Erbil, Kurdistan Region of Iraq, April
20, 2015—IFC, a member of the World Bank Group, is investing up to
$18 million in Saudi dairy company Al Safi Danone’s Iraq-based subsidiary
to expand its operations in order to improve domestic food security, boost
Iraq’s non-oil sector, and reduce its reliance on imported dairy products.
IFC’s long-term investment, which is structured as an Islamic Finance
transaction, will help Al Safi Danone Iraq, a pioneer in the Iraqi food
production industry, increase production of high-quality dairy products
to meet rising demand, improve food distribution standards, and create
more than 250 new jobs in the next two years.
The company’s new greenfield dairy processing facility in the Kurdistan
Region has a target production capacity of around 59,000 tons per year,
focusing initially on a range of spoonable and drinkable yogurt products,
as well as cheese and UHT milk.
“This investment will help us establish a modern dairy enterprise with
the latest processing and packaging equipment and train our employees to
international standards,” said George Abi Najem, General Manager GCC,
Iraq and Levant, of Al Safi Danone. “Thanks to this technology, the local
market will enjoy higher quality dairy products at affordable prices. Al
Safi Danone’s new factory in northern Iraq is just the first sign of the
group’s commitment to Iraq, one of the most important markets in the region,
despite its challenges.”
IFC’s investment is part of a broader World Bank Group strategy to encourage
South-South investments, while supporting the diversification of Iraq’s
economy and improved agricultural production to boost growth. Food production
and distribution will play a key role in transitioning Iraq from an oil-based
economy to a more diversified one.
“Our developmental role in Iraq is more important than ever, especially
in providing funding to competitive companies in the non-oil sector and
facilitating investments from other countries within the region into Iraq,”
said Mouayed Makhlouf, IFC Director for the Middle East and North Africa.
“We hope our commitment to this project will encourage other international
and domestic investors to invest in Iraq.”
Over the next few years, IFC is planning to step up its investment and
advisory services in Iraq, investing $100-130 million per year, depending
on the security situation, in priority sectors such as infrastructure and
IFC, a member of the World Bank Group, is the largest global development
institution focused exclusively on the private sector. Working with private
enterprises in about 100 countries, we use our capital, expertise, and
influence to help eliminate extreme poverty and boost shared prosperity.
In FY14, we provided more than $22 billion in financing to improve lives
in developing countries and tackle the most urgent challenges of development.
For more information, visit www.ifc.org.
About Al Safi Danone Iraq
Al Safi Danone Iraq is a joint venture of the Saudi dairy company Al Safi
Danone, Saudi conglomerate Al Faisaliah Group, French-based multinational
Danone Group, and Iraq based retailing, sales, and distribution company
Al Yasra. Its mission is to provide healthy products to support the well-being
of Iraqi families based on a balanced diet that includes dairy products.
Al Safi Danone Iraq is working to serve the Iraqi market with a range of
products of the highest international quality standards, such as Activia.