In a move to enhance its milk powder supplier base, Saudia Dairy and Foodstuff Company (SADAFCO) acquired the Polish dairy producer Mlekoma through its subsidiary company SADAFCO Poland. The acquisition agreement grants the Saudi company an initial stake of 76 per cent in Mlekoma Sp z.o.o and its unit Foodexo sp.z o.o (Mlekoma Group), a transaction valued at SR120 million ($32 million).
In Poland, the Mlekoma group owns two plants specialized in the production of powdered, condensed and fluid products as well as whole milk, cream, buttermilk and fat filled powders. In addition, the group’s business activity involves an export business to Europe, Africa, the Middle East and the Far East.
As a result of the acquisition, the financial results for the next quarter of both parties will be consolidated under SADAFCO, as recently announced by the Saudi Stock Exchange (Tadawul). The terms of the agreement stipulate that the existing management board of Mlekoma will continue to serve their managerial roles under the new headship.
Wout Matthijs, CEO of SADAFCO, said: “This move comes out of SADAFCO’s resolute focus on remaining profitable, despite the numerous challenges we face in a highly competitive domestic market. The acquisition offers an option to purchase milk powder from our own powder production facility, which offers both security of supply and remains flexible within the global market.
“We view this acquisition as an opportunity to ensure Saudia-branded products remain in the forefront in the consumers’ minds and continue to contribute to the overall Saudi economy’s growth long into the future.”