Research and Markets: Almarai's Expansive Diversification Initiative Is Reducing Its Reliance on the Saudi Market, As Food Consumption is to Increase by Just 6.2% through to 2013

DUBLIN--(Business Wire)--
Research and
Markets(http://www.researchandmarkets.com/research/f0fe31/saudi_arabia_food) has
announced the addition of the "Saudi Arabia Food and Drink Report Q4 2009"
report to their offering.

The Saudi Arabia Food and Drink Report provides industry professionals and
strategists, corporate analysts, food and drink associations, government
departments and regulatory bodies with independent forecasts and competitive
intelligence on Saudi Arabia's food and drink industry.

Saudi Arabia remains unmoved in fourth place in the regional Food & Drink
Business Environment Ratings table for Q409. Although the author expects low
energy prices on a year-on-year (y-o-y) basis to force down the kingdom's GDP
growth to 0.52% in 2009, the economic downturn has not stopped some of its
leading food and drink companies from pursuing expansions. Led by the
increasingly ambitious diversified dairy behemoth Almarai, Saudi companies are
spreading their wings promisingly as discussed in the recently published Saudi
Arabia Food & Drink Report for Q409.

Almarai has stolen the show in 2009. In February 2009, it partnered with PepsiCo
to form International Dairy and Juice Limited (IDJ), a company created to
acquire promising dairy and juice processors across non-Gulf regional markets.
IDJ has already made two notable buys; in June 2009, it acquired the
Jordan-based dairy and fruit juice producer Teeta and quickly followed this up
by buying the Egyptian dairy company International Company for Agro-Industrial
Projects (Beyti) for a reported US$115mn. Almarai's expansive diversification
initiative is reducing its reliance on the Saudi market, which is particularly
important considering that the author is currently forecasting food consumption
to increase by just 6.2% through to 2013.

Almarai has also been actively broadening its business domestically, which
currently relies on the fresh milk segment. In July 2009, it reached an
agreement to acquire full ownership of the domestic poultry producer Hail
Agricultural Development Company (Hadco). Almarai agreed to pay SAR30.1 per
share - a 3.4% premium on the company's closing share price on June 30 2009 and
35.3% more than Almarai had unsuccessfully bid in November 2008 (the deal valued
Hadco at around SAR950mn (US$253mn). In the same month, Almarai announced plans
to begin production at a new SAR650mn infant formula plant and a SAR200mn baked
goods plant by the fourth quarter of 2010.

Not to be outdone, the diversified conglomerate Savola Group has also been
active this quarter. Although it reported a 17.5% y-o-y dip in Q209 (through to
June 30 2009) to SAR212.5mn (US$57mn), it attributed much of the drop to
provisions made on a minority stake held in a Saudi property company. On the
acquisition side, Savola bolstered its mass grocery retail (MGR) business in
July after reaching an agreement worth a reported SAR440mn (US$117.3mn) to
acquire the Geant supermarket banner owned by Saudi-based Fawaz Alhokair Group.
Possessing a robust balance sheet, it is believed that Savola will not tap into
debt markets to finance its latest purchase. Geant's 11 outlets will be absorbed
by Savola's MGR arm Panda. Savola is ideally placed to capitalise on the
forecast that through to 2013 supermarket sales in the kingdom will increase by
21.4% and reach US$1.7bn.

Key Topics Covered:

* Executive Summary
* SWOT Analysis
* Business Environment
* Food
* Drink
* Mass Grocery Retail
* Competitive Landscape
* Appendix
* Country Snapshot: Saudi Arabia Demographic Data
* BMI Food & Drink Industry Glossary

Companies Mentioned:

* Al Rabie Saudi Foods
* Al Safi-Danone
* Almarai Dairy
* Aujan
* Carrefour MAF - Saudi Arabia
* SADAFCO - Saudi Dairy & Foodstuff Company
* Savola Group - Al Azizia Panda

For more information visit
http://www.researchandmarkets.com/research/f0fe31/saudi_arabia_food.

Research and Markets
Laura Wood, Senior Manager,
press@researchandmarkets.com
U.S. Fax: 646-607-1907
Fax (outside U.S.): +353-1-481-1716

Copyright Business Wire 2009