JEDDAH, 24 May 2005 — Shares in newly floated Saudi Dairy and Foodstuff Co. (SADAFCO) almost doubled in value to SR505 ($134.7) on their first day’s trading on Saudi Arabia’s stock exchange yesterday.
The shares, which were offered at SR260 each last month, opened yesterday at SR610 and peaked at SR640 before easing slightly. Shares worth SR185 million changed hands during the day.
SADAFCO’s initial public offering was about six times oversubscribed.
SADAFCO had offered 1.95 million shares, or 30 percent of the firm’s capital, in the Kingdom’s latest high profile IPO.
SADAFCO managing director, Ahmed Mohammed Hamid Al-Marzouki, said recently “the IPO represents a major step forward for SADAFCO and provides an opportunity for investors to share in the success of a company that has a solid track record of growth and profitability.”
The benefits for SADAFCO listing on the Saudi Arabian stock exchange include greater disclosure of operations and financial performance.
“This will result in a higher profile and an improved ability to raise capital in the future,” Al-Marzouki said.
The company was established in 1976 with the formation of Danish Saudi Dairy Company, a joint venture between Saudi businessmen (48 percent), Kuwaiti businessmen (48 percent) and Danish Turnkey Dairies (4 percent).
Production began in 1977 in Jeddah. In a steady expansion program, the company acquired the Saudi Danish Dairy Company of Riyadh in 1987 and in 1991 merged with Gulf Danish Dairy Company and Medina Danish Dairy Company.
Since 1991, the company has expanded the product range from milk related products with the introduction of tomato paste, cheeses, hommos, water and snacks by the acquisition of specialist producers.
SADAFCO has five factories in the Kingdom and two in Egypt. It produces milk, flavored milk, juices, ice cream, water and snacks. — With input from agencies