Saudi Arabian multinational dairy company Almarai is planning to invest $1.76 billion (6.6 billion Saudi riyals) over the next five years to expand its poultry business throughout the kingdom.
Almarai’s board of directors has approved capital expenditures that will help the company achieve its goal of doubling its market share in the segment, according to a statement to the Saudi Stock Exchange, Tadawul, where its shares trade.
The diary company has stated that the strategic expansion of the poultry business will be funded through “internally-generated cash flows.”
“The expansion will be implemented in several phases over five years and include the development of grandparent farming and production facilities to enable full vertical integration of poultry supply,” it said in the bourse filing.
“Expansion will be focusing on different geographical locations in the Kingdom to enhance the biosecurity in poultry farms and to distribute the company’s contributions in economic development,” as per the company.
The move to expand the poultry segment is consistent with Saudi Arabia’s goal of increasing food security with the assistance of the private sector. Food and beverage companies in the region are increasingly considering acquisitions and product diversification in order to strengthen their position in a market that has previously relied heavily on food imports.
Almarai’s first-quarter net income has increased slightly to $102 million (385.9 million riyals), with revenue increasing 1.46 percent to $970 million (3.64 billion riyals). In March, Almarai has agreed to buy Bakemart’s bakery and retail business in the UAE and Bahrain for $25.47 million in order to increase its product range across the country.