Almunajem Foods opens talks to buy minority stake in Al Jouf Agricultural Development
Discussions remain non-binding and subject to approvals
SAUDI ARABIA – Saudi Arabia-based Almunajem Foods Company has entered preliminary discussions to acquire a minority stake in local agribusiness Al Jouf Agricultural Development Company, according to a disclosure filed with the stock exchange in January.
In the filing, Almunajem Foods said the talks relate to a potential capital increase at Al Jouf, under which Almunajem would subscribe to newly issued shares priced at US$14 each, though no binding agreement has been reached.
The company stated that the possible transaction fits within its broader corporate strategy, which focuses on expansion across food-related activities and deeper participation in upstream and downstream segments.
Al Jouf Agricultural Development Company operates a diversified farming and food production business, growing crops such as potatoes, onions, wheat, fruit, and vegetables, while also producing olive oil, honey, pickles, and frozen French fries.
Founded in 1988, Al Jouf has developed a vertically integrated agricultural model that combines cultivation with processing and branded food production for the domestic market.
Almunajem Foods said any deal would still require internal approvals from both companies, as well as consent from relevant regulatory authorities, meaning there is no certainty that the talks will lead to a completed investment.
Recent developments and operations
The potential investment comes shortly after Almunajem Foods signed a seven-year processing and distribution agreement with Saudi-based Balady Poultry, further extending its footprint in poultry-related operations.
Almunajem Foods is primarily active in poultry production and processing and markets more than 800 food products through one manufacturing facility and 13 branches across the country.
According to company information, Almunajem operates with a total production capacity of about 58,000 metric tonnes and employs more than 2,100 people.
In December, the company received the first installment of a long-term loan from the Saudi Industrial Development Fund, amounting to US$3.09 million out of an approved facility of US$25.95 million.
The financing is intended to support capital expenditure linked to the expansion of Almunajem’s food manufacturing plant in Jeddah, which is designed to reach an annual output of 35,000 tonnes.
The company said installation of production line equipment is expected to begin during the current quarter, with commercial operations planned for the second quarter of the year.
Financial performance
Almunajem Foods reported revenue of US$217.6 million for the three months ended September 30, reflecting a 2.2 percent increase compared with the same period a year earlier.
Over the same quarter, operating profit declined to US$9.7 million, while net profit fell to US$8.45 million, which the company attributed to pricing pressure despite higher sales volumes.
For the first nine months of the year, revenue edged down to US$669.3 million, while operating profit decreased to US$31.5 million and net profit fell to US$27.4 million.
Sign up HERE to receive our email newsletters with the latest news and insights from Africa and around the world, and follow us on our WhatsApp channel for updates.
