New Zealand-based diary giant, Fonterra, which had a 49 per cent stake in Saudi New Zealand Milk Products (SNZMP) – a joint venture with the Saudi Dairy and Food Products Company (SADAFCO) – recently purchased the remaining 51 per cent stake at a value of Dh116 million.
The acquisition of the joint venture, which has a manufacturing facility in Damam, Saudi Arabia, is a step in securing Fonterra's current manufacturing capacity requirements for the Middle East and Africa (MEA) and the Commonwealth of Independent States (CIS) region, the company said.
Speaking to Emirates Business, Amr Farghal, Managing Director of Fonterra MEA and CIS, said the UAE is an important part of its expansion plan.
How important is the UAE market in Fonterra's expansion plans in the GCC?
The UAE will continue to be central to Fonterra in the Middle East. It currently represents a sizeable percentage of our business. With the country's growing population and the boom we are experiencing here in tourism and hospitality, I am very optimistic about Fonterra's performance in the UAE.
As far as our expansion plans are concerned, within the GCC we will continue focusing on strengthening the fundamentals of our business and evaluating the opportunities to launch new products and new categories. Beyond the GCC, we have very clear criteria to evaluate the potential of new markets. We prioritise our expansion plans accordingly, based on the ease of entry and existing synergies with our core markets.
How are the prices of Fonterra's products in the UAE gong to look like, given the much lower inflation rate here compared to other GCC countries?
Fonterra's strategy is to always offer our customers and consumers the highest quality at the right price. Our aim is be competitive at all times in the market place, and we will always ensure that our pricing strategy reflects the functionality and value addition of our brands and products.
Can you tell us more about the other GCC countries you are looking at for further expansions?
Fonterra has established a presence in all the GCC markets and we are always looking for opportunities where we can further expand the presence of our brands. Full ownership of SNZMP will help us deliver on our strategic priorities.
What new products are you going to introduce?
We are constantly looking at new formats and formulations to meet consumer and foodservice needs. For example, we introduced Anchor Culinary Cream into the food market after we saw a need in hotel kitchens and restaurants for a high quality cream that performs well under heat and provides great flavour, while also saving chefs time and money in the kitchen.
This product has been well received by our customers.
Anlene, an adult nutrition milk powder, is another product developed and launched by Fonterra in the region to help in the fight against osteoporosis, which is a dangerous disease spreading rapidly across the GCC. Anlene is a leading brand throughout Asia and, thanks to our awareness campaigns and grassroots activities, it is becoming the leading brand in adult nutrition milk powder here in the UAE, as well as in other GCC markets.
Dairy product prices have struggled to remain stable? Have milk sales fallen due to high prices?
Milk is a globally traded commodity, so there will always be fluctuations in price based on supply and demand. However, milk and other dairy products will always be in high demand within the Middle East and the GCC in particular.
Fonterra's strategic priority is to bring the highest quality nutritional value-added products to consumers, and we have been focusing on the introduction of line extensions and new products that deliver on our strategy.
The GCC and the whole of the Middle East rely heavily on food import. What can Fonterra offer in this department?
Fonterra brings more than 100 years of experience in New Zealand's renowned quality dairy industry to the Middle East. Our brands have strong nutritional benefits that meet both general and specific health needs. Whether it's the bone health properties of Anlene or the quality of our full cream milk powders, we offer the best in dairy nutrition backed by international research and the latest in food development.
PROFILE: Amr Farghal Managing Director of Fonterra Mea and CIS
Farghal is responsible for managing the Fonterra Brands business in the Middle East.
A Mechanical Engineering graduate from Egypt's Alexandria University, Farghal joined Fonterra Brands in 2006 following an 11-year career with PepsiCo International, based in countries throughout the Middle East and North America. His accomplishments include directing key strategic business initiatives across PepsiCo's top 29 markets.