Expansions in facilities, acquisitions and new products are helping food giant Almarai respond to growing demand and maintain its position of strength in the dairy and juices sectors.

Almarai reported a 35.7 per cent surge in net profit to SR288.3 million ($76.8 million) in first-half 2007, the performance coming on the heels of net profits of SR461.5 million in full-year 2006, which was an increase of 20.5 per cent over the previous year.
The first-half figures included consolidation from newly acquired entities Western Bakeries Company Limited and International Baking Services Company. The company had announced last February it would take full ownership of the two bakeries instead of buying 75 per cent stakes as planned earlier. “Almarai decided to turn the bakeries into wholly owned subsidiaries on the basis of due diligence conducted by its advisers Deloitte & Touche and Baker McKinsey,” a company statement said. The acquisitions put Almarai in place to venture into biscuit-making.
Towards maintaining its own upward momentum in a juice market which is witnessing consistent growth of 60 per cent annually, Almarai recently launched an extensive range of juices in slim 1.75-litre bottles following an SR30 million investment.
“The launch of new bottles with juices reflects the quality of the bottle and the product at the same time,” said marketing general manager Hussam Abdul Qader. “It is a lightweight and modified bottle that flows with the fast developing lifestyle we all live now.”
Marketing manager for juices and beverages Clayton Lee Buckley said Almarai had been showing growth of 40 per cent annually. “We have embarked on modernisation, and modernising packaging is an essential part in any company’s development policy,” he said.
Hasthal Saad Al Utaibi, brand manager for juices, expressed pride over the quality of Almarai’s Alfonso mango juice. “Although the consumer is price-conscious, one makes purchases based on the impression one gets. This is in line with the policy of Almarai, which has taken the responsibility since it was established 30 years ago to develop products both in terms of appearance and ingredients.”
In 2006, fruit juice sales totaled SR206.5 million, a 45 per cent jump on 2005. Sales of all Almarai products in 2006 were SR.2.75 billion, up 28.5 per cent over the previous year.
Most of Almarai’s revenues came from dairy products comprising fresh and longlife dairy and cheese and butter, these accounting for SR2.52 billion.  In fresh dairy, the company produces milk, laban, natural and fruit yoghurts, cream and dairy desserts. Sales of these products amounted to SR1.64 billion, an increase of 20.2 per cent over 2005.
Longlife dairy products including UHT milk and cream, evaporated milk and sterilised cream contributed SR251.3 million, up 19.7 per cent on the previous year.
“Following the successful launch of milk in PET packaging in late 2005, 2006 saw its rollout into other GCC countries with additional pack sizes which in turn saw milk sales increasing substantially, the company said.
Significant growth was recorded in the cheese and butter category with sales of SR629.6 million, a 55.4 per cent increase on 2005. Almarai had opened a new cheese plant in late 2006, which greatly augmented production.
The company also produces tomato paste and jams.
Production facilities were backed by a strong and widespread distribution network. “The ambitious expansion of the sales distribution network to over 34,000 customers has seen turnover increase by 28.5 per cent. We now operate 40 sales depots throughout the GCC region. To service this growth, the number of distribution vehicles has increased and more shop fridges have been placed in retail outlets to ensure the product is maintained in a chilled environment,” the annual report released earlier this year said.
Among significant recent developments was the commissioning in 2006 of the Badiah Super Farm. Construction of another farm, known as Al Danah Super Farm, is nearing completion.