Almarai, Saudi Arabia’s largest dairy firm, has approved a capital investment plan for 2016-20 that will reach 21 billion riyals (US$5.6 billion). This program will be designed to replace their existing investment plan that called for the investment of 15.7 billion riyals (US$4.2 billion) between 2013 and 2017. The new plan will include objectives established by the board including the goal of increasing its presence across all of its current geographic operating territories, doubling its consolidated sales, and improving financial performance.
Almarai has operations in the six Gulf countries as well as Egypt and Jordan. It also owns Fondomonte, an Argentina-based farming firm which produces feed for the group’s dairy production operations.
Food companies in Saudi Arabia are currently attracting serious investor attention in expectation of the opening of the kingdom’s equity market to direct foreign investment on June 15, and Almarai has been included by index compiler, MSCI, in its standalone Saudi index to be launched June 1.
Investments allocated to production innovation and development have also been factored into the five-year investment plan which will be funded through Almarai’s growing operating cash flow, bank facilities, funds from the Saudi Industrial Development Fund (SIDF) and the Agricultural Development Fund (ADF), or its existing sukuk bonds program.
The group posted a 12% increase in first quarter net profits of US$81.7 million, supported by an 11.7% increase in first quarter sales, valued at US$810.6 million.
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