Almarai Moves to Expand Regional Presence with Jordanian Dairy Acquisition

Arabian Post Staff -Dubai

Saudi Arabia’s food giant Almarai is poised for a major expansion in the region with its decision to acquire Jordan’s Hammoudeh Food Industries for $70 million. This strategic move aims to bolster Almarai’s dairy and cheese production capabilities through its subsidiary, Teeba Investment. The deal is seen as part of Almarai’s broader efforts to deepen its presence in core markets across the Middle East.

Hammoudeh Food Industries, a leading producer of dairy, juices, and other related products in Jordan, represents a crucial addition to Almarai’s portfolio. The acquisition, valued at SR263 million (roughly $70 million), will be financed through Almarai’s internal cash flows. This investment not only solidifies the company’s foothold in Jordan but also aligns with its long-term growth strategy. The acquisition is still subject to regulatory approvals in both Jordan and Saudi Arabia, and adjustments to the final price may occur as the process progresses.

The acquisition is expected to provide Almarai with significant operational leverage, enabling it to enhance its product offerings and scale operations across the region. Almarai’s strategic move aligns with ongoing trends in the Middle East’s food and beverage sector, where companies are increasingly looking to consolidate their presence in key markets and diversify their product lines. For Almarai, this acquisition marks another step in maintaining its competitive edge as one of the largest dairy producers in the region.

The company has been eyeing expansion opportunities in key markets like Jordan, where Hammoudeh’s established brand and operational capabilities complement Almarai’s ambitions to enhance its supply chain and distribution networks. This move is likely to have significant implications for Almarai’s growth trajectory as it works to tap into Jordan’s growing dairy market and further expand its consumer base.

Almarai’s financial performance has been robust, reflecting its successful execution of strategic acquisitions and operational efficiencies. Over the years, the company has maintained a strong presence in the GCC, and the acquisition of Hammoudeh is expected to solidify its position as a leading player in the region’s dairy market. This latest acquisition will enable Almarai to extend its product range, which includes milk, cheese, and other dairy products, while also leveraging economies of scale to drive profitability.

The Middle East’s dairy market has seen a surge in demand driven by shifting consumer preferences toward healthier food options. Companies like Almarai have responded by investing in innovation and expanding their product lines to cater to these trends. Almarai’s recent financial results also demonstrate the company’s resilience and ability to adapt to changing market conditions. In its latest trading updates, Almarai’s stock price climbed by 1.62% following the announcement of the acquisition, signaling strong investor confidence in its expansion strategy.

Almarai’s acquisition of Hammoudeh Food Industries also comes at a time when regional trade relationships are being strengthened. Saudi Arabia and Jordan have been enhancing economic cooperation, especially following the signing of the Comprehensive Economic Partnership Agreement (CEPA), which aims to boost trade between the two nations. The trade between Saudi Arabia and Jordan is projected to reach $8 billion in the near future, a sign of the deepening ties between these neighboring nations. Almarai’s investment in Jordanian assets could serve as a catalyst for further collaborations between businesses in the two countries, strengthening economic ties and creating opportunities for other sectors as well.

This acquisition is seen as a continuation of Almarai’s strategy of diversifying its business and enhancing its regional footprint. Previously, the company had made strategic acquisitions and investments to expand into new product segments, particularly in the food and beverage industry. This focus on expansion has enabled Almarai to maintain its leadership in the market, especially amid growing competition in the sector.

Looking ahead, Almarai is expected to continue seeking out new growth opportunities in the region, with a particular focus on emerging markets that offer strong consumer demand for dairy products. The acquisition of Hammoudeh is just one piece of the puzzle in Almarai’s broader growth strategy, as the company works to enhance its production capabilities, streamline its supply chain, and expand its distribution network across the Middle East.

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