Koninklijke Bunge B.V. (Bunge), a wholly owned subsidiary of global agribusiness and food company Bunge Ltd., and Bahri Dry Bulk Co. (BDB), a subsidiary of Bahri Group, the national shipping arm of the Kingdom of Saudi Arabia, announced this week that they have signed definitive agreements forming a joint venture to establish a leading ocean freight supplier for dry bulk import and export flows in and out of the Middle East region. The joint venture, which will operate under the name Bunge Bahri Dry Bulk Ltd., will provide exclusive freight transportation services to regional and other international customers.
The company plans to ship more than 5 million metric tons in year 1 while ramping up volume over time to double-digit figures. BDB will own 60% and Bunge will own 40% of the joint venture, which will be registered and based in Dubai. Financial terms of the agreements were not disclosed.
“Bunge is excited to partner with BDB to strengthen our presence in the Middle East,” said Brian Thomsen, managing director of Bunge Global Agribusiness and chief executive officer of Bunge Product Lines. “We expect the (joint venture) to become a carrier of choice for customers importing grains and other agricultural commodities in the Middle East, as well as for dry bulk exports outside of the region. The (joint venture) combines Bunge’s expertise in providing freight services and risk management with BDB’s unique knowledge of Middle Eastern customers and their needs to address growing demand in the region.”
Ibrahim Al-Omar, CEO of Bahri, said the joint venture is one of BDB’s strategic initiatives to reduce complexity for its customers along the value chain.
“Working with a leading global player in commodity trading brings the necessary commercial and market intelligence to dry bulk supply and demand fundamentals, and Bunge brings crucial expertise and scale to the table,” Bahri said. “Their global presence in commodity flows and knowledge of the freight market, coupled with our maritime expertise and strategic position in the region, creates a powerful alliance to meet growing demand for freight services within the Middle East.”
The joint venture, which will be financed pro rata by BDB and Bunge, will charter and commercially operate SUPRAMAX and/or PANAMAX (and/or other suitably sized dry bulk vessels) initially from the fleet currently owned or managed by BDB and, subsequently, from third parties.