US agribusiness giant Cargill has formed a joint venture with Saudia Arabian food producer Arasco for the creation of starches and sweeteners in the country.
The joint venture company will acquire Arasco’s existing corn milling facility in Al Kharj and will produce starch based products primarily for the Gulf Cooperation Council countries of Saudi Arabia, UAE, Kuwait, Oman, Qatar, Bahrain, as well as Yemen, Iraq and Jordan.
The deal marks Cargill’s first move into the Kingdom and will build on its global capabilities in food ingredients and Arasco’s existing knowledge and supply chain infrastructure in the country, Cargill said.
Cargill will hold a 20% stake in the joint venture, with Arasco taking the remaining share and management control.
The deal is the second for Cargill this month. Last week the company announced it had secured a deal to acquire two animal feed mills from the bankrupt Pennfield Corporation in the US for US$9.8m.