Saudi Almarai's board of directors has approved plans to invest a total of over 400 million riyals ($107 million) into its food businesses.
In a filing to the Tadawul bourse on Tuesday, the Gulf's largest dairy producer, said it will enter the seafood business with an initial investment of 252 million riyals. The investment for the seafood processing facility will be financed from Almarai’s operating cashflows.
In a separate filing, the food producer said its board approved bringing forward an investment of 153 million riyals to secure the supply of parent poultry birds, to mitigate an imminent risk of supply shortage of parent stock in the kingdom.
Once further investments are deployed to secure additional parent stock supply, the parent bird facility will be utilised for egg production, it added.
In 2021, Almarai said it would invest 6.6 billion riyals over five years to expand its poultry segment and double market share.
Almarai saw its Q1 2022 net profit rise 9 percent year-on-year to 420 million riyals. Operating cash flow reached 529.2 million riyals, down 39 percent compared with the year-earlier period.
In recent months there has been a shortage of poultry products on grocery shelves across the world due to labour and transport bottlenecks. Malaysia has banned the export of chicken with the aim of cooling prices for the domestic market.
(Reporting by Brinda Darasha; editing by Seban Scaria)