Mars investing US$60M to build chocolate factory in Saudi Arabia, plans to invest another US$150M over next 10 years

Nevin Barich

SAUDI ARABIA , February 20, 2012 (press release) – Mars Saudi Arabia and King Abdullah Economic City (KAEC) has announced that Mars is breaking ground on its new, state-of-the-art manufacturing facility in King Abdullah City, Saudi Arabia.

The facility will be the second factory Mars has built in the region, with the first based in Dubai. The facility, which will begin operating by 2014 producing GALAXY® and GALAXY JEWELS®, will be one of the largest chocolate factories in the GCC region.

Mars KSA has made an initial investment of US$60 million with an additional US$150 million planned over the next 10 years. The facility will be built to LEED Green Building standards and initially employ 60 Mars associates on the project team.

A further 300-400 associates are anticipated to be brought onboard once the factory is fully operational. Mars will be developing and nurturing Saudi talent through offering training, internships and partnerships with local educational establishments. The project will particularly open up opportunities for Saudi women in fields such as marketing, sales, finance, engineering, as well as research and development.

Fahd Al-Rasheed, Managing Director and CEO of KAEC, said: “Our long-term partnership further proves that King Abdullah Economic City has the ability to attract leading companies from diverse industries from across the globe. We are pleased to have Mars Incorporated establish their presence at KAEC’s Industrial Valley as the world’s leading confectionary.”

He added: “The Industrial Valley enjoys high quality services and facilities that come together to deliver an ideal industrial and operational hub. However, the extraordinary government support of the Custodian of the Two Holy Mosques, King Abdullah Bin Abdulaziz Al-Saud, has not gone unnoticed with the linking of KAEC to the Kingdom’s gas network, the commencement of Al Haramain Railway project in KAEC, linking Makkah and Madina via Jeddah and KAEC.”

Ahmed Linjawy, President of Industry and City Services in KAEC, said: “KAEC has recently seen the completion of leasing the first phase of the Industrial Valley and the launch of the second phase.

“The Industrial Valley has been designed with global planning standards for industrial zones to become a hub for a large number of local and global industrial companies looking to establish projects either through ownership or long-term lease. We treat each client as unique and see to it that we can support requirements of both local and international manufacturers. MARS is one of the largest and most respected names in the confectionery industry. Their presence is another example of why leading international manufacturers would establish their new factories at the Industrial Valley in KAEC.”

Mohamed Safieddine, General Manager at Mars KSA, said at the launch: “The construction of a new chocolate manufacturing site in the region is a key enabler of our roadmap to growth strategy. With our network operating at capacity, we have made the decision that this investment is the best way forward for us to create capacity.

"The new site will increase our capabilities and flexibility, allowing us to compete effectively in a growing market, and to deliver fresh product to our consumers throughout the GCC and beyond. King Abdullah City will offer us the logistical infrastructure, including the largest sea port in the region, to transform our KSA operation into one of our main regional hubs to service neighboring markets.”

The food industry in the GCC region

The global food industry is targeting the GCC market as an opportunity for future growth, as GGC spending on food imports is set to more than double from US$24 billion in 2008 to US$ 49 billion by 2020 according to a report by the Economist Intelligence Unit.

Strong GDP growth and increasing per capita income are expected to drive food consumption in the GCC countries. The region’s GDP is expected to reach US$1.8 trillion in 2015 from USD1.1 trillion in 2010. The per capita income is likely to increase to US$38, 100 from US$26, 700 during this period.

The GCC population is expected to expand from 40.6 million in 2010 to 45.6 million in 2015, contributing to the growth in food consumption. Per capita consumption in the region is low compared to that in developed economies and is expected to increase at a relatively higher rate.

King Abdullah Economic City (KAEC)
KAEC, a New Age City being built today for tomorrow’s generation of Saudi citizens, has six components – sea port, industrial valley, educational zone, central business district with commercial, mixed-use, retail outlets and financial island, resorts and residential area.

The mega-project works closely with the Kingdom’s on-going drive to expand the economy create employment opportunities for its youthful population and function as a catalyst to attract foreign investment, global trade, commerce and industry. Based on initial forecasts, the project and its several components will create up to one million employment opportunities in the various industries and service-oriented companies that will open in KAEC. It will also be home to 2 million residents.

About Mars GCC
Mars GCC, established in Dubai in 1993, is the Mars Incorporated unit responsible for sales and marketing of Mars products across all GCC countries with sales to GCC, Levant Africa, Asia and Europe, stretching as far as the UK and Taiwan. Headquartered in Dubai, Mars GCC is one of the Middle East regions leading chocolate manufacturers producing a complete range of Galaxy® chocolate in a state-of-the-art chocolate molding factory and Mars® & Snickers® in a recently opened filled bar line factory.

Employing more than 300 associates across the GCC the company sells some of the world’s most favorite brands including Galaxy®, Snickers®, M&Ms®, Bounty®, Twix®, Mars® and Maltesers® in chocolate, Pedigree®, Whiskas®, Cesar® & Sheba® in pet care, Uncle Bens®, Dolmio®, & Abu Siouf Rice ® in food and Wrigley Spearmint®, Extra® and Doublemint® in gum products

The Mars KSA Factory

The new factory located in the industrial zone of King Abdullah Economic City (KAEC) will be the second factory for Mars in the GCC region, with the first based in Dubai. Factory production is scheduled to commence in 2014.

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