Dairy Giant Almarai to Invest $4.8 Billion in Next Five Years

As part of its five-year strategic plan, Saudi-based Almarai, the world’s largest vertically integrated dairy company and the region’s largest food and beverage manufacturing and distribution company, will invest $4.8 billion through 2028.

The board of directors of Almarai, who met on Monday, approved the company’s strategic plan for the five years ending December 2028.

The company aims at maximising sales and ramp up investment in supply chain, development, sustainability, operational efficiency, and technology, the company said in a filing with Saudi Exchange Tadawul.

Accordingly, around $1.87 billion will be allocated for the poultry segment’s expansion, while $1.33 billion earmarked for enhancing current core product categories (including dairy, juices, and bakery products). Meanwhile, as much as $270 million will be allotted for tapping new promising food segments.

Additionally, $1.07 billion will be dedicated to developing supply chains and sales capabilities to bolster local and regional expansion plans. Further, another $270 million will be allocated to support and expedite technology development and innovation investments. Funding for the strategic plan will be sourced from the company’s operational cash flows over the next five years.

Achieving Food Security

The strategic plan, which is consistent with the Kingdom’s Vision 2030, as well as the investment program behind it, confirms the belief of Almarai’s Board of Directors that investment in the food industry contributes to achieving food security in the Kingdom and the region while adding value to shareholders.

Almarai’s board is confident in achieving its ambitious objectives, citing clearly defined strategies and dedicated action plans aimed at reinforcing strategic pillars. The board reaffirms its commitment to leveraging all necessary resources to meet these goals, the statement added.

It may be mentioned here that Savola Group, Almarai’s biggest shareholder, last month said that it plans to offload its full 34.5% stake in the dairy producer, to its existing shareholders. Saudi Arabia’s sovereign wealth fund – Public Investment Fund (PIF) – is Almarai’s second biggest shareholder with a 16% stake through one of its units.

Sustainable Future

Almarai has successfully increased the proportion of power derived from clean energy sources to 10% across various facets of the business, including management, production, sales, distribution, and logistics. The company aims to further elevate this figure to 20% by 2025.

The company’s sustainability initiatives extend beyond its operations, with the transformation of its dairy institute into a food industry institute. This move has not only enhanced the skills of the Kingdom’s workforce but has also benefited other food companies in the region.

It’s “Doing Better Every Day” sustainability strategy plan comprises 25 goals and targets to be achieved by 2025, focusing on three interconnected pillars and 12 core themes that underpin the company’s commitment to contributing to a more sustainable future.