The new joint venture company will acquire Arasco's existing corn milling facility in Al Kharj and will produce starch-based products primarily for the Gulf Cooperation Council countries of Saudi Arabia, UAE, Kuwait, Oman, Qatar, Bahrain, as well as Yemen, Iraq and Jordan.
This joint venture will mark Cargill's first operations in the Kingdom. The two companies say the deal will build on Cargill's global capabilities in food ingredients and Arasco's local knowledge and supply chain infrastructure.
Frank van Lierde, Cargill's executive vice president, said: "The Middle East region represents the highest growth area for the food and drink industry in the world."
It hoped that production would be tripled at the Al Kharj plant and the product offering would be expanded to include high fructose corn syrup to serve the growing food and beverage industry in the Kingdom of Saudi Arabia.
The agreement is subject to regulatory approvals.