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SAGO Announces Completion of Privatization of Second, Fourth Milling Companies

Saudi Arabia completes final stage of the flour milling sector privatization (Asharq Al-Awsat Arabic)
Saudi Arabia completes final stage of the flour milling sector privatization (Asharq Al-Awsat Arabic)
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SAGO Announces Completion of Privatization of Second, Fourth Milling Companies

Saudi Arabia completes final stage of the flour milling sector privatization (Asharq Al-Awsat Arabic)
Saudi Arabia completes final stage of the flour milling sector privatization (Asharq Al-Awsat Arabic)

The National Center for Privatization and PPP (NCP) and the Saudi Grains Organization (SAGO) announced on Tuesday the sale of the Second Milling Company and Fourth Milling Company to qualified strategic investors. This comes as part of the final stage of the flour milling sector privatization in the Kingdom.

The formal signing of the Share Purchase Agreement took place at the Ministry of Environment, Water and Agriculture (MEWA) headquarters in Riyadh, in the presence of Eng. Abdulrahman A. Al-Fadley, the Minister of Environment, Water and Agriculture, the Chairman of the Board of Directors of SAGO, the Chairman of the Privatization Supervisory Committee for the environment, water and agriculture sectors, and a member of the Board of Directors of NCP.

According to an official SAGO briefing, the award of each milling company was decided based on the highest financial bids submitted by qualified strategic investors, which were thoroughly reviewed to ensure adherence to the terms stipulated in the request for proposal for the first and second batch of privatizing the flour milling sector.

The flour milling sector represents one of the targeted sectors for full privatization under Saudi Arabia's Vision 2030.

"The sale of the four milling companies to the private sector aims to further strengthen the capabilities of the sector, enhance performance, support diversification of products while maintaining quality," the statement added.

"This privatization will improve services provided to citizens and yield employment opportunities through increased contribution of the private sector towards a thriving and sustainable economy."

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Bank of England Cuts Main Interest Rate by a Quarter-point to 4.75%

Bank of England Deputy Governor for Monetary Policy Clare Lombardelli, Bank of England Governor Andrew Bailey, The Bank of England's Head of Media and Stakeholder Engagement Katie Martin and Deputy Governor, Markets and Banking, Dave Ramsden hold the central bank's Monetary Policy Report press conference at the Bank of England, in London, on November 7, 2024. HENRY NICHOLLS/Pool via REUTERS
Bank of England Deputy Governor for Monetary Policy Clare Lombardelli, Bank of England Governor Andrew Bailey, The Bank of England's Head of Media and Stakeholder Engagement Katie Martin and Deputy Governor, Markets and Banking, Dave Ramsden hold the central bank's Monetary Policy Report press conference at the Bank of England, in London, on November 7, 2024. HENRY NICHOLLS/Pool via REUTERS
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Bank of England Cuts Main Interest Rate by a Quarter-point to 4.75%

Bank of England Deputy Governor for Monetary Policy Clare Lombardelli, Bank of England Governor Andrew Bailey, The Bank of England's Head of Media and Stakeholder Engagement Katie Martin and Deputy Governor, Markets and Banking, Dave Ramsden hold the central bank's Monetary Policy Report press conference at the Bank of England, in London, on November 7, 2024. HENRY NICHOLLS/Pool via REUTERS
Bank of England Deputy Governor for Monetary Policy Clare Lombardelli, Bank of England Governor Andrew Bailey, The Bank of England's Head of Media and Stakeholder Engagement Katie Martin and Deputy Governor, Markets and Banking, Dave Ramsden hold the central bank's Monetary Policy Report press conference at the Bank of England, in London, on November 7, 2024. HENRY NICHOLLS/Pool via REUTERS

The Bank of England cut its main interest rate by a quarter of a percentage point on Thursday after inflation across the UK fell below its target rate of 2%.
The bank said its rate-setting panel lowered the benchmark rate to 4.75% — its second cut in three months — though its governor Andrew Bailey cautioned that interest rates would not be falling too fast over coming months.
“We need to make sure inflation stays close to target, so we can’t cut interest rates too quickly or by too much,” he said. “But if the economy evolves as we expect it’s likely that interest rates will continue to fall gradually from here.”
In the year to September, UK inflation stood at 1.7%, its lowest level since April 2021 and below the central bank’s target rate of 2%, The Associated Press reported.
Central banks worldwide dramatically increased borrowing costs from near zero during the coronavirus pandemic when prices started to shoot up, first as a result of supply chain issues built up and then because of Russia’s full-scale invasion of Ukraine which pushed up energy costs.
As inflation rates have recently fallen from multi-decade highs, the central banks have started cutting interest rates.
Economists have warned that worries about the future path of prices following last week's tax-raising budget from the new Labour government and the economic impact of US President-elect Donald Trump may limit the number of cuts next year.
The decision comes a week after Treasury chief Rachel Reeves announced around 70 billion pounds ($90 billion) of extra spending, funded through increased business taxes and borrowing. Economists think that the splurge, coupled with the prospect of businesses cushioning the tax hikes by raising prices, could lead to higher inflation next year.
The rate decision also comes a day after Trump was declared the winner of the US presidential election. He has indicated that he will cut taxes and introduce tariffs on certain imported goods when he returns to the White House in January. Both policies have the potential to be inflationary both in the US and globally, thereby prompting Bank of England policymakers to keep interest rates higher than initially planned.