Saudi Arabia's Almarai, the largest dairy producer in the Middle East, will invest 6.6 billion Saudi riyals ($1.76 billion) to expand its poultry segment and double its market share.
Almarai’s board approved the capital expenditure the company said in a statement on Monday to the Saudi stock exchange, Tadawul, where it is listed
The five-year strategic expansion will be funded through internal cash flows.
The investments will include the development of grandparent farming and production facilities to enable full vertical integration of poultry supplies. Expansions will focus on different geographical locations in the kingdom to enhance the biosecurity, as well as to diversify Almarai’s contribution to the country’s economic development, it said.
The moves come as part of the private sector’s efforts to develop the national economy, in line with the Saudi Vision 2030 and to enhance food security in the kingdom.
In March the dairy and food company agreed to buy frozen bakery item manufacturer and producer Bakemart in the United Arab Emirates and Bahrain for an enterprise value of 93.5 million dirhams ($25.5 million).
Almarai made a Q1 net profit of 386 million riyals, nearly flat year-on-year. In the poultry segment, profit fell over 24 percent mainly due to lower subsidy compared to last year.
Almarai's shares are trading over 1 percent higher on Tadawul at 54.30 riyals at 1.30 p.m. Riyadh time.
(Writing by Brinda Darasha; editing by Daniel Luiz)
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