Saudi’s Almarai to invest $4.8bn until 2028 to expand operations
Saudi Arabia’s Almarai, the Middle East’s largest dairy company, plans to invest more than 18 billion Saudi riyals ($4.8 billion) until 2028 to boost its existing businesses and expand into new segments.
The plan includes 7 billion riyals for poultry expansion and 5 billion riyals for strengthening food categories such as dairy, juice and bakery, the company said in a bourse filing to the Saudi stock exchange Tadawul, where its shares are traded.
It is also looking at growing “promising” operating sectors such as frozen food products, red meat, seafood and ice cream.
Almarai said that one billion riyals would be allocated to entering new food segments,and four billion riyals to developing supply chain and sales capabilities to support local and regional expansion plans.
The company also earmarked one billion riyals to support and accelerate technology development.
The plan, which will be financed from the company’s operational cash flows over the five-year period starting this year, will consolidate Almarai’s position in the market while supporting its expansion into new markets and sectors, Prince Nayef Al Kabeer, Almarai’s chairman, said.
Almarai’s investment strategy is built on multiple pillars, aiming for steady growth in business and products while maintaining quality standards and supporting food security in its markets, he added.
While the kingdom is Almarai’s biggest market, its products are also sold in the GCC region, Egypt and Jordan.
The company reported an increase of more than 4 per cent in fourth-quarter net profit, boosted by higher revenue led by its poultry and dairy businesses.
Net profit attributable to shareholders after zakat and tax for the three months ending December 31 rose to 370.72 million riyals. Almarai’s revenue in the fourth quarter rose by about 2 per cent to 4.92 billion riyals annually.
The company recorded “positive” performance in its core GCC markets, led by Saudi Arabia.
However, challenges such as lower commodity sales in North America and reduced contribution from Egypt due to currency devaluation led to a slower overall revenue growth rate.
Many GCC nations rely heavily on food imports due to limited arable land, water scarcity and harsh climate conditions.
The reliance on imports also makes them vulnerable to fluctuations in global food prices, supply disruptions and other external factors that can affect food availability.
The GCC dairy market is projected to grow at an annual rate of 5.4 per cent until 2028, reaching a value of $13.59 billion, compared with $9.93 billion in 2022, according to Research and Markets.
Almarai said its investment will support the kingdom’s Vision 2030 economic diversification strategy and aid its aim of achieving food security.
Source: thenationalnews