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Minister announces formation of National Grain Company

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Abdulrahman Al-Fadhli, Saudi Arabia’s Minister of Environment, Water, and Agriculture has sponsored the inauguration ceremony of Saudi Arabia’s National Grain Company, a strategic partnership between the Saudi Agricultural and Livestock Investment Company (SALIC) and the National Shipping Company of Saudi Arabia (Bahri). With an estimated total cost of SAR 412 million in Phase 1, the project aims at meeting the future demand for major grains in the Kingdom of Saudi Arabia.

The new company’s inauguration and name announcement ceremony was held at the headquarters of the Ministry of Environment, Water, and Agriculture, under the patronage of Abdulrahman Al-Fadhli, Minister of Environment, Water, and Agriculture and Chairman of SALIC, and in the presence of Ahmed Al-Faris, Governor of the Saudi Grains Organization (SAGO), Mohammed Al-Sarhan, Chairman of Bahri, Sulaiman Al-Rumaih, CEO of SALIC, and Abdullah Aldubaikhi, CEO of Bahri.

This partnership aims to oversee the trade, handling, and storage of grains between its sources in all regions of the Black Sea, Europe, South America, and the Red Sea region, contributing to the process of import, transportation, distribution, and storage. The project will start with an annual production capacity of nearly 3 million t by 2022, eventually increasing to 5 million tpy. The new terminal, which will be constructed to the highest international standards, will allow for the rapid handling of grains and fodder, by making the logistics services of the terminal available to all importers for the benefit of both the private and public sectors.

Commenting on the occasion, Al-Fadhli said: “We are delighted with this partnership, which aligns with SALIC’s strategy to contribute to achieving food security in the Kingdom, as part of the Vision 2030 objectives. The project will also aid with the provision of basic food products and price stability in the Kingdom, which is tied to global production and consumption rates, the movement of commercial shipping, and global stocks of basic food commodities.”

Al-Fadhli added: “We are confident that this company will play a major role in strengthening supply chains in the Kingdom of Saudi Arabia, as it will lead to the building of the largest regional centre for grains. The new terminal will enhance food distribution solutions in the region by importing, processing, exporting, and storing grains to the Kingdom, thanks in part to the strategic location of Yanbu Commercial Port, a key maritime gateway to receive the Kingdom’s imports of strategic goods. This project also reflects SALIC’s strategic objectives to achieve more than 50% of the import coverage rate for all commodities identified as strategic goods, in line with the Kingdom’s food security strategy.”

Al-Sarhan said: “Our work at Bahri balances demand and supply, harnessing big data to efficiently manage and streamline our fleet operations. Today, we are seizing new expansion opportunities in cooperation with economic entities in the Kingdom of Saudi Arabia to diversify our offerings and provide value-added services, in addition to the development of our main business sectors. Over the years, we have made great efforts to contribute to national food security by transporting nearly 1.5 million t of grains annually to the Kingdom through our fleet of five dry-bulk carriers. With the addition of four new carriers before the end of this year, Bahri will be able to transport 5 million t of dry food and various grains, including barley, corn, wheat, soy, and others, annually, to the Kingdom of Saudi Arabia.”

Al-Sarhan added: “We are pleased to achieve one of our largest regional-level strategic initiatives. Our joint venture with SALIC will link the Kingdom to global grain sources, further contributing to the goals of Vision 2030 to make our nation an international logistics hub, connecting three continents. The Yanbu Commercial Port, overlooking the Red Sea, was chosen as the strategic location following a lease agreement between SALIC and the Saudi Ports Authority (MAWANI), reflecting the Kingdom’s objectives to maintain water security and limit the cultivation of fodder that consumes water in large quantities.”

The Yanbu Commercial Port is well suited as a maritime gateway for a grain handling terminal of this size and capacity, as most imported grains come from countries along the Black Sea, South America, and parts of North America. New shipments coming from Australia to the Red Sea will also find the terminal beneficial, thanks to its modern offloading, handling, and storage technologies.

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