London: Tharawat Business, an agricultural commodities trader owned by Saudi Prince Turki Bin Salman, is closing after starting operations three years ago, according to the company’s chief executive officer.
The Riyadh-based trader will close this month after a change in strategy by its holding company, which no longer plans to invest in the business, Carlos Murilo Barros de Mello, CEO of Tharawat Business, said in a phone interview on Wednesday. The company was established in 2013 to source food globally and had already started trading sugar, poultry and fine foods, he said.
The decision to shut down comes as a slump in oil prices crimps economic growth in Saudi Arabia. Expansion in the world’s largest crude exporter will slow to 1.5 per cent this year and 2 per cent in 2017, well below the 3.4 per cent growth estimated for 2015, according to Moody’s Investors Service.
“We had been trying to find new investors since December,” Mello said by phone from Sao Paulo, where he is based. “We now have decided to close.”
Tharawat Business was set up to source food from the most efficient producers globally and bring it to the Middle East, Mello said. It also planned to buy commodity assets at the bottom of the raw-materials slump, when it would be able to pay lower prices. The company already had plans to acquire sugar and poultry assets when its holding company decided to pull out, he said.
Crude oil fell by more than half in the past three years as countries from Saudi Arabia to Iraq decided against curbing supply, adding to a glut from a US boom in production of shale energy deposits. Prices for food commodities from sugar to soybeans have also declined in the past few years due to bumper harvests and speculation an economic slowdown in China will reduce imports.
“Now is the time to buy commodity assets,” Mello said. “But the shareholder’s strategy has changed.”