Saudi Arabia to increase silos' capacity by 21 percent
Posted by Zawya
Arab News
23 June 2010


RIYADH: Saudi Arabia's state-run Grain Silos and Flour Mills OrganizationGrain Silos and Flour Mills Organization Grain Silos and Flour Mills Organization plans to increase the capacity of its silos by 21 percent before the end of 2012 as the Kingdom prepares to increase its reliance on wheat imports.

Two years ago, Saudi authorities sought to save water by reducing the amount of wheat they buy from local farmers by 12.5 percent annually, abandoning a 30-year wheat cultivation plan that would have helped the country fulfill its domestic needs.

As a result, the GSFMO has emerged as one of the biggest new buyers in the international grain market.

Consequently however, farmers have been abandoning cultivation of wheat at a faster rate than what authorities had forecast.

GSFMOGSFMOLoading... Managing Director Waleed Al-Khariji said Saudi Arabia's grain silos now have a capacity of around 2.5 million tons. The organization wants to award tenders to expand this by 530,000 tons within a month.

"We have a project in Makkah for 250,000 tons worth of capacity and two others in Jeddah and Dammam that would add 140,000 tons at each of the two locations. Such projects take 26 months to be executed. We expect to start construction work within a month," he said.

The expansion follows a recommendation by the Shoura Council to raise storage capacity to ensure smooth domestic supplies, Kharji added.

Jeddah and Dammam are already Saudi Arabia's main shipping hubs.

The new silos being built in Makkah aim to cater to the needs of a region that attracts at least four million pilgrims each year.

GSFMO also plans to add a third shipping hub for grain in the southern city of Jazan, Khariji said.

"It will have a 120,000 ton capacity. We will soon award a tender for the execution of the silos project in Jazan, which will be our third hub."

The Kingdom needs an estimated 3 million tons of wheat annually. GSFMO's policy is to consistently store six month's worth of wheat stocks, with three week's worth of flour supplies, Kharji added.

By RODOLFO C. ESTIMO JR.

© Arab News 2010


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