Saudi Arabia’s Almarai plans to spend SAR10.6 billion in capital investment under a five-year business plan
The investment for the period 2019 to 2023 is part of the dairy company’s goal to boost its efficiency and expanding its geographic footprint and will be financed through growing operating cash flow, bank funding, local and international sukuk programs, as well as the Saudi Industrial Development Fund and the Agricultural Development Fund, Reuters reported.
The company said in a statement that its focus will remain on efficiency and cost optimisation measures will continue throughout the plan period to ensure continuous competitive advantage.
Consumer goods companies and retailers in Saudi Arabia have suffered as the combination of the introduction of Value Added Tax, higher energy prices and a fragile labors market have curbed consumer spending. Almarai and other Saudi exporters have also been impacted by the cutting off of the Qatari market as a result of a regional diplomatic rift between Qatar and Saudi Arabia, the United Arab Emirates, Bahrain and Egypt, Reuters said.
The company’s investment will focus on the replacement of existing assets, improvement of production within farms and factories, distribution and transport facilities, widening of its geographic footprint and product innovation.