Purchasing Strategies

purchasing procedure

Other than the transactions described below, there is no, and there is not currently proposed any transaction or series of similar transactions to which Almarai is or will be a party in which any director, executive officer, holder of five percent or more of any of the Company’s Shares or any member of their immediate family had or will have a direct or indirect material interest.

Based upon a competitive analysis of comparables, the Management has determined that thetransactions set forth below were executed on terms no less favourable to Almarai than it could have obtained from unaffiliated third parties. It is Almarai’s intention to ensure that all future transactions between the Company and its officers, directors and principal

shareholders and their affiliates, are approved by a majority of the Board of Directors, including a majority of the independent and disinterested members of the Board of Directors,

and are on terms no less favourable to the Company than those that it could obtain from unaffiliated third parties. 11.2.1 Feed Supply Agreements and Management Agreement with Al Kabeer

Arable Farms Almarai entered into agreements for the procurement of animal feed from Al Kabeer Arable Farms providing for the purchase of hay, grass and maize. The agreements vary in duration,

of between one to three years, and value, with certain agreements in excess of SAR 25,000,000. In addition, Almarai has entered into a management agreement with Al Kabeer Arable Farms, which provides that Almarai shall manage the operation of Al Kabeer Arable Farm in Hail. The

duration of the management agreement is one year and the management fee payable to Almarai is SAR 864,000. HH Prince Sultan bin Mohammed bin Saud Al Kabeer, Almarai’s principal shareholder, is the owner of Al Kabeer Arable Farms. 11.2.2 Supply and Purchase Agreement with Savola Group Almarai entered into a supply agreement for the provision of its products to Savola Group's retail division. Under this agreement, Almarai sells products to Savola Group's retail division for a period of one year and extends a progressive rebate on the sales of its products depending on the volume of net purchases. Savola Group is a major shareholder in the Company. 11.2.3 Trademark License Agreements with Markley Holdings Limited Almarai entered into trademark license agreements for the use of certain Class 29 “Almarai” trademarks registered under the name of Markley Holdings Limited in Egypt, Yemen and Lebanon, all of which are secondary markets with combined sales volume amounting to less

than 1% of the total sales of Almarai. The agreements generally provide that Almarai shall

CORPORATE STRUCTURE

45 have an exclusive right to use a relevant trademark and that Markley Holdings Limited reserves the right to inspect Almarai's premises and to condition the use of the trademark upon on the Company’s good manufacturing practice in accordance with standards and

specifications approved by Markley Holdings Limited. The agreements provide for a catch-all termination provision in which either party may provide six (6) months prior written notice of termination of the agreement. Almarai will not be authorized to use trademarks in the three

relevant countries following the termination of the trademark license agreement under this class. See “Trademarks, Patents and Other Intellectual Properties” section. Markley Holdings Limited is an offshore company owned by the following Selling Shareholders: HH Prince Sultan bin Mohammed bin Saud Al Kabeer, the Savola Group, Abdulaziz bin Ibrahim Al Muhanna and Abdulrahman bin Abdulaziz Al Muhanna. Ownership of Markley Holdings Limited is currently in the process of being transferred to Almarai.

4-purchasing structure and design:

Interested in pasture access directly to the consumer. To achieve this goal, the organization has  reorganized marketing team and the restructuring of this section to increase our ability to respond to the demands and tastes of consumers. Where they divide their products into seven main categories: fresh dairy products, fresh fruit juices, canned products, sweets, meals light housework, kids products and bakery products. Each of these categories targeting a specific segment of consumers and respond to their requirements.  And remain fresh milk, on top of milk, yogurt, mainstay of the company's business and its success. Where these products continue to occupy the first position in the markets of Saudi Arabia and a market share of up to 59%.  In this context, it was put skim milk pastures which will enhance the ability of our products to reach new categories of consumers, in particular those with tastes and requirements.  Where he achieved good results have reached the market share of 50% of this product has been redesigned product as well as brick and whipped cream which has helped to attract more consumers.

Continued success in the market of juices pastures which started in the previous year, and this year we have introduced a new design and unique packaging juice 200 ml where this creative excellence in forms of packaging in the growth of the sales volume increased by 33% compared to the previous year increased market share overall in the juices.

The packed home light for sensitive seekers taste delicious and perfect food canning and ease of consumption in times of snacks. There is no doubt that cheeses such as cheddar, cheddar-flavored cups cheese and cream, and sliced cheese, and cheddar cheese boxes and templates (provide consumer quality and taste the wonderful addition to their prices.

Almarai products also saw used in cooking, which includes dairy products such as butter, margarine, cheese, feta cheese and whipping cream. Some developments through the redesign of the packaging and the products to enter the markets in the coming year.

The category of children's products that are especially attractive to those between the ages of 4 and 14 years old. And in this age which is the precise stage children begin to differentiate products and choose the product that meets their needs and combines quality and good taste. This category includes products: cheese triangles, long-term milk flavors  (Maher), Zadie, elasadi other products as light healthy meals to children. In 2008 started two major projects represent the first amendment project combination cheese triangles to meet the needs of consumers. The second project was the launch of a new 150 ml milk.

On the other hand continued to grow sales of bakery products that could attract more consumers by launching new products under the trade name luisine. These new products include:

Place cake slices, add to the cake the new Cup cake toffee. The bakery Department under the brand "luisine" of achieving a marked increase in sales volume as well as

To develop new containers have had a significant impact on sales growth.