Almarai looking to enter Pakistani market

Published: May 22, 2010
Saudi food giant seeking to acquire Haleeb Foods.

Saudi food giant seeking to acquire Haleeb Foods.

KARACHI: The Almarai Company, Saudi Arabia’s largest producer of packaged dairy products, is looking to enter the Pakistani market and is likely to do so through an acquisition, according to people familiar with the matter.

Haleeb Foods, a Lahorebased dairy company, is being stated as the Saudi giant’s target. Haleeb Foods, however, has denied rumours that it is being acquired and the CFO stated that he expected the company to survive as an independent entity. “There have been no discussions of an acquisition at the management level,” said Arif Ktchlew, chief financial officer of Haleeb Foods. Almarai was established in 1976 as a partnership between the Irish agrifood investor Alastair McGuckian and his brother Paddy, and Prince Sultan bin Mohammed bin Saud Al Kabeer of Saudi Arabia.

The company invests in dairy products such as milk, cheese, cream and yoghurt. In addition, it also has its own lines of fruit juices as well as other food products. The Riyadh-based company went public in 2005, listing on the Tadawul, the largest stock exchange in the Middle East. The company earned a net income of 1.1 billion Saudi riyals ($292 million) in the year ended December 31, 2009. As of Wednesday’s close, the company had a market capitalisation of SAR 22.1 billion ($5.9 billion). It is not yet known what price Almarai is offering for Haleeb, which is an unlisted company, or even if the discussions have progressed to the stage where a price would be discussed.

However, according to sources familiar with the matter, Haleeb turned down an acquisition bid from South Korea’s Lotte Group earlier in the year, suggesting that negotiations with Almarai had progressed to a point where the company was confident of a deal. Lotte Group did not confirm any bids for specific companies, but in an earlier interview, Adnan Samdani, head of corporate strategy at Lotte Pakistan, acknowledged that the firm was looking for companies that were “available for acquisition” in the food sector.

Sources familiar with Almarai’s pending transaction say that the company is looking to invest as much as $500 million in Pakistan’s food and dairy sector. The move comes against the backdrop of governments from the Middle East looking to acquire large tracts of agricultural land in Pakistan to secure their food supply. It is not clear if this investment is part of the Saudi government’s efforts or if it is a purely private transaction.

Almarai’s management could not be reached for comment. Should the transaction go through, Almarai will be the second foreign company to enter the Pakistani dairy sector after the Swiss food giant, Nestle, which acquired Milkpak in 1988. Nestle had also made a Rs6 billion bid for Haleeb Foods, but the company declined to sell at the time.

Published in the Express Tribune, May 22nd, 2010.

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Reader Comments (10)

  • May 22, 2010 - 5:01PM

    Haleeb’s brand loyalty has long been shifted to Olpers due to their compromise on quality standards. It would be difficult for the new entrant to cope up with Engro Foods when they have succesfully managed to tap large chunk of satisfactory consumers.Recommend

  • Humna
    May 22, 2010 - 7:58PM

    I was an avid consumer of Haleeb milk for a very long time, ever since the quality died i have switched to other alternatives like milk pack and olpers. Though it doesn taste that good, atleast it isn’t sour! Now its difficult for me to resort back to haleeb after these horrific experiences, why would a reputed food chain would want to buy it anyway?Recommend

  • Basically, all the packaged milk are not fresh. They have expiry of 3 months (more or less). A product such as MILK, which should be fresh, is packed in a box!


    I don’t trust the open milk vendors, so I use Millac, which is fresh, hygienic and expires in 3 days!

    Having said all this, I believe Almarai should enter Pakistan, as competition is always welcome. I do know that Almarai products are of the highest quality (even if they are packaged) and so I look forward to Almarai to enter Pakistan. No local dairy company/product is even close to what Almarai’s quality is.Recommend

  • haroon
    May 23, 2010 - 12:23AM

    It would be a wonderfull experience for pakistanis having Almarai with them. we in saudia are adicted to Almarai products, may it be dairy or fresh juices. Alarai fresh milk here is not packed in tetra pack rather it is botteled and expires in 4 days. its natural juices are without any preservaives and colours making them very healthy and tasty, especially for kids. we welcome Almarai food in pakistan and hope it will maintain its reputation there as well.Recommend

  • Israr Ahmed
    May 23, 2010 - 12:56AM

    since few year i am working in K.S.A so i am familiar with ALMARAI who is the giant in food especialy in milk and the other one is NADEC if ALMARAI comes to pakistan and invest in the field of dairy so i do hope that it can be a very good competitor in local market as well in middle Nestle & Haleeb lost their name in dairy field.Recommend

  • Asim Kaleem
    May 23, 2010 - 2:00AM

    Almarai ………. my favorite dairy products range which I use in Bahrain. Great to have them in Pak…..Recommend

  • Sohail Danish
    May 23, 2010 - 11:56AM

    Its really good if ALMARAI products are introduced in Pakistan and we should welcome them but i just say why do they need to be here and why do people appreciate them? just because of our national dairy products have lost their standard and name like haleeb,so our national companies must think over it and they must do something to regain their name and quality…Recommend

  • @Haroon

    Thank you for giving us that info and enlightening us on this.

    That’s greater, I didn’t know that Almaria’s Milk came in bottles and expired in 4 days.

    If that is what they launch in Pakistan also, then I am sure that it will beat all Dairy companies in Pakistan, particularly Milk Pak, as it has, I don’t know, how many chemicals/vitamins added to make the milk ‘more nutritious’ and lose it’s actual natural flavor/nutrition.Recommend

  • That’s even greater*Recommend

  • FAHD
    May 26, 2010 - 12:27AM

    i used this brand in dubai and since then im in love with it. the only reason is taste n fragnance . i am sure it will capture pakistan market due to good natural taste . Recommend

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