World Grain -- December 2015 - 17

NEWSREVIEW

GSFMO privatizes its flour mills
RIYADH, SAUDI ARABIA - The Saudi
Council of Ministers, chaired by King Salman,
approved on Nov. 9 the establishment of four
milling companies and restructuring the Grain
Silos and Flour Mills Organization (GSFMO)
under a new name, the General Organization
for Grains (GOG).
The GSFMO's nine mills will be distributed among the four new entities by the Public
Abdul
Investment Fund (PIF) of the Ministry of Finance. Foreign investors will be allowed to compete with the Saudi
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privatization by the Saudi government. The new milling companies
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for fees to government-approved customers at agreed subsidized
prices. The new mills would be allowed, if they so choose, to import
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and the production of upscale quality bakeries and pasta.
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of new technologies and increase the competitiveness and increase
employment opportunities and raise the quality of the product," said

Abdulrahman bin Abdul Mohsen al-Fadhli, minister of agriculture
and chairman of GSFMO "It will also give the institution in the fuWXUH WKH SRVVLELOLW\ RI QHZ UROHV LQ WKH ¿HOG RI VWUDWHJLF VWRUDJH RI
food security."
Most of the revenue of the private mills is expected to come from
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combined daily milling capacity of 12,630 tonnes of wheat and process about 3.3 million tonnes of wheat annually. The GOG is currently building several wheat silos to increase its total storage capacity to
3.7 million tonnes of wheat by 2016.
The GOG will remain the exclusive government agency to import
subsidized milling wheat and will maintain ownership and operation of
most of the wheat silos across the country. The GOG will manage the
strategic wheat reserves and ensure food security objectives. The GOG
is expected to privatize only a part of its grain storage silos to provide a
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will be retained by the GOG for strategic reserve purposes.
The GOG will also assume regulatory functions in the wheat milling sector that will include:
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operators.

GrainCorp 2015 earnings down
SYDNEY, AUSTRALIA - GrainCorp reported on Nov. 12 that net
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"Solid performances from our processing operations have reduced
the impact of the challenging conditions faced by our grains businesses," said Mark Palmquist, managing director and chief execuWLYH RI¿FHU ³2XU SURFHVVLQJ EXVLQHVVHV FRQWULEXWHG DSSUR[LPDWHO\
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in eastern Australia - a clear demonstration of the importance of our
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Tullamarine expansion of frozen bakery products.
7KH¿VFDO\HDURXWORRNIRU$OOLHG0LOOVHDUQLQJVDUHH[SHFWed to continue to be supported by value-added product initiatives and
ranges such as frozen bakery products.
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carry-in of 1.6 million tonnes compared to 2.3 million tonnes. Grain
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lower than average forecast grain production in eastern Australia and
lower carry-in of 1.6 million tonnes that will again put pressure on
country grain receivals and export volumes.
"As outlined earlier in the month, our grains businesses faced a
tougher year off the back of last harvest's smaller crop, which resulted in lower throughput volumes for Storage & Logistics and severely
www.World-Grain.com / World Grain / December 2015

restricted opportunities for GrainCorp Marketing," Palmquist said.
"In this light, I'm pleased with the cost control and risk management
demonstrated by these businesses."
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volumes with sales of 0.21 million tonnes but had volumes at lower
margins. Oils continued to have high capacity and utilization for bulk
liquid terminals. Complementary contributions from commodity management businesses were offset by low volumes for NZ Feeds.
7KH¿VFDO\HDURXWORRNIRU2LOVLQFOXGHVFRQWLQXHGKLJKFDpacity utilization expected for crushing facilities and bulk liquid terPLQDOV5H¿QLQJYROXPHVDUHH[SHFWHGWRUHPDLQVWDEOH7KHUHLVDQ
expected earnings uplift following completion of network optimization and completion of bulk liquid terminal project. Domestic comSHWLWLRQDQGGHPDQGIRUFUXVKHGDQGUH¿QHGSURGXFWVZLOOFRQWLQXH
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"GrainCorp Oils has performed well with higher crush volumes
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GrainCorp Foods," Palmquist said. "The Liquid Terminals business
continues to perform strongly and we have made good progress in
the various expansion projects across GrainCorp Oils."
"Conditions are likely to remain challenging next year, with a very
low carry-in of 1.6 million tonnes and another smaller crop likely to
limit export opportunities from eastern Australia," Palmquist said.
"We do, however, expect a return to more typical grain marketing
patterns in Australia due to lower year-on-year levels of export bookings relative to expected production.
"We also expect continued improvements in the performance of
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partial contributions from Liquid Terminals projects and our consoliGDWHGRLOVHHGVFUXVKLQJDQGUH¿QLQJIRRWSULQW´KHVDLG
17
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World Grain -- December 2015

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