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January 23, 2013
COBHAM, United KingdomCargill and Arasco are developing new sweeteners and starches as part of new joint venture in Saudi Arabia. Under terms of the agreement that are still subject to regulatory approvals, Cargill will have a 20% stake in the joint venture, while Arasco will have an 80% stake and management control.
The deal will mark Cargills first operations in the region and build on the companys global capabilities in food ingredients and Arascos proven successful local knowledge and supply chain infrastructure.
The new joint venture company will acquire Arascos existing corn milling facility in Al Kharj and will produce starch-based products primarily for the Gulf Cooperation Council (GCC) countries of Saudi Arabia, UAE, Kuwait, Oman, Qatar, Bahrain, Yemen, Iraq and Jordan.
Plans are to triple production at the Al Kharj plant to meet the growing demand across the confectionery, juice, bakery and catering segments in the region. Glucose and starch production capacities will more than double and the product offering will be expanded to include high fructose corn syrup (HFCS) to serve the growing food and beverage industry in Saudi Arabia.
The Middle East region represents the highest growth area for the food and drink industry in the world. The rapidly changing demographics in the region and the growth of consumer choice means that this joint venture will be well placed to help our customers meet this rapidly developing market," said Frank van Lierde, executive vice president, Cargill. By partnering with Arasco and combining the strengths of both our companies, this joint venture will not only help us create enhanced solutions for our customers but most importantly local solutions."
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