Saudi Food Company Almarai to Boost Egypt, Jordan Subsidiaries With $100 Mln EBRD Loan
Saudi food company Almarai has received a loan of up to $100 million from the European Bank for Reconstruction and Development (EBRD).
The London-based EBRD said in a statement on September 26 the proceeds from the loan will be channelled to Almarai dairy and juice subsidiaries Beyti in Egypt and Teeba in Jordan.
Beyti will receive the lion's share of the proceeds, up to $90 million, to fund its dairy and juice production capacity expansion and grow working capital needs.
Teeba will use up to $10 million to strengthen its capital base and fund its permanent working capital needs.
EBRD said the loan is expected to strengthen backward linkages to local farmers with an increase in the number of partner farms in Egypt that will comply with Beyti's procurement rules, and the transfer of know-how to existing local farmers in Jordan.
It also expects the cash injection to expand Beyti's exports to foreign markets and benefit FDI inflows for both the Egyptian and Jordanian dairy and juice sectors.
Almarai holds a 52 per cent stake in Beyti and Teeba, while the remaining 48 per cent are held by Pepsico.
Almarai's biggest shareholder is Saudi investment holding firm Savola Group, which owns 34.5 per cent of the company.
EBRD-financed projects are expected to be designed and operated in compliance with good international practices relating to sustainable development.
Disbursement of the loan to Teeba is subject to completion of a full environmental and social summary due diligence to be done by EBRD as well as Almarai’s agreement of the multilateral lender’s Environmental and Social Action Plan (ESAP).
Beyti is an existing client of the EBRD and has been “satisfactorily” reporting on environment and social matters, said the bank.
EBRD said Almarai and Beyti operate to international standards, demonstrated by certifications in place, including ISO 9001 for quality management, ISO 22 000 for food safety, ISO 14001 for environmental management and OHSAS 18001 for health and safety management.
“Beyti and Almarai set animal welfare and environmental standards that farms which are supplying milk are required to meet," said EBRD.
"An audit process is used to assess farms before they can supply milk to the company, and all suppliers are regularly audited for quality, environment, social and health and safety aspects,” it added.