Al Marai Company

ALMARAI
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(Arabic for "pasture") is the largest integrated dairy foods company in the world. The company was established in the Kingdom of Saudi Arabia in 1976 as a partnership between the Irish agri-foods pioneer Alastair McGuckian and his brother Paddy, and HH Prince Sultan bin Mohammed bin Saud Al Kabeer.
The company is based in Riyadh.
History of Al-Marai
Established in 1977. HH Prince Sultan bin Mohammed bin Saudi Al Kabeer, Almarai's Chairman, recognized an opportunity to transform Saudi Arabia’s traditional dairy farming industry to meet the needs of a rapidly expanding domestic market. Under his guidance, numerous agricultural projects were launched. Starting with fresh milk and laban processing, the scale and scope of these initiatives soon expanded to incorporate modern dairy farms and state-of-the-art processing plants.
Developments: During the early 1990s, Almarai entered a period of restructuring and reinvestment that took it from a decentralized structure to a centralized structure. The aim: to establish itself as a low-cost producer so that consumers can enjoy high-quality products at an affordable price. In line with this model, five decentralized processing plants were replaced with the first central processing plant. Also ten small decentralized dairy farms were replaced with four large dairy farms in Al Kharj in the central region. In late 2005, a second larger central processing plant was commissioned, incorporating a new cheese plant. As well as two new super-farms were commissioned. In the same year, Almarai moved from being a privately owned company to a publicly listed company and now has around 70,000 shareholders. At the end of 2011, Almarai's market capitalization exceeded SAR23 billion.
Bakery: In 2007, Almarai entered the bakery category by acquiring Jeddah-based Western Bakeries. Two years later, it started the construction of a new bakery facility in Al Kharj.
Poultry: In 2009, Almarai adds the poultry category to our portfolio through the acquisition of Hail Agricultural Development Company (HADCO). After investing in a world-class production facility, it launched the new poultry brand – Alyoum.
Geographical expansion: Almarai pooled its respective expertise in dairy and juice with PepsiCo. In 2009 and launched a joint venture – the International Dairy and Juice (IDJ) Company.
Infant nutrition: In 2010, Almarai entered the infant nutrition market with the construction of the region’s first infant nutrition plant at Al Kharj, to be commissioned in 2012. Almarai formed the International Pediatric Nutrition Company (IPNC), a 50-50 joint venture with Mead Johnson Nutrition. Its infant nutrition products are co-branded under Almarai and Mead Johnson’s flagship range, Enfa
Al-Marai Vision/Mission Statements
Vision Statement
To be the preferred choice in food products, promoting nutrition, health and well being in the GCC
Mission Statement
Almarai will constantly exceed consumer expectations by providing the highest quality food products and superior customer services through continuous development and investment in its human and technical resources

SWOT Analysis
Strengths
• Management commitment to expand the company operations • Market leader in the entire GCC region (achieved increase by 29.5% in sales during 2006) • Strong budget & financial situation (achieved net profit of SR 288.3 million in 2007) • Availability of raw material & natural resources • Professionally-trained manpower (employs about 3,000 people in producing, processing and marketing) • Trusted and loved brand name • Good high-quality reputation (The company's Al Nakeel dairy farm was the first dairy farm in the world to achieve ISO certification.) • High production capacity (370000 gallon of milk a day and 24 packaging lines) • Efficient low cost production methodologies • High technology utilization • Leveled distribution networks with direct delivery capability.(17,000 retail customers throughout (GCC)) • Broad based revenue sources from a diversified product portfolio including fruit juices and bakery • Dominant position in domestic short-life milk, laban, yoghurt, and fruit juice segments • Widespread logistics network servicing almost 40,000 clients daily • Proven innovation capabilities for packaging, products, and flavors.

Weaknesses • Business depends on Perishable products • Low exporting potential • Relatively high prices • Market share in UAE not as strong as in KSA, especially for fruit juices • No owned production facility in the UAE • Bakery business limited to domestic market at present • Limited presence outside of the GCC.

Opportunities • Flexibility of products development • Easy market development • Unfulfilled customer needs exist • Technology development • Increased health conscious consumer behavior likely to result in increased liquid milk, laban and fruit juice consumption per capita • Low interest rate environment and sizeable leveraging potential enable increased investments in the company’s various business lines or potential ones. • Adverse financial conditions for small dairy farms likely to benefit Almarai’s market share. • Increased consumer awareness across the GCC of inflationary pressure on various economic sectors, including food.

Threats • "Ain" which is a diary products company had started this business in UAE and may consider entering Saudi market in the future. • No major trade and entering barriers • Availability of substitute products • Unknown local competitors' intentions • Some situations make it hard to measure market demand • Change in people lifestyle and taste • Feedstock prices are eroding margins overtime • Government intervention to limit food retail price increases restricts food company’s pricing power • Potential competition from international food companies eager to set-up GCC-based food production facilities • Increased reliance on lower-margin sales to supermarkets