Saudi Arabia to start next phase of flour mill privatisation

Dubai: Saudi Arabia’s state grain buyer, Sago, has said it will start the next phase of the sale of its flour mills on Wednesday, which will see pre-qualified bidders perform due diligence and present financial offers.

The sale is one of the first privatisations the kingdom is planning as part of a wide-reaching overhaul of its economy.

It has attracted interest from some of the world’s largest agribusiness firms, including Archer Daniels Midland Co and Bunge Ltd.

Still, Saudi Grains Organisation (Sago) in its statement on Sunday did not name successful pre-qualified bidders from the first phase of the process last year.

Privatisation of the flour milling sector is seen as a litmus test for other large state asset sales to follow.

Large grain market players’ interest in Sago’s mills comes as Saudi Arabia grows increasingly dependent on grain imports.

The kingdom has become a major importer of wheat and barley since abandoning plans in 2008 to become self-sufficient — as farming in the desert was draining scarce water supplies.

But grain industry sources have said the lengthy privatisation process has since discouraged some potential bidders.