Almarai buys drinking water maker for $277m

Saudi dairy and juice producer Almarai has ventured into the bottled drinking water segment with the acquisition of a local company.

The company purchased Pure Beverages Industry Company, the owner of the Ival and Oska bottled water brands, for just over SAR1 billion ($277 million), according to a statement published on the Saudi Exchange (Tadawul) on Sunday.

The acquisition, which supports Almarai’s expansion of its beverage portfolio, will be financed through internal cash flows. The deal, however, is subject to regulatory approvals.

In April, the Riyadh-based dairy company reported a 6 percent increase in net profits to SAR731 million and a 6 percent increase in revenues to SAR5.8 billion.

In an earnings call, Almarai said that operating costs have been higher due to the launch of new products and expansion into different food categories, such as ice cream.

• Almarai to increase poultry output by 35%
• Saudis getting a taste for non-alcoholic drinks
• ‘World first’ date soft drink launched by PIF subsidiary

“Generally, it’s a very high capex company anyway just because of the nature of the business,” Shahrukh Saleem, a portfolio analyst at Mashreq Capital, said.

The company announced in March 2024 that it would spend more than SAR18 billion under its new five-year strategic plan to achieve food security, which is part of the kingdom’s Vision 2030 goal.

As part of the plan, SAR7 billion will be allocated to poultry expansion; SAR5 billion to support existing core product categories such as dairy, juice and bakery; SAR4 billion to develop supply chain and sales capabilities for local and regional expansion; and SAR1 billion to move into new food segments.