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October 31, 2013

SAUDI: Irish Dairy Board plots Middle East expansion

The Irish Dairy Board is looking to further expand in the Middle East and north Africa through fresh investment in Saudi Arabia, including setting up a new plant.

By Dean Best

The Irish Dairy Board is looking to further expand in the Middle East and north Africa through fresh investment in Saudi Arabia, including setting up a new plant.

The co-operative is to build a cheese manufacturing plant at a facility owned by local dairy distributor Al Wazeen Trading in Riyadh, the Saudi capital. The IDB is also set to buy a 75% stake in Al Wazeen.

The EUR20m investment will “further strengthen” the IDB’s position in Saudi Arabia, the company said. However, Ireland’s largest dairy exporter is also looking to use Saudi Arabia as a hub for its business in the wider Middle East and north Africa.

“This investment is strategically very important as it allows us to expand our business throughout the MENA region,” Kevin Lane, the IDB’s CEO, said.

The new facility will be used to produce white cheeses, which the co-op said were “hugely popular” in the Middle East, for the foodservice and wholesale channels.

The plant will initially be used to make cheese for the Saudi market, although the IDB said it “anticipated” using the country as a “manufacturing hub” for the wider region.

The cheese will be made using milk protein ingredients shipped in from Ireland and recombined at the new plant. Milk production in Saudi Arabia is low due to the lack of water to provide crops for animal feed.

The investment is part of the IDB’s strategy for international expansion as it gears up for the end of EU quotas on dairy production. Once the quotas are removed, dairy production in Ireland is set to increase and processors in the country are looking for new markets.

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