Arabian Agricultural Services Company (Arasco) and the National Shipping Company of Saudi Arabia (NSCSA), sealed an agreement to establish a new shipping company as a joint venture, 60 percent of which is owned by NSCSA and the rest by Arasco. The agreement was signed by the CEO of NSCSA, Humoud Al-Ajlan, and the executive president of ARASCO, Dr. Abdulmalik Alhusseini. The new company, which will be named Bahri Dry Bulk (BDB), will seek to own, charter, and operate dry bulk ships. Arasco will sign long-term charter agreements with BDB following its formation. On Arasco's strategic rationale for this joint venture, Alhusseini said: “Let us start with the big picture. Our government realizes that self-sufficiency cannot be equated with food security given the limited water resources in the country and the region.” “This is why our government is trying to encourage the private sector to import rather than grow water-consuming crops such as wheat, feed grains, and forages. This is in perfect alignment with Arasco's business model which is import-based and strengthened by over 25 years of experience, strategic alliances with key players, and supply chain excellence. This joint venture adds more strength to our business model. We are happy to partner with NSCSA given their solid reputation and successful track record in the shipping business,” he added. Alhusseini further said that “as far as Arasco is concerned, this move is basically backward integration into sea freight. Our strategic objectives are to better manage our freight operations and to broaden our supply base by converting a portion of our business from CFR to FOB. This is essential in supporting our ambitious growth plans which call for importing more than 5 million metric tons of feed and food grains by 2014. The economies of scale brought by our large volumes and the strength of our supply chain put us in a position to do that.” Arasco was founded in 1983 in Riyadh and has grown steadily to become a prominent agri-food conglomerate with a workforce of more than 2,000. The company's mission is to support food security in a sustainable way in the MENA region with particular emphasis on Saudi Arabia. Arasco operates along the food value chain via a portfolio of tightly-related businesses which include raw materials trade, feed milling, corn refining, broilers production and marketing, farm inputs and services, feed and food phosphates manufacturing, inspection and testing services, and logistical services. NSCSA was formed in the year 1979 as a public company, 28 percent ownership is held by the Public Investment Fund of the Saudi Government and the remaining shares are heldby Saudi nationals.
