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Saudi Arabia Food and Drink Report Q1 2008Published by: Business Monitor International Published: Feb. 20, 2008 - 65 Pages Table of Contents
AbstractSaudi Arabian food and drink companies continued to flex their regional muscle, as discussed in BMI’srecently published Saudi Arabia Food & Drink Report for Q108. In September, locally-based beveragecompany Aujan confirmed that it will be building two beverage factories in Iran to take advantage of thecountry’s strong forecast growth. While most international investors have shied away from investing inIran, Aujan has decided that the country’s large, young population, and recent economic growth warrantthis level of investment. The company will invest US$100mn in two factories, a beverage filling plant andan aluminum can factory close to the capital city Tehran. It also announced that it has plans to investUS$30mn in expanding its production facilities in Dubai and the modernisation of its Dammanproduction facilities. According to the company, it is also considering investing in similar projects in Iraqand North Africa, as the company embarks on something of a regional expansion spree. Aujanmanufactures, markets and distributes its soft drink and confectionery portfolio throughout Saudi Arabiaand in neighbouring countries including Jordan, Yemen, Oman, Bahrain, Kuwait, the United ArabEmirates, Qatar and many other countries further afield. With a long history and established reputation,Aujan is well-positioned to capitalised on the growing consumer demand in many of the region’semerging markets.The country is also known for the quality of its dairy products, with Saudi Arabian dairy products popularacross the Gulf and wider Arab world. The country's dairy industry has developed rapidly in recent years,as higher incomes, increasing use of white goods, growing consumer interest in healthy eating and thecontinued emergence of major domestic manufacturers have seen the sector transform itself from a minorsmall-scale industry into a major economic contributor in little over a decade. Production has grown tothe extent that Saudi Arabia is almost self-sufficient in dairy products, with this sector accounting for themajority of its exports to other Gulf Cooperation Council (GCC) countries. A major beneficiary and driver of this growth has been Al Marai, the largest dairy foods company in theMiddle East and the market leader in Saudi Arabia. The company has a 40% share of the Saudi dairymarket and a 30% share in the wider Gulf region. In October the company posted more strong financialresults, with third-quarter profits up by 52% year-on-year, beating analysts expectations and making thisthe company's sixth consecutive record quarter. These impressive results reflect how the company hasbenefited from the rising demand for dairy products across the region, which is largely the result ofcontinuing economic development. The outlook for the Saudi economy is quite positive, as it willcontinue to be propelled by government and consumer spending, and we see a pick-up in 2008, with realGDP growth expanding by 4.2%, followed by 3.9% in 2009. With record-high oil prices fuellingeconomic growth, consumer confidence is growing, although a recent surge in inflation rates has beenfelt. However, despite this recent inflation surge, the overall outlook for the Saudi Arabian food and drinksector remains positive. Get Full Details About This Report >> |
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