The European Bank for Reconstruction and Development (EBRD) will lend up to $100m to food and beverages producer Almarai for new investments in Egypt and Jordan, the Bank said on Wednesday.
The Saudi company operates in Egypt and Jordan through its respective subsidiaries Beyti and Teeba. Both subsidiaries are 52% owned by Almarai, and 48% owned by PepsiCo, with whom Almarai set up a joint venture entitled International Dairy and Juice Limited in 2009.
In Egypt, the loan will allow Beyti to fund additional dairy and juice production capacity to address increasing demand, and the associated working capital that comes along with it while in Jordan the proceeds will enable Teeba to strengthen its capital base and provide fresh funding to support its permanent working capital needs.
A diagnostic study of milk producers, processors, and intermediaries in Jordan will highlight best practices and potential improvements in the raw milk supply chain in the country. The study, funded by the European Union, will aim to identify bottlenecks in the sector and develop recommendations.
As well as boosting further integration and efficiency in the Egyptian and Jordanian dairy and juice sectors, the loan aims to facilitate further foreign direct investments in Egyptian and Jordanian agribusiness value chains.
“Almarai is an important partner for the EBRD and a key player in the food sector in the Middle East and North Africa. This transaction marks another step in the expanded cooperation across common economies of operations. We are looking forward to continuing our strategic partnership with Almarai,” Tarek El Sherbini, Head of Agribusiness for the southern and eastern Mediterranean at the EBRD said.
Almarai is listed on the Saudi stock exchange with a market capitalisation of about $13bn and is one of the leading food groups in the Middle East and North Africa. The company’s consolidated sales and total assets in 2018 stood at $3.7bn and $8.6bn, respectively.
The EBRD has invested over €7.6 bn in more than 165 projects in Egypt and Jordan since it began investments in the two countries after 2012.