RIYADH, 7 July — French investments in the Kingdom have gone up by over 67 percent from SR743.6 million to SR1.24 billion after a French multinational company formally acquired majority stake Al-Safi Foods Est., which owns the world’s largest integrated dairy farm. The joint venture deal involved the purchase of 50.1 percent shares of Al-Safi by French firm Danone International at SR500 million.
“France now holds third position in the list of countries with the biggest investments in Saudi Arabia after the United States and Japan,” said Muhammad Al-Sarhan, managing director of Al-Safi-Danone Company, here yesterday. He said France was placed sixth in terms of capital investment in Saudi Arabia before the Al-Safi acquisition.
Al-Sarhan said “the deal between Al-Safi Food Est, a subsidiary of Al-Faisaliah Holding Group and Danone International Group, had been formalized following the signing of partnership contract recently.”
The new joint venture Al-Safi-Danone had commenced its operation with labeling all its products distributed in the Kingdom and outside with a new logo.
Al-Sarhan said Danone would make available its extensive research and development capabilities to the Saudi venture. “The emphasis (will be) on health and total quality,” he said.
“The future will also see more employment and training opportunities for young Saudis in the dairy sector,” Al-Sarhan said, adding that the new company would also target over 40 million consumers in the neighboring markets.
Al-Sarhan said the agreement would help Al-Safi to use Danone’s world-class food processing facilities and state-of-the-art technology for research and development. “This will enhance competitiveness of Saudi dairy products in the international market,” especially with the Kingdom’s entry into the World Trade Organization.
Al-Safi’s parent company, Al-Faisaliah Group, with its 14 subsidiaries and combined annual sales exceeding SR2 billion, is listed among the top 20 Saudi companies. Danone International, a multinational French group involved in the production of food and beverages, has had operations in more than 120 countries around the world.
