With a high-profile partnership it recently forged with Pepsico, Almarai begins to move on to a wider international stage, growing from its largely Gulf role.

The partnership, called International Dairy and Juice Ltd, will have Pepsico holding 52 per cent of the stake and Almarai the remainder, paving the way for it to acquire companies or set up greenfield ventures in the two product categories in Africa and Asia.
Almarai will continue to grow its business in its existing markets even as the company builds up new markets outside the region through its Pepsico hook-up, Almarai has said.
The Gulf’s largest dairy company by market value believes the potential for substantial growth still exists in the region where it has already built up a strong base over many years.
All the same, to consolidate its bottom line and diversify its product and geographical base, Almarai has pledged to invest SR6 billion ($1.6 billion) over a five-year period ending 2013 to expand its business outside the Gulf region and has initiated or completed some key acquisitions or joint ventures in the international arena.
As well as the Pepsico move, Almarai reached agreement in 2008 to buy a major stake in Egyptian dairy company International Company for Agricultural Industrialisation Projects or Beeaty and finalised an agreement to buy 75 per cent of Jordanian beverage firm Taibah Investment and Advanced Food Company, its first foreign acquisition.
The cost to Almarai for buying the Taibah stake was put at $126.4 million.

Expertise
Almarai believes it has the requisite technical expertise in the dairy and beverage business as well as the expertise to manage a large outfit. The company has been producing and marketing products in the fresh dairy, longlife dairy, fruit juice, cheese and butter and bakery categories as well as other products such as tomato paste and jams. It has 90 sales depots in the Gulf and delivers its products through 42,000 retailers. It expects to launch a baby food division and have it operational in 2011.

Local acquisition
Within Saudi Arabia, Almarai is said to be in talks to acquire Hail Agricultural Development Company (Hadco), a Saudi poultry and animal feed company. Hadco is the fourth largest poultry producer in the kingdom with the capacity to produce 10 million chickens annually. The acquisition will enable Almarai to enter the poultry sector and make it a more diversified company. The diversification process began in 2007 with the acquisition of a bakery company in Saudi Arabia and Almarai has evolved to become one of the largest non-oil brands in the company, attracting admiration for succeeding in a business despite a desert locale. It, however, has benefited from cheap energy and subsidies for livestock feed.
One of the challenges will be to grow profits in the midst of increased investments and entry into new businesses.
The company reported a consolidated net profit of SR197.4 million for Q1 2009, up 21.7 per cent. Turnover for the quarter was SR1.32 billion, an increase of 18.5 per cent over the corresponding period in 2008.
For the whole of 2008, net income was SR910.3 million, a 36 per cent increase over the previous year.