RIYADH: In a bid to increase its share in the Kingdom’s ice cream market, Saudia Dairy and Foodstuff Co., SADAFCO, has established an ice cream factory worth SR130 million (34 million dollars) in Jeddah.
With a market share of 28%, the company seeks to dominate the ice cream sector in the Kingdom and the new facility aims to increase its production capacity to achieve this goal.
“Ice cream is a profitable, high-margin business for SADAFCO,” Umar Farrukh, business manager – frozen at SADAFCO, told Arab News.
The company reported lower profits in the nine months ending Dec. 31, 2021, attributed to lower sales volumes due to the pandemic, an increase in value added tax from 5% to 15% and at higher material and logistics costs.
The company’s ice cream business did very well, however, contributing 17% of the company’s total annual revenue, Farrukh said at the Jeddah plant’s groundbreaking ceremony.
The manager was optimistic about the company’s ice cream business, saying it would continue to “help the company turn a profit”.
The 19,800 square meter factory is already operational in the coastal city of the Kingdom.
“We can handle any line, all of our ice cream distribution in Saudi Arabia and outside is from this factory as we speak,” Farrukh told Arab News.
SADAFCO now has a frozen warehouse capacity of 6,000 pallets, doubling its blending and pasteurization capacities.
“The same products that were produced in the previous line can be run on this new line three to five times faster,” the manager said.
Speaking about the company’s plans, he said consumers will soon be able to enjoy new products that were previously unavailable in the Kingdom.
“We have the opportunity to produce exciting new products for consumers.”
With the new facility, Farrukh is optimistic about capturing more market share in the Kingdom. “We aspire to become a dominant leader in the category, especially with the new ability being unlocked,” he added.
Farrukh said that with the increase in capacity, the company was also looking to explore new markets outside the Kingdom.
The Jeddah plant now has about 150 employees and out of a total of 45% of these positions are occupied by Saudi women. The company plans to increase the proportion of female Saudi workers to 50% by the end of the year.
According to Farrukh, the snack industry in Saudi Arabia is worth around SR6 billion. “Ice cream makes a very small part of it,” he said.
“Ice cream products in the Kingdom have a very low per capita consumption compared to the global market and a very low per capita freezer compared to the developed world,” indicating the growth opportunities present in the sector.