BMI's Executive Summary

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Saudi Arabian food and drink companies continued to flex their regional muscle, as discussed in BMI's recently published Saudi Arabia Food & Drink Report for Q108. In September, locally-based beverage company Aujan confirmed that it will be building two beverage factories in Iran to take advantage of the country's strong forecast growth. While most international investors have shied away from investing in Iran, Aujan has decided that the country's large, young population, and recent economic growth warrant this level of investment. The company will invest US$100mn in two factories, a beverage filling plant and an aluminum can factory close to the capital city Tehran. It also announced that it has plans to invest US$30mn in expanding its production facilities in Dubai and the modernisation of its Damman production facilities. According to the company, it is also considering investing in similar projects in Iraq and North Africa, as the company embarks on something of a regional expansion spree. Aujan manufactures, markets and distributes its soft drink and confectionery portfolio throughout Saudi Arabia and in neighbouring countries including Jordan, Yemen, Oman, Bahrain, Kuwait, the United Arab Emirates, Qatar and many other countries further afield. With a long history and established reputation, Aujan is well-positioned to capitalised on the growing consumer demand in many of the region's emerging markets.

The country is also known for the quality of its dairy products, with Saudi Arabian dairy products popular across the Gulf and wider Arab world. The country's dairy industry has developed rapidly in recent years, as higher incomes, increasing use of white goods, growing consumer interest in healthy eating and the continued emergence of major domestic manufacturers have seen the sector transform itself from a minor small-scale industry into a major economic contributor in little over a decade. Production has grown to the extent that Saudi Arabia is almost self-sufficient in dairy products, with this sector accounting for the majority of its exports to other Gulf Cooperation Council (GCC) countries.

A major beneficiary and driver of this growth has been Al Marai, the largest dairy foods company in the Middle East and the market leader in Saudi Arabia. The company has a 40% share of the Saudi dairy market and a 30% share in the wider Gulf region. In October the company posted more strong financial results, with third-quarter profits up by 52% year-on-year, beating analysts expectations and making this the company's sixth consecutive record quarter. These impressive results reflect how the company has benefited from the rising demand for dairy products across the region, which is largely the result of continuing economic development. The outlook for the Saudi economy is quite positive, as it will continue to be propelled by government and consumer spending, and we see a pick-up in 2008, with real GDP growth expanding by 4.2%, followed by 3.9% in 2009. With record-high oil prices fuelling economic growth, consumer confidence is growing, although a recent surge in inflation rates has been felt. However, despite this recent inflation surge, the overall outlook for the Saudi Arabian food and drink sector remains positive.

Contents

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Chapter 1 – Business Environment

Business Environment Rankings

Table: Middle East Business Environment Rankings

SWOT Analysis

Saudi Arabia Food & Drink Industry SWOT

Saudi Arabia Political SWOT

Saudi Arabia Economic SWOT

Saudi Arabia Business Environment SWOT

Economic Outlook

Table: Economic Activity

Chapter 2 – Retail

Regional Overview – Discount Retailing

Table: Discount Store Sales in US$bn

Table: Key Players in Discount Retail

Industry Forecast Scenario

Table: Saudi Arabia Mass Grocery Retail Sales Value Historical Data And Forecasts

Company Developments

Market Overview – Saudi Arabia

Table: Structure of Saudi Arabia’s Mass Grocery Retail Market By Number Of Outlets

Table: Structure of Saudi Arabia’s Mass Grocery Retail Market By Volume of Sales

Chapter 3 – Food & Drink

Dairy In The Middle East

Table: Milk Production By Volume (tonnes)

Table: Key Players

Industry Forecast Scenario

Table: Saudi Arabia Food Consumption Indicators Historical Data And Forecasts

Table: Saudi Arabia Sectoral Trade Indicators Historical Data And Forecasts

Table: Saudi Arabia Food Sub-sector Indicators Historical Data And Forecasts

Table: Saudi Arabia Drinks Industry Indicators Historical Data And Forecasts

Industry Developments

Company Developments

Market Overview – Saudi Arabia

Table: Saudi Arabia Agricultural Production – Historical Data

Chapter 4 – Tobacco

Industry Forecast Scenario

Table: Saudi Arabia Tobacco Indicators Historical Data And Forecasts

Industry Developments

Market Overview

Chapter 5 – Competitive Landscape

Key Players

Table: Key Players In Saudi Arabia’s Mass Grocery Retail Sector

Table: Key Players in Saudi Arabia’s Mass Grocery Retail Sector

Regional Company Case Studies

Lulu Company Profile

Table: Lulu Outlets

Ülker Company Profile

Table: Ülker

Table: Ülker Regional Presence

Aujan Industries Company Profile

Table: Aujan Industries - The Figures

Table: Aujan Industries - Production Facilities - Saudi Arabia

Table: Aujan Shareholders

Mecca-Cola’s Performance In The Middle East

Table: Mecca-Cola Global Presence

Table: Mecca-Cola - The Figures

Company Analysis

A K Al Muhaidib and Sons Group – Giant Stores

Savola Group – Al Azazia Panda

Aujan Industries

Arla Foods

Al Marai

Saudi Dairy and Foodstuffs Company – SADAFCO

Masafi

BMI Forecast Modelling

How we generate our industry forecasts

Retail Industry

Sources

Competitive Landscape for Middle East & Africa Food & Drink Reports: Sample of  
Companies Ranked

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At-a-glance perspective on the strengths, weaknesses, opportunities and threats facing each market’s food & drink industry. BMI also provides similar economic and business environment studies. Company SWOTs (Strengths, Weaknesses, Opportunities, Threats) covering all leading food and drink companies operating in each market, including competitive intelligence on geographic presence and competitive positioning of multinationals against local companies; leading products, services and brands; sales and local market share; foreign direct investment, projects, partners and acquisition strategy. Illustration of the industry via rankings tables comparing revenues, number of outlets, number of employees and registration dates. BMI analyses each company’s performance, market position, strategy and investment potential.

Network of Middle Eastern & African Food Sources

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BMI's Middle Eastern & African Food Reports are based on an extensive network of multilateral organisations, government departments, food industry associations, chambers of commerce and company reports. Information sources include: