Milk producer concerned over rising feed prices

RIYADH: A top executive of the Riyadh-based Almarai Company, the world’s largest integrated dairy giant, has expressed concerns over the rising prices of animal feed and said that the food producers and consumers across the Middle East including Saudi Arabia are expected to feel the sting of rising commodity prices at global level.
Abdulrahman A. Al-Fadley, Almarai’s chief executive officer, said that the company has geared itself well to cope with soaring prices and to continue performing better on all fronts.
Addressing a press conference on Monday, Al-Fadley commented on the rising prices of feed stocks including corn and soy. The soaring prices are caused by the inclement weather conditions including a drought in the US, low rainfall in Russia and a weak monsoon season in India.
Al-Fadely gave an overview of the Saudi dairy sector with special reference to the growth of Almarai, it vision and its future expansion plan.
The press meeting was attended by top Almarai executives including Georges P. Schorderet, Almarai chief operating officer; Paul Louis Gay, chief financial officer, and Hussam R. Abdulqader, chief of communications and public relations department at Almarai.
Al-Fadley gave a comprehensive presentation before answering questions ranging from food security, employment of Saudi nationals to new products and Almarai’s acquisitions outside the Kingdom.
Referring to the expansion plan of Almarai, Al-Fadley said that “Almarai was going ahead with its new plans and projects.”
In 2009, Almarai embarked on a new development phase with initiatives for geographic expansion through the establishment of a joint venture with PepsiCo to form International Dairy and Juice (IDJ) firm. In the same year, Almarai acquired HADCO as part of investing in a new product category through the acquisition, modernization, and building of new facilities to form Alyoum for poultry products.
In 2010, Almarai entered into a joint venture with Mead Johnson Nutrition, one of the world’s leading infant nutrition companies, to form the International Pediatric Nutrition Co. (IPNC) to produce, market, and distribute infant nutrition products in the MENA region under the brand name Infa. Production is expected to commence later this year. On the other hand, the company is devoting considerable resources to train and absorb young Saudis into its workforce, he said.
“Currently, Almarai has over 4,700 Saudi employees on its payroll,” said the CEO, adding that staff development, through on-the-job training and education, equips the employee with the technical skills required to enable them to perform their jobs effectively and efficiently in the dairy sector.
To this end, he noted that Almarai has established the Almarai Food Processing Academy in conjunction with an international reputable organization. Almarai is also involved in the University Students Co-operation Training program, he added.
Asked about the products and their quality, he said that Almarai provides nutritious and healthy products to consumers of all ages including dairy products, cheese, juices, bakery products, poultry and infant formula under the brand names Almarai, L’Usine, 7Days, Alyoum and Infa.
Al-Fadley pointed out that Almarai Company is certified (ISO 9001-9002) across all operational divisions, including farms, procurement, processing, quality product development, distribution, and supply chain.
Referring to a large number of awards and commendations won by Almarai, Al-Fadley said that Almarai was recognized as the “Leading Quoted Company for Investor Relations” by the Middle East Investor Relations Society. In 2011, Almarai Vetal won the “Drop Award for Dairy” from the Arab Bureau for Food Industries and Arab Beverages Association.
He pointed out that Almarai serves more than 48,500 retail customers per day. “Our dairy herd consists of more than 135,000 Holstein cows,” he noted. The cows produce an average of over 13,000 liters of milk every year; almost double the European average, he observed.
Almarai, he said, produced an annual average of more than 900 million liters of milk.
He pointed out that Almarai’s facilities that include farms and plants among others cover a total area of over 700 million square meters.
“Furthermore, Almarai is committed to adopting and implementing state-of-the-art production processes, plant design, and operating systems to reduce and conserve water consumption,” he said.
The company, he said, has been involved in a number of community initiatives as part of its corporate social responsibility.
Almarai launched the Award for Scientific Creativity with the King Abdulaziz City for Science & Technology (KACST) to encourage scientific research, he noted.
The company also launched an additional scientific award —The Almarai Veterinarian Award — to support the veterinary profession, in addition to collaborating with the GCC’s Arab Bureau for Education to organize a Scholarship Excellence Award for students to encourage the pursuit for academic excellence.