RIYADH May 29 Saudi Arabian dairy and food producer Almarai Co's board has approved a 15.7-billion riyal ($4.2 billion), five-year investment plan that will draw on finance from bank loans and Islamic bonds, it said on Tuesday.
The money will replace the company's existing investment base and fund expansion between 2013 to 2017 of its operations in farming, manufacturing, distribution and logistics, Almarai said in a bourse statement.
It added the investment will also boost its product innovation and develop its Saudi workforce.
Almarai has been keen to expand its footprint outside its core presence in the Gulf. In December, the company acquired Fondomonte S.A which owns and operates farms in Argentina, to secure feed for its dairy herd and poultry businesses.
"Financing of this programme will be mostly done from the company's operating cash flows but it will also utilise expansion of its financing capabilities either via traditional bank facilities, Saudi Industrial Development Fund and Arab Development Fund funds or via the sukuk programme recently launched," it said on Tuesday.
Almarai, the Gulf's largest dairy firm by market value, raised 1 billion riyals through its first sukuk in March, which it said was 4.7 times oversubscribed.
The company's first-quarter net profit was 242.1 million riyals, a 2 percent increase on an annual basis with sales growing 17 percent as it pushed further into other Gulf markets. (Reporting by Angus McDowall; Editing by Amran Abocar)