Irish Dairy Board to invest $27m in Saudi expansion

New cheese manufacturing facility planned as part of strategy to target halal food market

(Photo for illustrative purposes only)

(Photo for illustrative purposes only)

The Irish Dairy Board Cooperative Limited (IDB) has announced plans to invest €20m ($27.3m) in new facilities in Saudi Arabia.

The investment includes the acquisition of a 75 percent interest in Al Wazeen Trading and the development of a new cheese manufacturing plant at the Al Wazeen facility in Riyadh.

The IDB said in a statement that the investment "will further strengthen its position in the Saudi Arabian market, the fifth largest dairy importer in the world, as well as providing a central hub to access the important dairy growth markets in the MENA region".

The announcement was made by Kevin Lane, CEO, IDB during an Irish Trade Mission to Saudi Arabia, led by the Minister for Agriculture, Food and the Marine, Simon Coveney.

Coveney said: “The IDB’s investment in Saudi Arabia opens up considerable market opportunities for the additional milk we are expecting post 2015.”

The new facility will use dairy ingredients to produce a range of fresh white cheeses that appeal to local market tastes.

The cheeses will be made using a pioneering technology developed by the IDB and Teagasc. The technology allows innovative milk protein ingredients to be recombined for fresh white cheese production. Fresh white cheese is hugely popular in the Middle East.

The facility will also include an Innovation Hub for the continued research and development of ‘white cheese’ technologies.

The facility will initially supply dairy products to the Saudi Arabian market. It is anticipated that IDB will use Saudi Arabia as a manufacturing hub for the MENA region, supplying the Islamic Halal market segment.

Saudi Arabia already imports more than 400,000 tonnes of dairy produce per year. Domestic milk self sufficiency is relatively low and milk production is under stress due to the lack of water for crop growing as animal feed.

Despite this, consumption of cheese and other dairy products is growing steadily throughout the region, offering an excellent platform for future growth for IDB.

Kevin Lane, CEO, IDB said: “Today’s announcement represents a major route to market and value for Irish dairy in the post quota environment. This investment is strategically very important as it allows us to expand our business throughout the MENA region.”

In 2012, Irish food and drink exports to the Middle East were valued at €275 million, with the Gulf States accounting for 70 percent or €192 million.

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