Saudi-based dairy group Almarai has agreed to sell its 33% stake in United Farmers Holding Company (UFHC) to Saudi Agricultural and Livestock Investment Company (SALIC), for SAR 105 million ($28 million).
SALIC is one of the founding partners of UFHC, a joint venture which is equally owned by SALIC and two other Saudi-based private sector companies.
Almarai said in a statement given to the Tadawul stock exchange, where its shares are listed, that the financial impact of the sale will take effect as of the fourth-quarter of 2018.
The company, which is one of the largest dairy companies based in the Arabian Gulf, also claimed that the proceeds from the transaction will be used to support the company’s business and investments.
Almarai struggled to maintain its profitability over the last year, as its third-quarter net profit fell 4.9% to SAR 634.5 million ($169 million) compared to the same period in 2017, while overall revenue in the quarter remained largely flat at SAR 3.37 billion ($898 million).
The company attributed this to the higher cost of sales and exports and a general contraction of the market, driven by factors such as a slowdown in the GCC consumer goods market, the implementation of an expatriate levy in Saudi Arabia and 5% VAT in the country, as well as a range of other factors which have led to higher energy and transportation costs.
The company expects to eliminate 1.2 billion tons carbon dioxide equivalent of methane emissions by the end of the decade. The company says that it already reduced its methane emissions by around 14% between 2018 and 2020.
The “first-of-its-kind” pilot project will develop and demonstrate an affordable modular bioprocessing system to produce biodegradable bioplastics from food waste diverted from landfills. The three-year grant will test the scalability and feasibility of the conversion on a national and global scale.
Arkeon is allying with specialty mineral giant ICL to support the scaling of its fermentation bioprocess that converts CO2 into the 20 proteinogenic essential amino acids needed in human nutrition. The process, hailed as carbon negative, is based on the use of archaea, a group of microorganisms that naturally feeds off the greenhouse gas.