Sector News

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

June 7, 2018
Food & Drink

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

December 3, 2022

AI central to Nestle’s innovation overhaul

Food & Drink

Nestle SA has accelerated its product development process by 60% since 2016, according to the company. The faster speed to market has been achieved through a restructuring of its research and development process. Now the company is investing in various forms of artificial intelligence (AI) and machine learning to further improve its R&D process and generate better results.

December 3, 2022

Takeover on the horizon? Brenntag makes preliminary indication of interest for Univar Solutions

Food & Drink

German chemicals distributor Brenntag has confirmed potential takeover talks with US rival Univar Solutions and is understood to be debating the feasibility of a potential acquisition in the coming months. Univar Solutions confirms that it has received a preliminary indication of interest from Brenntag regarding a potential transaction.

December 3, 2022

Cargill announces purchase of Owensboro Grain Company

Food & Drink

Cargill has announced the acquisition of Owensboro Grain Company, a soybean processing facility and refinery located in Kentucky. The purchase of the Owensboro-based company will support Cargill’s efforts to “modernise and increase capacity across its North American oilseeds network to support growing demand for oilseeds driven by food, feed and renewable fuel markets”.