According to a statement by Saudi Arabia’s grain buyer SAGO, the next phase of the sale of their flour mills will start on Wednesday, which will see pre-qualified bidders perform due diligence and present financial offers. In the same Sunday statement, Saudi Grains Organization said that they did not name successful pre-qualified bidders from the first phase of the process last year.
Saudi Arabia plans to transform its economy, and privatization like this one is the first major step of that plan as some of the world’s biggest agribusiness firms like Bunge Ltd (BG.N) and Archer Daniels Midland Co (ADM.N) instantly showed interest.
This privatization is something like a test for other state-owned businesses to follow and see if it is successful.
Reuters reported that large grain market players interest in SAGO’s mills comes as Saudi Arabia grows increasingly dependent on grain imports. The country 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 privatization process has since discouraged some potential bidders.