With annual rainfall averaging 59mm, the kingdom should not be a natural source of milk, but its mega-dairy, Almarai, changed conventional wisdom when it was established in 1977, and has since become one of the Middle East’s biggest diversified food producers.
Assisted by Irish agribusiness pioneers Alastair and Paddy McGlucklin, the company was set up as a means to achieve Saudi self-sufficiency, and started with just 300 head of cattle. Today, it has a total herd of 135,000 cattle and produces 2.5 million litres of milk a day, with an average of 40 litres per cow each day being roughly double the European mean.
Overcoming the climate
Almarai has become known as a significant developer of dairy technology for desert conditions, and has developed an automated system that keeps its Holstein milking cows at a temperature of between 21C and 23C.
Overhead misters in the milking sheds send out clouds of moisture that wet the flanks of the herd to keep them cool. Fans also keep them dry and prevent puddles from forming.
Workers also put the cows through stationary water jets before milking to prevent the milk from becoming contaminated with manure. The factory then goes through the process of pasteurising its dairy products before bottling and packaging them, and then a fleet of 1,000 refrigerated tankers deliver the milk to 55,000 stores across six Gulf countries.
Fonterra’s interest
Almarai is not the only dairy major to tap into the desert’s promise. Fonterra’s Saudi New Zealand Milk Products (SNZMP), although not a local producers, has also been doing roaring business since the initial joint venture between Fonterra and Saudi Dairy and Foodstuff Company became wholly owned by Fonterra in December 2009.
The site has five processing lines, packing Anchor and Anlene milk powders, producing processed cheese and recombined feta-style white cheese, and cutting natural cheddar cheeses. According to Amr Farghal, managing director of Fonterra MEA and CIS, the wider Middle East region is strategically important for Fonterra.
“We have great confidence in the stability and the positive outlook of the GCC economies. The Middle East… is one of our key focuses for expansion,” he said.
“Saudi Arabia is the cornerstone of our business in the GCC, and will continue grow with more investment, the introduction of value added products and strengthening Fonterra’s presence on the ground.”
The New Zealand government is currently in the process of ratifying a free trade agreement with the Gulf Co-operative Council (GCC) that it expects will see the country’s gross domestic product grow by up to 1.5%.
With two-way trade between New Zealand and the GCC standing last year at around US$3.2 billion, the GCC is New Zealand’s seventh largest trading partner. Its exports to the Gulf last year reached US$1.2 billion.