Almarai's Dollar-Denominated Trust Certificates: A Strategic Financing Move in a Diversified FMCG Giant

In the ever-evolving landscape of global food and beverage manufacturing, Almarai Co. stands as a titan. As the world's largest vertically integrated dairy company and a leading fast-moving consumer goods (FMCG) player in the Middle East and North Africa (MENA) region, Almarai's recent foray into dollar-denominated trust certificates underscores its strategic ambition to optimize capital structure and secure access to global liquidity. While specific terms of the issuance remain undisclosed, the company's broader financial and operational trajectory provides critical context for understanding this move.

Strategic Rationale: Capital Structure Optimization

Almarai's decision to issue dollar-denominated trust certificates aligns with its long-term goal of balancing debt and equity to sustain growth. According to its 2024 Annual Report, the company's paid-up share capital stands at $10 billion, comprising one billion fully paid and issued shares of $10.00 each At a glance | Almarai Annual Report 2024^[1]. This robust equity base positions Almarai to leverage debt instruments like trust certificates to avoid over-reliance on equity dilution while maintaining flexibility in funding expansion.

The poultry sector, in particular, is a focal point of Almarai's growth strategy. The company aims to nearly double its poultry supply through significant investments, a plan that requires substantial capital outlays About Almarai® | Quality you can trust | Almarai® Sustainability^[2]. By accessing dollar-denominated financing, Almarai can hedge against currency volatility in the MENA region, where inflationary pressures and exchange rate fluctuations are persistent risks. This approach mirrors global FMCG giants like Nestlé and Danone, which use multi-currency debt to stabilize costs in volatile markets.

Global Liquidity Access: A Prerequisite for Expansion

Almarai's trust certificate issuance also reflects its intent to tap into international capital markets. The company's operations span seven countries, with a logistics network of over 10,000 vehicles distributing 2 billion kg of products annually Browse Bakery, Dairy, Juice & Poultry Products | Almarai^[3]. Such scale demands liquidity to fund working capital, R&D, and infrastructure upgrades. Dollar-denominated instruments offer access to a broader investor base, including U.S. and European institutional investors, thereby diversifying Almarai's funding sources.

This strategy is further reinforced by Almarai's sustainability commitments. The company adheres to ISO 22000:2018 and ISO 14001:2015 standards, emphasizing environmental and operational efficiency At a glance | Almarai Annual Report 2024^[4]. By securing long-term, low-cost financing through global markets, Almarai can channel resources into green initiatives—such as its arable farms in the U.S., Argentina, and Romania—without compromising profitability.

Risks and Considerations

While the benefits of dollar-denominated debt are clear, Almarai must navigate potential challenges. Currency mismatch risks could emerge if the company's dollar liabilities outpace its local-currency revenues. However, its diversified revenue streams—spanning dairy, bakery, juice, and poultry—mitigate this risk. Additionally, Almarai's strong credit profile, supported by its 45-year track record of sustainable growth, likely secures favorable interest rates, reducing the cost of capital.

Conclusion: A Blueprint for Resilient Growth

Almarai's issuance of dollar-denominated trust certificates is not merely a financing exercise but a calculated step toward reinforcing its market leadership. By optimizing its capital structure and securing global liquidity, the company is poised to navigate macroeconomic uncertainties while accelerating its expansion in poultry and other high-growth segments. For investors, this move signals confidence in Almarai's ability to balance innovation, sustainability, and profitability—a rare trifecta in today's FMCG sector.