Almarai, the Saudi Arabia-based food manufacturer, has received a US$100m loan from the European Bank for Reconstruction and Development (EBRD) to finance operations in Egypt and Jordan.
Based in Riyadh, Almarai manufactures food and beverage products spread across dairy, juices, bakery, poultry and infant nutrition for retail and foodservice channels in the Middle East and North Africa. It is part-owned by US private-equity firm The Carlyle Group.
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It operates in Egypt and Jordan through its respective subsidiaries Beyti and Teeba. Both subsidiaries are 52%-owned by Almarai, and 48%-owned by US food and beverage giant PepsiCo, with whom Almarai set up the joint venture, International Dairy and Juice, in 2009.
In Egypt, the loan will allow Beyti to fund additional dairy and juice production capacity to address increasing demand for its products and also provide it with additional working capital.
In Jordan, the proceeds will enable Teeba to strengthen its capital base and provide fresh funding to support its working capital needs. In addition, a diagnostic study of milk producers, processors and intermediaries in Jordan will highlight best practices and potential improvements in the raw milk supply chain in the country. The study, funded by the European Union, will aim to identify bottlenecks in the sector and develop recommendations.
The EBRD hopes the loan will boost further integration and efficiency in the Egyptian and Jordanian dairy and juice sectors and facilitate further foreign direct investment in the Egyptian and Jordanian agribusiness “value chains”.
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By GlobalDataTarek El Sherbini, head of agribusiness for the southern and eastern Mediterranean at the EBRD, said: “Almarai is an important partner of the EBRD and a key player in the food sector in the Middle East and North Africa. This transaction marks another step in the expanded cooperation across common economies of operations.”
Almarai is listed on the Saudi stock exchange with a market capitalisation of approximately $3bn.
