Almarai company is one of the largest FMCG \ Food companies in the middle east - in this presentations we review its current portfolio and look at the growth opportunities.

1. Growth opportunities for Almarai
Hult – EMBA 2016 - OUSHA Group 3 - Toolbox Assignment 27 October 2014
BY : Taher AlDabbagh, Minna Herranen, Sayed El Anany, Harri Taipale, Hasnain Javed

2. Agenda
1. Executive Summary
2. Financial Highlights
3. Growth Analysis
 Business Life Cycle
 Competitive Advantage
 Portfolio Analysis
 Growth options - What is possible for Al Marai
 Surplus Value
4. Recommended Solutions and Key Asks

3. Executive Summary
 Key Finding : Al Marai Can continue a profitable growth at 10+% in the next 5 years by :
 Introducing New Products: ICE CREAM, starting in Saudi Arabia
 Expanding Geographically: Expanding Dairy Business in north Africa (Tunisia , Algeria & Morocco ).
 Driving Efficiency: Consolidating Bakery factories and driving surplus value.
 Based on CEO endorsement of this Analysis, a detailed Business Cases will be conducted for
CEO & Board approval.
This is a high level Presentation highlighting findings of several analysis conducted to examine the potential growth of
al Marai.

4. YTD Q3 2014 Product Categories Sales Percentage & Growth
42%
14%
13%
12%
10%
8%
1%
Product Categories - % of Total Sales Q3
YTD 2014
Fresh Dairy
Cheese & Butter
Fruit & Juce
Bakery
Long-Life Dairy
Poultry
other
7%
10%
10%
13%
15%
27%
0% 5% 10% 15% 20% 25% 30%
Cheese & Butter
Long-Life Dairy
Bakery
Fresh Dairy
Fruit & Juce
Poultry
YOY Growth % Q3 2014
Growth %
Source : Al Marai Q3 2014 report, http://almarai.com/en/investors/presentations/

5. YTD Q3 2014 Geographical Countries Sales Percentage& Growth
66%
9%
5%
5%
5% 5%
2% 2% 1%
Sales % By Country - YTD Q3 2014
Saudi
UAE
Oman
Egypt
Kuwait
Qatar
Jordan
Bahrain
other
8%
9%
11%
15%
16%
19%
23%
26%
0% 10% 20% 30%
Jordan
Kuwait
Saudi
Bahrain
UAE
Oman
Egypt
Qatar
YOY Growth % Q3 2014
Growth %
Source : Al Marai Q3 2014 report, http://almarai.com/en/investors/presentations/

6. Business Life Cycle
Almarai is a growing company and it
can still grow with same business
model than in the last couple of years.
Almarai is in business life cycle strongly
in growing stage:
• Bakery business started 2007 1)
• Poultry business started 2009 1)
• Geographical expansion started
2009 1)
• Infant nutrition started 2010 1)
• Almarai has strong pipe line of
innovations in each product
categories 2)
Source : 1) http://almarai.com/en/about-us/history/
2) Al Marai Q3 2014 report, http://almarai.com/en/investors/presentations/

7. Competitive Advantage Dairy Products
Broad
Narrow
COST LEADERSHIP
Nadec
Al Rawabi Dairy Company
Cost Focus
Saudi Dairy & Foodstuff Company
Al-Ain Dairy
Differentiation
ALMARAI
Nestle S.A
AL-SafiDANONE
DIFFERENTIATION FOCUS
United Kaipara Dairies Company (PSC)
Source : team collective feed back (perception ) as end users

8. Portfolio Analysis
Infant products are
new business , not
fully proven yet
,however with proper
focus it can in few
years become a star
Juices has proven well in the last
few years , Bakery & poultry the
relatively new lines are also
catching up in the market
Dairy products are the core of al Amarai
company and represent a solid cash
cow for last decided, Need to continue
it’s differentiated and leadership position

9. How we can Grow the Business
1. Improve
2. Replicate
4. Reinvent
3. Evolve
Based on the Portfolio Analysis, the following growth option is to be adapted
Bakery
Poultry
Cheese
Dairy Expand Dairy (Key Cash Cow product ) to
Tunisia , Algeria & Morocco
Enlarge and consolidate Bakery factories
Ice Cream Capitalize on availability of raw
material and introduce Ice cream in
key and home country Saudi Arabia

10. Surplus Value of new Milk packing
Extra 1 Million Milk bottle can be transported under no
addition operation cost with introduction of a New packaging
Requiring less storage space
Minimizing Logistic cost is Key to Al Marai as it has expanded both in products and
geographies.
photos are published on
https://www.google.com.kw/search?q=Al+maria+transportation&biw=1920&bih=931&source=lnms&tbm=isch&sa=X&ei=sTNEVInpGuL
MyAOc94HoDA&ved=0CAYQ_AUoAQ#tbm=isch&q=Al+marai+milk+transportation
0
0.5
1
1.5
2
2.5
3
0 500 1000 1500
# of transporation Tractors
Surplus value of new packing.
Growth Caused by
Changeing the
trasportation Tractors
model.
Million of Milk
Bottle
transported
Growth Caused by
increasing
trasportation
Tractors .New Package ; easy to
carry ; easy to transport

11. Conclusion (1 out of 2 )
Almarai is a growing company and it can continue to grow about 10% with the same way than in the past years.1)
The concentration should be in new innovations.
 New innovations in each category needed. Focus should be :
 To support market growth for our cash cows and rising stars (Fresh Dairy, Long-life Dairy, Yogurts, Cheese &
Butter, Poultry and Juices)
 To support market needs and quality for our rising stars (Infant Formula, Dessert and Bakery) to be able to
strengthen our brand in these markets.
 Also focused Marketing campaign for Long-life milk, Enfa grow infant formulas and Vetal fortified fresh milk in
focus countries Egypt and UAE is needed.
 Strengthening of special milk products brand image throughout the region by consumer promotions and
advertisement campaign.
 Poultry and Bakery products sales enhancement in Egypt
 Selective Geographical Expansion
 Based on preliminary analysis , following markets are good potential as new entry for the dairy business
(Tunisia , Algeria & Morocco )

12. Conclusion (2 out of 2 )
 New Product launches
 premium packaged Ice cream business has a potently higher margins than dairy and we would
recommend exploaring launching it in Saudi Arabia as a start
 Driving efficiency and maximizing surplus value
 it is critical to Consolidate all Bakery Factories in Saudi Arabia , the new obtained land in king Abdulla
economic city in Rabag to shall be used , this shall drive operational cost down and will lead to increased
capacity 1)
 Last year Marai distribution expenses increased % was higher than Sales (17,5% VS 11,7% 2). Introducing
new means to lower logtic cost is a must , by the proposed new packaging we can reduce it by an
estimated 2 to 4 %
 Key Asks
 CEO agreement to farther study the details if the proposed growth expiation strategy and a agreement
to allocate SR 5 million Riyal to hire a management consultant company and a market research
company for the needed studies , if agreed after 3 months a full business case will be presented.
Source : 1) http://almarai.com/en/investors/press-releases/
2) A http://almarai.com/en/investors/presentations/