JEDDAH, 5 July 2005 — Saudi Arabia’s dairy and food giant SADAFCO yesterday announced its plans to expand into new markets, following its agreement with Tetra Pak Saudi Arabia.
The agreement envisages that SADAFCO will invest SR40 million in the development and production of a new packaging solution called “Tetra Recart.”
This investment follows the success of SADAFCO’s IPO and fits with its core strategy of developing new and profitable growth opportunities in the coming years.
SADAFCO Managing Director Ahmed Al-Marzouki and Tetra Pak Managing Director Amar Zahid signed the agreement at a ceremony that followed a press conference at the SADAFCO office here.
“The new packaging technology will revolutionize the food industry in Saudi Arabia and across the Middle East,” Al-Marzouki said. “It will open new opportunities for SADAFCO as it strives to reach new markets and consumers with a full range of food products including ready-to-eat vegetable and fruit items like beans, diced tomatoes, and carrot,” Al-Marzouki said.
“SADAFCO is confident that with the Tetra Recart, the company will be able to expand its market share into the traditional canned food market estimated at around SR1.1 billion,” he added.
Al-Marzouki has also indicated that the food company will heavily invest in building a new food brand, which it plans to sell through distributor agreements to be negotiated throughout the Gulf Cooperation Council states.
The Tetra Recart technology, being pioneered by SADAFCO, is set to mark a turning point for the market with its operation in early 2006.
“It will transform the face of food packaging across the Saudi market,” Amar Zahid said.
The convenience of the package to the consumer and the potential it has to broaden the scope of foods available in lightweight, easy to open, hygienic and recyclable packaging is a “remarkable step forward” in the food industry, he added.
The main focus during the development process of new cartons has been on providing consumers with greater convenience making the handling — opening and serving - easier and safe.
Another benefit is that if the carton remains unopened, its contents stay fresh and healthy without the need for refrigeration for up to one year.
The package itself also delivers economies in transport, improving loading efficiency with consequent reduction in fuel use and thus protecting the environment.
“Retailers always welcome safe and innovative packaging solutions such as the Tetra Recart especially as they bring about a point of difference into a food category that has not seen any special enhancements for years,” a research head of a supermarket chain said.
“Anything that benefits the consumer is welcome, and so we’ll look forward to the changes that the Tetra Recart will bring to the food industry,” said Abdullah Muhammad Tahir, a Saudi businessman speaking on behalf of consumers.
