Almarai Wins ‘Best Corporate Sukuk’ at Asset Triple A Awards

Almarai, as Best Corporate Sukuk and the region’s largest vertically integrated dairy company and one of the Middle East’s most influential food and beverage producers, made headlines recently with a significant achievement: winning the “Best Corporate Sukuk” award for its $750 million sukuk issuance in July 2023. This notable recognition came during the Asset Triple A Islamic Finance Awards ceremony, held on October 8, 2024, at the iconic St. Regis Hotel in Kuala Lumpur, Malaysia. Known for its rigorous evaluation process, the Asset Triple A Islamic Finance Awards is one of the most respected awards in the Islamic finance sector, celebrating the top innovators and achievers in Islamic finance, banking, and capital markets globally.

Almarai’s award-winning sukuk has received industry-wide attention, with experts and analysts applauding its significance for both Almarai’s corporate strategy and Saudi Arabia’s rapidly evolving Islamic finance sector. Sukuk, often referred to as Islamic bonds, offer companies a unique, Sharia-compliant financing avenue, enabling them to access funds in a way that aligns with Islamic principles. The success of Almarai’s sukuk issuance underscores the growing appeal of sukuk in global financial markets and highlights the strength of Islamic finance in Saudi Arabia.

What Set Almarai’s Sukuk Apart?

Almarai’s $750 million sukuk issuance, a landmark transaction in 2023, stood out for several reasons. Not only was the sukuk deal one of the largest corporate issuances in the Middle East, but it also drew strong demand from a diverse group of investors, both within and outside the Gulf region. Almarai’s sukuk issuance strategy was crafted with an eye on both expanding its market presence and diversifying its capital structure.

The sukuk issuance occurred in a dynamic global market. In recent years, the sukuk market has seen robust growth as investors increasingly seek ethical and socially responsible investment opportunities. Islamic finance provides a unique alternative to conventional financing, making it attractive to investors with diverse cultural and ethical backgrounds.

Asset Triple A Islamic Finance Awards

The Asset Triple A Islamic Finance Awards have long served as a benchmark for excellence in Islamic finance. Organized by The Asset, an esteemed finance publication, the awards program selects winners through an extensive process that includes quantitative and qualitative assessments. The awards aim to honor financial institutions that demonstrate not only strong financial performance but also a commitment to innovation, structural sophistication, and compliance with Sharia principles.

Almarai’s achievement in winning the “Best Corporate Sukuk” award underscores the company’s commitment to upholding the highest standards of Islamic finance. It’s a testament to the careful planning, structural integrity, and strategic vision that went into the sukuk issuance. Given the competitive landscape of the Islamic finance sector, Almarai’s award marks a major accomplishment and positions the company as a role model for other corporations seeking to leverage Sharia-compliant financing solutions.

Related: Saudi’s Almarai Stirs Gulf Debt Market with $750M Sukuk Sale

Almarai’s Role as a Market Leader

Founded in 1977, Almarai has grown into the Middle East’s largest food and beverage producer, with operations spanning dairy, juice, bakery, poultry, and infant nutrition products. Almarai’s business model is unique in its vertical integration, meaning the company oversees every aspect of its production chain — from sourcing and processing to manufacturing and distribution. This integrated approach ensures strict quality control and operational efficiency, which has been key to its success and customer loyalty.

With a product portfolio that reaches millions of consumers across Saudi Arabia, the UAE, Kuwait, Oman, Bahrain, Qatar, Jordan, and Egypt, Almarai has established itself as a household name in the Middle East. The company’s distribution network is powered by one of the largest transportation fleets in the region, allowing Almarai to meet growing demand while maintaining the freshness and quality of its products.

The Sukuk Deal

For Almarai, issuing a $750 million sukuk was not just a financing move; it was part of a broader strategic vision. As a company committed to growth and market expansion, Almarai requires substantial capital to fund its ambitious projects, including state-of-the-art facilities, new product lines, and the expansion of its production capacity. The sukuk issuance was an ideal solution, allowing Almarai to raise funds while aligning with the principles of Islamic finance.

This sukuk issuance is also an important milestone in Almarai’s efforts to optimize its capital structure. As the global economy experiences shifts, with increased interest in sustainable and ethical investments, sukuk have become a preferred choice for many corporations looking for flexible financing options that cater to a broader investor base.

How Sukuk Works?

Sukuk, commonly known as Islamic bonds, differ from conventional bonds in that they adhere to Sharia principles, which prohibit interest payments. Instead, sukuk represents ownership in an asset, a project, or a special investment venture, providing investors with returns derived from profit rather than interest. This structure ensures that sukuk issuances comply with Islamic law, offering an ethical investment avenue that resonates with Muslim investors and others interested in socially responsible investing.

The sukuk market has grown exponentially over the past decade, and its success can be attributed to its unique appeal. In addition to serving as a secure, Sharia-compliant investment vehicle, sukuk offers a level of transparency and ethical oversight that conventional bonds lack. Sukuk issuers are required to disclose the nature of the underlying assets and ensure that funds are used for purposes that align with Islamic principles, making sukuk highly appealing in today’s socially conscious market.

Almarai as the Best Corporate Sukuk

Almarai’s sukuk issuance aligns with Saudi Arabia’s ambitious Vision 2030, a comprehensive plan aimed at reducing the country’s economic dependence on oil by fostering growth in sectors like agriculture, manufacturing, and tourism. As part of this vision, the Kingdom is actively promoting Islamic finance as a key driver of economic diversification.

Almarai’s expansion and investment initiatives are designed to support these national objectives. The funds raised through the sukuk issuance will enable Almarai to strengthen its infrastructure, enhance food security, and contribute to job creation. This aligns with Vision 2030’s emphasis on creating a more sustainable and diversified economy that can withstand global economic fluctuations.

Almarai’s Sukuk Team

The success of Almarai’s sukuk issuance would not have been possible without the expertise and dedication of its leadership team. The sukuk deal was managed by Almarai’s top finance and legal professionals, including:

• Danko Maras – Chief Financial Officer, who led the financial structuring and overall strategic planning.
• Ikram UlHaque – Head of Finance, responsible for managing Almarai’s financial policies and investment strategies.
• Imtiyaz Shaikh – Assistant Treasurer, overseeing the company’s treasury operations and financing strategies.
• Mansour Alwetaid – Senior Legal Counsel, ensuring compliance with legal requirements and Sharia principles.
• Junje Floron – Treasury Manager, who handled the day-to-day financial operations related to the sukuk.

This team’s collective expertise ensured the sukuk issuance was not only financially sound but also compliant with both local and international Islamic finance standards.

Global Growth of Sukuk

The Islamic finance industry has expanded rapidly in recent years, with the sukuk market emerging as a key component of this growth. Globally, sukuk issuance has surged, with estimates suggesting that the market could reach $250 billion by 2025. As more companies and governments turn to sukuk to meet their financing needs, the appeal of Islamic finance is becoming increasingly mainstream.

Saudi Arabia, Malaysia, and the United Arab Emirates are leading the charge in sukuk issuance, capitalizing on the growing demand for Sharia-compliant financial products. Almarai’s award-winning sukuk is a testament to the maturity and sophistication of Saudi Arabia’s Islamic finance sector, which is expected to play a pivotal role in the global economy in the years to come.

The Role of Sukuk

In an era when sustainability and ethical investing are becoming central to investor decision-making, sukuk offers a unique advantage. Unlike conventional bonds, which may fund activities prohibited under Sharia law, sukuk is tied to tangible assets or projects that meet Islamic standards. This ensures that funds are used for productive, ethically sound purposes, such as infrastructure development, renewable energy, and social impact initiatives.

For companies like Almarai, issuing sukuk allows them to attract a diverse group of investors interested in supporting ethical ventures. With sustainability becoming a critical focus for investors worldwide, sukuk offers a pathway for companies to demonstrate their commitment to responsible and impactful business practices.

What Lies Ahead for Almarai?

Almarai’s recognition at the Asset Triple A Islamic Finance Awards is just one chapter in the company’s ongoing journey of growth and innovation. As the company continues to expand its operations, diversify its product offerings, and invest in sustainability initiatives, it will likely remain a key player in the Middle Eastern market and beyond. With new projects and potential sukuk issuances on the horizon, Almarai’s commitment to Islamic finance will only strengthen its position as an industry leader.

For the broader Islamic finance industry, the future looks promising. As global markets continue to evolve, Islamic finance is positioned to be a driving force in sustainable economic development. Sukuk, in particular, offers a compelling alternative to traditional financing, giving companies and governments the opportunity to raise funds in a way that aligns with social and ethical values.