mills to UAE investors as part of KSA’s ongoing privatization drive
Food security is a key agenda item for Middle East governments. (SPA)
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Updated 08 April 2021

SAGO sells mills to UAE investors as part of KSA’s ongoing privatization drive

SAGO sells mills to UAE investors as part of KSA’s ongoing privatization drive
  • National Center for Privatization is aiming to raise $4bn this year through state asset sales

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


Saudi Arabia’s key role in fight against climate change

Saudi Arabia’s key role in fight against climate change
Updated 46 min 2 sec ago

Saudi Arabia’s key role in fight against climate change

Saudi Arabia’s key role in fight against climate change
  • Aramco has spent billions on research and development into cleaner oil production technologies

DUBAI: Climate change is the big long-term issue of the post-pandemic world, and this weekend we will all be better placed to judge the global state of play when US President Joe Biden convenes the Leaders’ Summit on Climate he promised soon after moving into the White House.

Some 40 leaders have been invited to take part in the two-day event, including King Salman. In a demonstration of the importance Biden puts on the issue, and the impact of summitry drama, the event will be available for global public consumption via livestream.

The aim of the summit is for global leaders to update each other on their progress toward the goals of the Paris Agreements on climate change mitigation ahead of the COP26 (26th UN conference of the parties) meeting in November, when the targets can be adjusted according to the needs of the planet.

Most climate experts accept that there is an urgent need to accelerate the process of reducing greenhouse gas emissions. In Paris, all the nations of the world agreed to reduce emissions, however pollution levels have continued to increase over the past five years.

Even the massive hit to the global economy and transport last year due to the coronavirus disease (COVID-19) pandemic caused only a blip in the rising curve, which is expected to climb sharply upwards this year and next as economic recovery accelerates.

The question — both for the Biden summit and COP26 — is what can be done about it, and this is where Saudi Arabia has a unique contribution to make.

The Kingdom, of course, is the biggest exporter of hydrocarbons in the world, and sits on huge reserves of oil and gas. Its resources have fueled economic development at home and around the globe for decades.

Some people do not appreciate this. The eco-warriors of Europe and North America appear to want nothing at all to do with the most powerful and efficient fuel in history and would like to scrap all further investment in hydrocarbons as a prelude to some green utopia where the streets are crammed with Teslas and all business is conducted via Zoom.

HIGHLIGHTS

• The recent announcement of the Sakaka solar project was a massive step toward the Kingdom’s ambitions in renewables, with the promise of more to come.

• Saudi Aramco already produces the cleanest oil in the world, according to independent scientific studies.

But — and this will probably come as news to Swedish environmental activist Greta Thunberg and her friends — the Kingdom has also been hyperactive in the climate change campaign over the past couple of years. This is the message it wants to reinforce at Biden’s summit.

It pioneered the framework of the Circular Carbon Economy, an integrated intellectual strategy for tackling emissions while enabling economic growth. This was endorsed by G20 leaders at the summit under Saudi presidency last year.

It has committed the Kingdom to satisfying 50 percent of its domestic energy needs from renewables by 2030, at the same time launching a project — the Saudi Green Initiative — to plant 10 billion trees in the country to mitigate CO2 emissions.

The recent announcement of the Sakaka solar project was a massive step toward the Kingdom’s ambitions in renewables, with the promise of more to come.

Saudi Aramco — which already produces the cleanest oil in the world, according to independent scientific studies — has spent billions on research and development into cleaner oil production technologies and more efficient engineering to optimize hydrocarbon fuel usage in internal combustion engines.

The Kingdom has pioneered the use of hydrogen, in “green” and “blue” forms, which some energy visionaries see as the fuel of the future. Saudi Aramco shipped the first ever consignment of the fuel last summer.

Saudi Arabia, similar to the rest of the world, still has plenty of work to do. In particular, along with other participants at the Biden summit, it must refine and adjust its national commitments under the Paris Agreements.

And it must strive to ensure its ambitious measures to combat climate change come through as fully implemented and actionable policies.

It could also take the lead in investment to find an economically viable technology for carbon capture, utilization, and storage, which some experts see as the silver bullet against CO2 pollution.

But above all it must hammer home the point that economic growth, which the world urgently needs after the COVID-19 pandemic recession, can only be fueled by the responsible and sustainable use of the world’s precious hydrocarbon wealth.


Egypt offers treasury bonds worth $1.05bn

Egypt offers treasury bonds worth $1.05bn
Updated 21 min 18 sec ago

Egypt offers treasury bonds worth $1.05bn

Egypt offers treasury bonds worth $1.05bn
  • Move aims to help Finance Ministry clear the govt budget deficit

CAIRO: The Central Bank of Egypt has issued treasury bonds worth EGP 16.5 billion ($1.05 billion), as part of efforts to help the Ministry of Finance clear the government budget deficit.

In a statement, the bank said the value of the first offering amounted to EGP 5 billion for a period of three years, the second offering amounted to EGP 6 billion for a period of five years, and the third 10-year term offering was valued at EGP 5.5 billion.

The government resorted to financing the budget deficit by offering bonds and treasury bills as debt instruments, and government banks are their largest buyers.

Last Saturday, Minister of Finance Mohammed Maait announced that JP Morgan decided to include Egypt in its watchlist for government bonds for emerging markets.

FASTFACTS

• In a statement, the bank said the value of the first offering amounted to EGP 5 billion for a period of three years, the second offering amounted to EGP 6 billion for a period of five years, and the third 10-year term offering was valued at EGP 5.5 billion.

• The minister said that Egypt will enter the index with 14 issues, with a total value of $24 billion.

The minister said that Egypt will enter the index with 14 issues, with a total value of $24 billion.

Nevin Mansour, adviser to the deputy minister of finance for financial policies, expected that Egypt would attract new foreign investments in local treasury bonds at about $4.4 billion over a period ranging from six months to a year after Egypt entered the JP Morgan emerging market index in October or November.

Mansour explained that Egypt will receive a 1.78 percent share of any investments that will be pumped into the index and that the inclusion on the index allows international investment banks to evaluate the performance of Egyptian debt instruments and their trading movements, which will result in attracting new foreign investments.


Toyota to review climate stance as investors turn up the heat

Toyota to review climate stance as investors turn up the heat
Updated 30 min 8 sec ago

Toyota to review climate stance as investors turn up the heat

Toyota to review climate stance as investors turn up the heat
  • The carmaker came under scrutiny after siding with the Trump administration in 2019 in a bid to bar the state of California from setting its own fuel efficiency rules

TOKYO: Japan’s Toyota Motor Corp. signaled a shift in its climate change stance on Monday, saying it would review its lobbying and be more transparent on what steps it is taking as it faces increased activist and investor pressure.

The carmaker came under scrutiny after siding with the Trump administration in 2019 in a bid to bar the state of California from setting its own fuel efficiency rules. Toyota “will review public policy engagement activities through our company and industry associations to confirm they are consistent with the long-term goals of the Paris Agreement,” it said in a statement, adding that actions will be announced by the end of this year.

The automaker also said it will “strive to provide more information so that our stakeholders can understand our effort to achieve carbon neutrality.”

A company spokeswoman, who confirmed that “public policy engagement activities” includes lobbying, was not able to respond immediately to questions about pressure from investors.

Four funds with about $235 billion in assets under management are pressuring Toyota before its annual shareholder meeting in June to draw a line under its lobbying against international efforts to prevent catastrophic global warming.

“This move must not be a PR exercise but instead signal a clear end to its role in negative climate lobbying which has given it a laggard status,” Jens Munch Holst, chief executive officer of Danish pension fund AkademikerPension, told Reuters.

AkademikerPension has “escalated via intense direct engagement” with Toyota after a decade of communicating with the automaker through a third party, Troels Børrild, spokesman at the Danish fund, told Reuters.

AkademikerPension will consider preparing a shareholders resolution to submit at next year’s annual general meeting if “Toyota fails to deliver on its commitment,” Børrild said.

The fund would consider selling its Toyota holding if there is no change, but the spokesman said fund officials did not believe it would come to that.

“Right up until now, the company has repeatedly undermined climate action, from opposing the UK government’s ban on internal combustion engines by 2030 to opposing car fuel economy standards in the US,” Munch Holst said. The Toyota spokeswoman told Reuters that it would need more time to respond to Munch Holst’s comments.

The other investors are Church of England Pensions Board, Sweden’s AP7 and Norway’s Storebrand.

Toyota was among major automakers that supported the Trump administration in its attempt to bar California from setting its own fuel efficiency rules or zero emission requirements.

They have since dropped that support in a “gesture of good faith an to find a constructive path forward” with the Biden administration.

With pressure growing on carmakers to slash emissions, Toyota is also scrambling to produce EVs that can compete globally with rivals’ models.

Toyota this year settled a lengthy Justice Department civil probe into its delayed filing of emissions-related defect reports for $180 million.


Oilfields Supply Center to invest $570m in new facility at Saudi energy park

Oilfields Supply Center to invest $570m in new facility at Saudi energy park
Updated 19 April 2021

Oilfields Supply Center to invest $570m in new facility at Saudi energy park

Oilfields Supply Center to invest $570m in new facility at Saudi energy park
  • The OSC base will contribute to Saudi Arabia’s Vision 2030 efforts to localize more of the energy supply chain

RIYADH: Oilfields Supply Center Limited (OSC) is to invest $570 million building a center at the King Salman Energy Park (SPARK).

The OSC base, measuring 1 million square meters and including multiple areas and zones, will contribute to Saudi Arabia’s Vision 2030 efforts to localize more of the energy supply chain.

“OSC is providing pre-built industrial solutions which de-risk the set-up phase for investors and give them flexibility to rent industrial facilities and workshops on demand, in addition to providing a full set of supporting services,” Dr. Mohammad Yahya Al-Qahtani, chairman of the SPARK board of directors, said in a press statement on Monday. “The base is expected to create thousands of jobs in the energy fields.” 

Iqbal Mohammad Abedin, OSC’s director and corporate affairs general manager, said all phases of work on the site were due to be completed by the fourth quarter of 2023. 

Dr. Mohammad Yahya Al-Qahtani

“The creation of an oil and gas supply base on site at SPARK, the region’s only fully integrated energy hub, is another example of how the project complements Aramco’s In-Kingdom Total Value Add Program, which encourages the development of a diverse, sustainable and globally competitive energy sector in the Kingdom,” Abedin said. 

SPARK will be built in three phases. Last month, it announced that 80 percent of the infrastructure work for phase one had been completed, with the remaining 20 percent due to be finished this year. 

The first phase’s near-completion means the allotted land is ready for investment, and 35 investment applications have been approved for companies and their support services. Contracts have already been signed with 23 other companies, the company said in March.

Two strategic agreements have also been signed with the Industrialization and Energy Services Co. (TAQA) and the Arab Minerals Co. (AMCO).

Under the agreement, TAQA is seeking to expand its local operations through the TAQA Industrial Complex, with an initial investment of up to SR300 million ($80 million). AMCO is investing SR260 million to develop a new center in the city.

SPARK is being built on an area of 50 square kilometers. Phase one will be 14 square kilometers, in addition to a dedicated logistics zone and dry port.

OSC is owned by the Dubai government and was established in the early 1960s.


Libya’s NOC declares force majeure on Hariga port in statement

Libya’s NOC declares force majeure on Hariga port in statement
Updated 19 April 2021

Libya’s NOC declares force majeure on Hariga port in statement

Libya’s NOC declares force majeure on Hariga port in statement

TRIPOLI:  Libya's National Oil Corp (NOC) declared force majeure on Monday on exports from the port of Hariga and said it could extend the measure to other facilities due to a budget dispute with the country's central bank.
Daily lost income "may exceed 118 million dinars ($26 million)", NOC said in its statement.
Arabian Gulf Oil Co (AGOCO), the NOC subsidiary which runs Hariga, said on Sunday it had suspended output because it had not received its budget since September. Its Hariga port manager and an oil engineer said production had been reduced.
NOC said the Central Bank of Libya (CBL) had refused to finance the oil sector for months, adding that "this painful reality may extend to the rest of the companies".
Libyan oil output was halted for much of last year after eastern-based forces in the country's civil war blockaded oil terminals, causing NOC to declare force majeure on all exports.
Production resumed after a deal that emerged after fighting ended last summer, but before the major peacemaking effort that has led to a new unity government.