SADAFCO SWOT & PESTLE Analysis
COMPANY PROFILE -SADAFCO
Business Sector :FMCG
Operating Geography :Saudi Arabia, Middle East, Global
About SADAFCO :
Saudia Dairy and Foodstuff Co, also known as SADAFCO, is the leading food manufacturer, seller and distributor based in Saudi Arabia, operating across the Middle East. The company specializes in UHT milk, Tomato Paste, Ice Cream, Snacks and Drinks, marketing its products under its flagship brand “Saudia”, a name associated with “Saudia Dairy and Foodstuff Company”. The brand names under the company’s portfolio are Saudia, Crispy and Baboo. SADAFCO is headquartered in Jeddah, Saudi Arabia and it primarily operates within the Food, Beverage and Tobacco sector, focusing on Packaged Foods and Meats. The company ended the financial year of 2019 with 2,662 employees. Founded in 1976, SADAFCO initially operated as a joint venture between Saudi, GCC, and international businessmen. Consequently, SADAFCO was merged with two other dairy companies and ownership was concurrently transferred to Saudi and CC interests. In 2005, SADAFCO was listed as a public company in Saudi Arabia and on the Saudi Arabian stock exchange TADAWU. Recently, Saudia Dairy and Foodstuff Company has launched operations in 2020 utilizing a photovoltaic (PV) - diesel hybrid system that can supply up to 40 percent of the facility’s daytime energy requirements. SADAFCO received the Team of the Year Award at the 6th Annual Saudi Trade Finance Summit 2019.SADAFCO’s unique selling proposition or USP lies in being a leader in the UHT (Long Life) milk market in Saudi Arabia. SADAFCO’s mission statement reads, “To develop, procure and market a range of nutritious food propositions for consumers of all age groups and create maximum shareholder value through team work.”
SADAFCO Revenue :
SAR 2,056 million - FY ending 31st March 2020 (y-o-y growth 11.81%)
SAR 1,813 million - FY ending 31st March 2019
Competitive Analysis of SADAFCO
| Strengths | Weaknesses |
| 1. Strong market presence in challenging milk market 2. Broad range of quality products offered 3. Consistent financial performance over the years 4. Strong market share metrics enjoyed by Saudia brand 5. Food Safety Management system (FSMS) with ISO 22000:2005 standard 6. Strategic investments and expansion aiding growth | 1. Lesser expenditure on innovative products compared to the competitors |
| Opportunities | Threats |
| 1. Consistently increasing CAGR of dairy industry in Saudi Arabia 2. Expanding SADAFCO to the online market to diversify revenue 3. Diversifying cold beverages and frozen products according to the hot climate of KSA | 1. Irrational discounts by competitors leading a decline in revenue 2. Low oil prices to impact Saudi GDP and company’s business 3. Increasing competition in the domestic market |
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Detailed SWOT Analysis of SADAFCO
Strength
1. Strong market share metrics enjoyed by SADAFCO and Saudia brand: SADAFCO has strong market share in its key business segments in Saudi Arabia. The company’s Saudia brand health metrics have also shown a positive trend as represented by the exit MAT (moving annual total) market share measures. The brand’s milk percentage saw an increase of 0.1% to 27.9%, tomato paste an increase of 5.8% to 53.9% and ice cream an increase of 0.2% to 25.2% which took the ice cream business to a #1 position. This is mainly due to investments made to maintain the premium position of the Saudia brand while making sure that customers continue to access high quality products at affordable prices. The company has also significantly increased its sales reach through the installation of thousand new freezers in both existing and new outlets. The total market share enjoyed by Sadafco for UHT milk is 62.3%, that for tomato paste is 54.6% and for ice cream 24.9%.
6. Strategic investments and expansion aiding growth: SADAFCO has plans underway to set up a new ice cream production facility for the completion of which it has purchased a facility adjacent to the Jeddah milk factory in 2019. The new facility is expected to cost SAR 105Mn and promote growth for the company. The new facility is to promote the company strategy of strengthening the three prime avenues of growth for the company- namely milk, tomato paste and ice cream. The company had previously in 2018 also purchased 76% of Mlekoma (Poland) to gain access to powdered milk raw materials. This has resulted in savings amounting to over SAR 10mn in 2019. The Jeddah Central Warehouse (JCW) investment to the tune of SAR 145Mn made in April 2019 has also already shown higher utilization than expected, taking savings far above the projected savings for the first year
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Weakness
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Opportunity
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Threat
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Major Brands :
- Saudia Ice Cream
- Saudia Baboo
- Saudia Butter
- Saudia French Fries
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TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
References used in SADAFCO Analysis Report
1. Agricultural Achievements in Saudi Arabia –
https://www.saudiembassy.net/agriculture-water
2. Global Dairy Packaging Market Information –
https://www.marketresearchfuture.com/reports/dairy-packaging-market-2033
3. SADAFCO supports Jordan, Bahrain and Kuwait to encounter COVID-19 –
https://saudigazette.com.sa/article/594551/BUSINESS/SADAFCO-supports-Jordan-Bahrain-and-Kuwait-to-encounter-COVID-19
4. SADAFCO Investor presentation –
https://www.sadafco.com/sites/default/files/reports/sadafco_investor_presentation_draft_7_nov_2019.pdf
The detailed complete set of references are available on request in the 'Complete report' on purchase.
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SADAFCO SWOT and PESTLE analysis has been conducted by Senior Analysts from BC
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