June 16, 2022

 

Saudi Arabian dairy firm Almarai to invest US$108m in seafood and poultry businesses

 

As part of Saudi Arabia's focus on food security, Almarai, the Middle East's largest dairy company, plans to invest SAR 405 million (~US$108 million; SAR 1 = US$0.27) to drive its expansion into the seafood business and secure poultry supplies, The National reported.

 

Almarai said in a filing to the Tadawul stock exchange that its board of directors approved an initial investment of SAR 252 million (~US$67.1 million) in the seafood processing business, which it will fund from operating cash flows.

 

Almarai's product line will be expanded as part of the investment plan, which will also contribute to the kingdom's "food security agenda as per Vision 2030".

 

The seafood investment is expected to take 24 months from the date of final regulatory approval.

 

Saudi Arabia has been increasing its investments in local manufacturing and agricultural technology start-ups in order to strengthen its food security.

 

Prices of basic commodities have risen as a result of the Russia-Ukraine crisis, especially among nations that rely on both countries for their supplies.

 

Due to the global rise in food prices, Jadwa Investments has revised Saudi Arabia's inflation rate for 2022 to 2.4%, up from 1.7% previously.

 

In a separate filing to the Tadawul, Almarai said it will invest SAR 153 million (~US$40.7 million) to secure parent poultry bird supplies, citing the "imminent risk" of parent stock shortages in the kingdom.

 

The company said after additional investments are made to secure additional parent stock supply,the parent bird facility will be used for hatching egg production as originally planned for poultry capacity expansion.

 

Almarai announced plans to invest SAR 6.6 billion (~US$1.7 billion) in its poultry business across the kingdom over the next five years in May 2021.

 

According to the company at the time, the investment would help it double its market share in the segment.

 

Almarai's net income increased by about 9% in the first quarter as revenue increased due to the lifting of coronavirus-related restrictions in the kingdom and the Gulf region.

 

-      The National