(Adds details, CEO comments, possibility of more investment)
CAIRO/DUBAI, June 22 Saudi Arabia's Almarai
, the Gulf's biggest dairy company, and U.S. soft
drinks giant PepsiCo will invest at least $345 million
in Egypt over the next five years, the Saudi firm said on
The announcement was a fresh sign that after three years of
stagnation because of political and economic turmoil following
Egypt's 2011 revolution, foreign investment in the country may
revive as a measure of stability returns.
The Almarai investment would be conducted through Egyptian
dairy and juice products firm International Company for
Agro-Industrial Projects (Beyti), a subsidiary of International
Dairy & Juice Ltd, which is owned 52 percent by Almarai and the
remainder by Pepsico.
Most of the money would come from equity injections by the
joint venture partners in line with their ownership ratios,
while Beyti would take on some debt.
Almarai will finance its investment through its own cash
flow, with the financial impact gradually reflected on its group
balance sheet between the third quarter of this year and 2019,
the company said.
BIGGEST DAIRY FARM
The $345 million investment plan, approved by Almarai's
board, includes setting up a new juice factory, expanding
existing facilities, increasing Beyti's fleet of vehicles and
sales netork, and creating a new dairy farm for 5,000 cows,
Beyti's chief executive Mohamed Badran told Reuters.
Almarai's CEO Abdulrahman Al Fadley, speaking at a joint
news conference with Egyptian Trade and Industry Minister Mounir
Fakhry Abdel Nour in Cairo, said he hoped to raise the
investment amount to about $560 million over five years.
The additional money would be spent on another dairy farm,
which Badran said would be the biggest in Egypt, accommodating
20,000 cows. He added that this would depend on obtaining
government approval for the purchase of land.
Egypt's newly appointed investment minister Ashraf Salman
said on Saturday that he was aiming for $10 billion of foreign
direct investment for the coming fiscal year that starts in
July, and $14 billion in three years. FDI for the first nine
months of the current fiscal year was $4.4 billion.
As part of a $500 million investment plan announced for
Egypt in March, Coca-Cola will build a new juice plant
near Cairo in a joint $100 million project with Saudi Arabia's
Aujan Coca-Cola Beverages Co.
In addition to Egypt's young and growing population, foreign
companies see the country as a potential export base for markets
in Africa and elsewhere. This year's election of former army
chief Abdel Fattah al-Sisi as president has raised hopes for
greater political stability and better economic management.
(Reporting by Andrew Torchia and Ehab Farouk; Writing by Shadia
Nasralla; Editing by Andrew Torchia)