Arabian Mills Plans to Offer 30% Stake on Tadawul

Arabian Mills for Food Products Company, one of the market-leading flour milling companies in Saudi Arabia, is toying with a proposal to proceed with an initial public offering (IPO) and the listing of its ordinary shares totalling around 15.4 million on Saudi Exchange Tadawul.

The Capital Markets Authority (CMA) has approved the application of Arabian Mills On 24 June 2024 for registering its shares, representing 30% of the company’s issued share capital, by way of a sale of existing shares by Abdulaziz Al-Ajlan Sons for Trading and Real Estate Investment Company – Ajlan & Bros, Sulaiman Abdulaziz Al-Rajhi International Company, and The National Agricultural Development Company (NADEC).

The final offer price of the Offer shares will be determined at the end of the book-building period, Arabian Mills said in a regulatory filing with Tadawul.

Arabian Mills operates in Saudi Arabia’s consumer staples market. It produces, distributes and sells wheat flour and derivative products, animal feed and bran to customers across the Kingdom. It is also one of the market-leading milling companies in the GCC region with the largest daily flour production capacity in Saudi Arabia.

The Company is located in Riyadh and has two other plants located in Hail and Jazan, near livestock farming and tourism hubs serving other key regions. Since its privatisation in 2021, the company has consistently delivered strong financial performance with industry-leading profitability margins and robust cash flow generation.

Arabian Mills Chairman Ajlan Alajlan said that the company is one of the leading wheat and feed milling companies in Saudi Arabia and their commitment to quality and excellence is resolute, enabling them to serve the local community’s daily nutrition needs while contributing to the Kingdom’s food security agenda.

Natural Step

“The decision to go public is a natural next step for Arabian Mills. It will provide us with the platform to invest and expand our production capacities and capabilities besides product portfolio to meet the growing demand from Saudi Arabia’s growing F&B and agribusiness,” he said.

Arabian Mills CEO Rohit Chugh said that the decision to go public has been a decisive one toward accelerating the company’s growth trajectory. Since its privatisation, the company has significantly scaled the business, increased profitability margins, and strengthened our market share.

He said that the growing market for flour, feed, and bran in the Kingdom presents compelling opportunities, and the company is well-positioned to capitalise on robust demand through continuous innovation and quality enhancements.

“Our focused strategy will deliver value and further our growth ambitions and we have a robust product pipeline to meet diverse consumer needs and preferences, supported by an effective marketing and sales strategy,” he explained.

The company was also expanding its presence in Saudi Arabia by opening distribution centres in strategic locations to ensure it reached more customers more efficiently. To support company’s expansion plans, they were constantly enhancing operations to optimise utilisation, minimise downtime and enhance margins.

“By going public, we are also committing to higher standards of transparency and corporate governance, which we believe will ultimately benefit our shareholders and other stakeholders alike. This IPO is a catalyst for Arabian Mills to achieve sustainable, long-term growth and to continue our purpose of driving milling excellence and delivering nutrition,” Chugh added.