Sector News

Saudi’s Almarai to invest $2.8 billion over next five years

June 7, 2018
Consumer Packaged Goods

Saudi Arabia-based Almarai, which is one of the Gulf’s largest dairy producers, is planning to invest up to SAR 10.6 billion ($2.8 billion) between 2019 and 2023 in a business plan that is aimed at cutting costs and expanding its facilities.

Through this investment Almarai aims to improve its production capabilities within its farms and manufacturing facilities, its distribution and transportation facilities and to expand its geographical footprint.

“Given the persistent challenging economic conditions across the region, the focus on efficiency and cost optimization measures will continue throughout the plan period to ensure continuous competitive advantage,” the company said in a statement.

The diary company said that its expansion will be funded through a mix of existing cash flow and debt.

Almarai’s investment comes as the consumer spending in Saudi Arabia has softened, thanks to the introduction of value added tax this year.

The company’s fourth quarter net profit fell by 4.3% due to falling sales in the GCC markets. Almarai, whose third quarter net profit was also flat, had embarked on a cost cutting program at the end of 2016 to reduce expenses by SAR 500 million over two years. The company has also forecast a weak sales outlook in the coming years as the industry grapples with declining margins and falling sales.

Lat year, Saudi Arabia’s Public Investment Fund became the third largest shareholder in Almarai after it acquired a 16.3% stake in the firm. Almarai, which is listed at the 24th position in Forbes Middle East’s Top Companies In the Arab World, is owned by Sultan Bin Saud Al Kabeer.

By Mary Sophia

Source: Forbes

comments closed

Related News

February 25, 2024

The Body Shop faces store closures, layoffs and ingredient surplus after Aurelius acquisition

Consumer Packaged Goods

Recent reports reveal The Body Shop will shut up to half of its 198 stores in the UK and cut the size of its head office, incurring hundreds of job losses. According to the firm overseeing the restructuring of the beauty retailer, closures will begin this Tuesday.

February 25, 2024

Kroger and Albertsons face lawsuits to block $24.6bn merger – Bloomberg

Consumer Packaged Goods

Amidst brewing tensions, the US Federal Trade Commission (FTC) and a coalition of states are poised to take legal action as early as next week, aiming to prevent grocery giant Kroger’s $24.6 billion acquisition bid for Albertsons, Bloomberg reported.

February 25, 2024

Diageo reportedly in talks to offload trio of brands, including Pimm’s

Consumer Packaged Goods

The owner of Guinness and Baileys has hired financial service group Rothschild to explore the sale, which includes Pimm’s, fruit liqueur brand Safari and Pampero rum. Each brand could be offloaded individually or as a three, according to Sky News.

How can we help you?

We're easy to reach