Dubai Investor Eyes Takeover of Saudi Flour Mills in Expansionby
Essa Al Ghurair Investment takes 40% stake in Oman flour mill
Saudi Arabia seen privatizing flour mills within two years
Dubai’s Essa Al Ghurair Investment Co., set up by the son of the richest person in the United Arab Emirates, is considering bidding for flour mills that Saudi Arabia is preparing to sell to private investors.
The plants would add to flour mills it has in Oman and Lebanon, Essa Al Ghurair, chairman of his investment company Essa Al Ghurair Investment, said in an interview in Dubai Monday. Saudi Arabia plans to reorganize its nine state-run flour mills into four companies to sell to the private sector, according to the U.S. Department of Agriculture’s Foreign Agricultural Service.
“We are studying this, this is something that could happen in one and a half to two years,” Al Ghurair said. “It’s not so difficult to adapt to the Saudi environment.”
Saudi Arabia’s last wheat farms just stopped production as part of a government effort to save the aquifers supplying them. For the first time, the nation will rely almost completely on wheat imports in 2016, a reversal from its policy of self-sufficiency.
Saudi Arabia’s nine flour mills have combined daily milling capacity of 12,630 metric tons of wheat, and process about 3.3 million tons of wheat a year, according to the USDA’s agriculture specialist in Riyadh.
Essa Al Ghurair is also chairman of Al Ghurair Resources, part of Dubai’s Al Ghurair Investment LLC, founded half a century ago by Essa’s father, Abdullah Al Ghurair whose net worth of $6.7 billion makes him the richest person in the U.A.E., according to the Bloomberg Billionaires Index. The list doesn’t include royalty or rulers where wealth is held by the state.
The younger Al Ghurair’s investment company took a 40 percent stake in a 120 million-dirham ($33 million) flour mill being built at the Sohar port in Oman. The rest is owned by Oman Flour Mills Co. Switzerland’s Buhler AG was selected to provide the equipment for the plant, providing a new type of flour in Oman, Al Ghurair said.
Essa investments is also considering opening a coffee roasting plant in Algeria and has an agreement with India’s Usher Agro Ltd. for a rice mill and beans plant at Sohar port, he said.