Saudi Arabia’s Almarai, recognized as the largest dairy firm in the Middle East, has unveiled a plan to allocate more than 18 billion Saudi riyals (approximately $4.8 billion) through 2028. This substantial investment aims to fortify its existing operations and broaden its reach into novel market segments.
The investment blueprint earmarks 7 billion riyals for the expansion of its poultry division and 5 billion riyals to enhance its food categories, including dairy, juice, and bakery products. Additionally, Almarai is setting its sights on scaling up in sectors showing significant promise, such as frozen goods, red meats, seafood, and ice cream.
One billion riyals are designated for the venture into new food categories, while another four billion riyals are intended for the enhancement of the company’s supply chain and sales infrastructure to support its growth aspirations both locally and regionally. Moreover, a separate fund of one billion riyals is reserved to expedite the progress in technology development.
Funded through the company’s operational cash flow over an upcoming five-year span, this strategic move is designed to cement Almarai’s market dominance and facilitate its foray into additional markets and sectors, according to Prince Nayef Al Kabeer, the chairman of Almarai.
Almarai’s investment approach rests on several core pillars, focusing on sustaining business growth, diversifying product offerings, upholding quality, and contributing to food security across its operational territories.
Although Saudi Arabia remains Almarai’s primary market, its products are also distributed across the Gulf Cooperation Council (GCC) countries, Egypt, and Jordan. The company’s recent financials reflect a 4 percent surge in net profit for the fourth quarter, propelled by increased sales in its poultry and dairy segments.
Despite facing challenges such as reduced commodity sales in North America and a dip in earnings from Egypt due to currency devaluation, Almarai has reported a ‘positive’ performance in its foundational GCC markets, particularly in Saudi Arabia.
The GCC region, which depends heavily on food imports due to environmental constraints, is susceptible to global market volatilities that can impact food security. The GCC dairy market is anticipated to grow at a steady rate of 5.4 percent annually until 2028.
Almarai’s investment is not only a strategic business decision but also aligns with Saudi Arabia’s Vision 2030, a plan aimed at economic diversification and achieving greater food security within the kingdom.