RIYADH: Intending to increase its share in the Kingdom’s ice cream market, Saudia Dairy and Foodstuff Co., SADAFCO, has established an ice cream factory worth SR130 million ($34 million) in Jeddah.
With a 28 percent market share, the company seeks to dominate the ice cream sector in the Kingdom and the new facility aims to raise its production capacity to achieve the goal.
“Ice cream is a high margin profitable business for SADAFCO,” Umar Farrukh, general manager - frozen at SADAFCO told Arab News.
The company reported a decline in profit during the nine months ending Dec. 31, 2021, attributed to lower sales volumes due to the pandemic, an increase in the value-added tax from 5 to 15 percent, and higher material and logistics costs.
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Market share
With a 28 percent market share, the company seeks to dominate the ice cream sector in the Kingdom as it expands output thanks to the new facility
The ice cream business of the company, however, performed very well contributing to 17 percent of the company’s total annual turnover, Farrukh said at the inauguration ceremony of the Jeddah factory.
The official was upbeat about the company’s ice cream business saying it will continue to “support the company in making profits.”
The 19,800-square-meter factory has already become operational in the coastal city of the Kingdom.
“We can run any line, all of our distribution of ice cream in Saudi Arabia and outside is happening from this factory as we speak,” Farrukh told Arab News.
Ice cream is a high margin profitable business for SADAFCO
Umar Farrukh, business head - frozen at SADAFCO
SADAFCO now has a frozen warehouse capacity of 6,000 pallets, doubling its mixing and pasteurization capacities.
“The same products which were being produced in the previous line can be run on this new line three to five times faster,” said the official.
Talking about the company’s plans, he said the consumers will soon be able to enjoy new products that were previously unavailable in the Kingdom.
“We have the room to produce exciting new products for consumers.”
With the new facility, Farrukh is optimistic about the company capturing more market share in the Kingdom. “We aspire to become a dominant leader in the category, especially with the new capacity being unlocked,” he added.
Farrukh said with the increased capacity, the company seeks to explore new markets outside the Kingdom as well.
The Jeddah plant today has around 150 employees and out of the total 45 percent of these roles are filled by Saudi females. The company plans to increase the ratio of Saudi female workers to 50 percent by the end of the year.
According to Farrukh, the snacks industry in Saudi Arabia is worth about SR6 billion. “Ice cream makes a very small part of that,” he said.
“Ice cream products in the Kingdom have a very low per capita consumption compared to the global market and a very low freezer per capita versus the developed world,” which indicates the growth opportunities present in the sector.
