Supply Chain Almarai Company

concept of supply chain:

Almarai is a vertically integrated enterprise, covering such diverse activities as marketing creativity, sales and distribution, food processing, and dairy farming. Daily availability of high quality, fresh, short shelf-life dairy products across a vast area in an environment of high ambient temperatures is critically dependent on high quality inputs, the

highest standards of excellence throughout all processes and an effective chilled distribution network. Almarai ensures this through direct control of all aspects of its integrated food supply chain Almarai has been able to position itself as a low cost producer of fresh dairy and related food

and beverage products through the efficiency and effectiveness of its integrated activities, by the investment in advanced and modern facilities and infrastructure and by the benefits of economies of scale. These capabilities combined with the breadth of its distribution coverage, has given Almarai a particularly strong position among large food retailers. These customers are gaining an everincreasing share of the retail market and Almarai is well positioned to service this growth. Almarai’s quality milk pool, broad product range and extensive and effective chilled distribution network place the Company in a position that would be difficult for a retailer brand to replicate or improve upon.

Almarai’s management believe the Company has established a reputation as one of the foremost milk producers in the world despite operating in an arid environment with extremely high ambient temperatures. Almarai‘s herd productivity is exceptional, well ahead of local rivals and comparable to the highest yields being achieved by commercial dairy herds anywhere in the world. Almarai currently estimates that its average cow yields 12,400 litres

annually. Almarai’s dairy farms are relatively capital intensive and include numerous features to ensure cow comfort and safety and to minimise stress, which can depress yields. These features, combined with dairy management expertise, allow Almarai farms to produce a relatively even

supply of milk throughout the year, thus matching raw milk production to market demand. By directly controlling its own milk supply, Almarai can ensure the quality of milk used in producing its products. This contrasts with dairy processors in other countries who must mix raw milk of variable quality sourced from a large number of independent farmers.