Olam, a leading food
and agri-business, acquired a minority stake of 10% of the Saudi flour mill
company with operational responsibility for an equity consideration of SAR 49.5
million ($18.0 million).
The acquisition of one of the flour milling companies tendered for privatisation by the National Centre for Privatization (NCP) and the Saudi Grains Organization (SAGO), has been completed by the consortium, comprising National Agricultural Development Company (NADEC), Al Rajhi International for Investment Company, Ajlan & Bros and Olam International (collectively, the Consortium).
As a member of the Consortium, Olam will participate as the technical partner with a minority stake of 10% in Food Security Holding Company1 (JVCo) and the remaining 90% owned by the other members of the Consortium. Olam will have responsibility for managing plants and operations. Utilising its extensive experience in owning and operating flour mills in West Africa, Olam will capitalise on its know-how and capabilities to achieve best in class efficiencies and profitability.
With the completion of the acquisition, the JVCo owns manufacturing plants in three locations – Riyadh, Hail and Jazan – with a combined wheat milling capacity of 1.3 million metric tonnes and feed milling capacity of 180,000 metric tonnes, which service growing domestic demand.
“This investment supports our strategy to expand our wheat milling footprint in key markets across Africa and the Middle East. Over the past decade, Olam has built a world-class wheat milling business and established itself as a leading miller in Africa. This acquisition is part of our entry strategy into the Kingdom of Saudi Arabia,” said Saurabh Mehra, President of Olam’s wheat milling business. “The JV will allow us to leverage our best-in-class technical expertise while gaining valuable insight into doing business in the country” he added.