Gulf largest dairy firm

The board of Saudi Arabia’s Almarai has approved a capital investment plan which will reach SR21 billion ($5.6 billion) in the next five years, it said. The Gulf’s largest dairy firm said the 2016-2020 programme will replace its existing investment plan – which foresaw spending worth SR15.7 billion between 2013 and 2017 – and would cover expansion in the areas of farming, manufacturing, distribution and logistics.“The objectives set by the board include increasing further its presence in all segments and geographies where it operates, targeting to double consolidate sales, while improving the financial performance,” it said in a statement. Almarai is present in the six Gulf countries, Egypt and Jordan. It also owns Fondomonte, an Argentinian farming firm which supplies feed to its dairy herd. The company posted a 12 per cent rise in first quarter net profit to SR306.5 million ($81.7 million) in the three months to 31 March, aided by a 11.7 per cent year-on-year increase in first-quarter sales, which rose to SR3.04 billion. Food companies in the kingdom are drawing significant interest from investors, who see the sector as a way to tap into growing regional wealth. The firm is expected to benefit from the opening of the kingdom’s equity market to direct foreign investment on 15 June and has been included by index compiler MSCI in its standalone Saudi index set to be launched on 1 June. Almarai will use its growing operating cash-flow besides bank facilities, money from the Saudi Industrial Development Fund (SIDF) and the Agricultural Development Fund (ADF), or its existing sukuk programme, to finance its investment plan, it said. Investments required for product renovation and innovation have also been factored in the plan.