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Almarai Company Essay

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Updated: May 21st, 2020


Almarai Company is a food company in Saudi Arabia. The company was started in 1977 and its headquarters is in Ridaya. The company manufactures various products such as dairy liquids, yogurts and desserts, bakery, foods, poultry and infant formula. Almarai also has arable farms that it operates in Argentina (Almarai co ltd, 2013). The company markets its products under the Almarai brand. The company distributes its products to the Gulf Cooperation Council (GCC).

Company overview

The company began from a humble beginning and today it is one of the largest companies in the world of dairy products and foods. It started as a dairy company and laban processing, later it ventured into other products such as fruit juice, bakery, and poultry among others.

The additional lines of products transformed the Almarai into a food company. Moreover, Almarai has been successful and in two decades the annual revenues hit SAR1 billion. During the next decade the company doubled that revenue. In 2011 the sales of the company had soared to nearly SAR23 billion (Corporate Overview, 2013).

The company has grown as it strives to provide the consumers with unrivalled high quality products and has invested infrastructure, farms, distribution systems and production operations of world class standards. For instance, the Almarai Hosten cows are very productive giving double the amount of milk that European cows produce (Corporate overview, 2013).

Almarai is dedicated to quality that can be trusted and in site of its momentous growth and expansion the company remains true to its core values of “quality first, quality always” (Corporate overview, 2013, p.1). The value is embedded in their product development line and quality to ensure that the rapid growth of the company does not lead to compromise of the quality of the products. The purpose is to produce and develop world class products.

History of Almarai

Almarai was started by HH Prince Sultan bin Mohammed bin Saudi Al Kabber in 1977. He was a visionary man and saw the gap in the dairy products in the Saudi Arabian market. He started the company to produce high quality products for the people. He guided the company in fresh milk production and laban processing. Under his guidance the company transformed to a modern company (History, 2013).

In early 1990s, Almarai embarked on centralization of the company to make it more efficient and productive. Centralization occurred through reinvestment. The transformation would help the company cut costs and make quality goods within a comfortable price range for the consumers.

The process began with centralization of five plants. They did away with ten dairy farms and bough bigger ones in Al Kharj. The ten farms were replaced with four bigger ones. A bigger centralized plant started operation in 2005. Moreover, two super farms were commissioned and the company changed from a private to a public owned company with about seventy thousand shareholders. The market capitalization of was over SAR23 billion in 2011 (History, 2013).

The company continued its diversification plan to invent more products and expand geographically. Almarai expanded its operation and ventured into bakery by buying the Western Bakeries located in Jeddah in 2007. After two years, Al Kharj construction began in the expansion of the bakery production line.

Almarai started producing poultry products through Hail Agricultural Development Company (HADCO) after they acquired it to diversify their product portfolio. The company continued its expansion plans and in the same year ventured into fruit juices production. The production is a joint venture between Almarai and PepsiCo.

The venture is called the International Dairy and Juice Company (IDJ). Moreover, in 2010 Almarai ventured into infant nutrition. They built an infant nutrition plant in Al Kharj the first of its kind in the region. Almarai formed a joint venture with Mead Johnson Nutrition and formed International Pediatric Nutrition Company and the products co-branded as Enfa (History, 2013).

Almarai management and managers

The Almarai management is modern and the company has embraced technology to improve its management of the huge workforce. The company has over 20,000 workers scattered across the region and managing them using traditional manual methods proved to be a major challenge. The use of automated Human resource systems helped the company to overcome challenges and become an efficient company (SAP, 2011).

The managers of the company comprise, Abdulrahman Al Fadley, the Chief Executive Officer (CEO), Abdullah Abdulkarim, assistant CEO, Abdullah Al Bader, General Manager -support services, Alan van der Nagel, General Manager-operations, Andrew Mackei, General Manager -farming, Georges Schorderet, Chief Operating Officer, Howard Davis, General Manager-poultry, Majed Nofal, head of Central Procurement , Malcolm Jordan, General Manager- marketing, Nicholas Jay, General Manager- sales, Paul-Louis Gay, Chief Financial Officer and Dr. Victor Aisgbogun, General Manger-Quality and Product development (Senior management, 2013).

Production and product line

Almarai has state of the art production plants. The company has invested in high class facilities to produce high quality products. Through its production plants the company produces products on a daily basis to serve their customers.

The company has seven products line. The products include: Juices, dairy liquids, poultry, infant formula, foods, yogurts and desserts and bakery. There are various products in each product line giving consumers a wide choice and the products have different pricing so that consumers can choose what they can afford. That is a very good strategy by Almarai (Our Products, 2005).

Distribution networks

Almarai has a very strong distribution network in GCC. The distribution network enables Almarai to reach its 48,000 consumers daily. The cooperation with other retailers has helped Almarai to distribute its products to many consumers in the region. The distribution network is aided by its strategic marketing plan that has made Almarai a brand of choice in GSS. The distribution network is high class and full of expertise (Almarai company, 2011).

The large fleet of vehicles helps reach a wide geographical area. The company has a fleet of about 1000 vehicles that include: tractor head, tankers and trailers. Furthermore, they have about 3000 vans. All their vehicles transport their products in over 100,000 trips per year.

They take the products to their 89 sales depots the customers spread across the six states (Corporate overview, 2013). Some vehicles are properly equipped with refrigeration to ensure goods maintain their freshness. The fleet is owned and managed by Almarai (Almarai company, 2005).

Growth and expansion

The company has big plans for growth and expansion. It will grow through joint ventures and expand to other regions in the world. The acquisition of dairy companies in Egypt and Jordan will help the company to expand into North Africa and Levent regions through HADCO (Almarai company, 2009).

The joint ventures with PepsiCo in juice making and Mead Johnson in infant nutrition will make the company grow faster and expand further. Besides, the bakery business is also fast growing and Almarai has added it to its portfolio. The company is expected to duplicate its success in the dairy sector in its other lines of production and that will help the company to grow. The expected growth is 24% and 26% in juice and bakery lines between 2008 and 2013 (Almarai company, 2009).

Therefore, Almarai will growth through the expansion of their core products into the region. They will also grow through the acquisition of companies that deal with the products they have added to their portfolio. The new acquisitions pose a very good prospect for further expansion and growth (Almarai company, 2009).

Summary and conclusion

Almarai is a successful company that has offered employment opportunities to thousands of people. The company produces various products. Through the diverse product line, the company meets the needs of the people. The company has a big potential for growth and if it takes advantage of its current position of being a market leader it will continue to grow and invent more products for the consumers.

Moreover, through the joint ventures the company expands and reaches a wider market hence enabling people outside Saudi Arabia to enjoy the products too. The company has also embarked on optimizing the day to day operations through technology had hence improved productivity and efficiency.

The company also provides its raw materials for product production and that helps cut on costs. Therefore, the prices of the products are affordable. The company should continue to grow and provide more people with job opportunities and also develop more products that will benefit their loyal consumers.

Reference List

Almarai company. (2005). Web.

Almarai company (2011). Web.

Almarai company. (2009). Web.

Almarai co ltd. (2013) Almarai Co ltd. Web.

Corporate overview. (2013). Web.

History. (2013). Web.

Our products. (2013). Web.

SAP. (2011). Almarai company. Web.

Senior management. (2013). Web.

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