Irish Dairy Board invests $27m in Saudi halal cheese production

31-Oct-2013 - Last updated on 31-Oct-2013 at 14:38 GMT

(Picture credit: Iqbal Osman)

The Irish Dairy Board (IDB) has invested €20m ($27m) in a dairy manufacturing and technology facility in Saudi Arabia, “to access the important dairy growth markets in the Middle East and North Africa region, supplying the Islamic Halal market segment”.

IDB announced yesterday that it has acquired a 75% interest in Al Wazeen Trading, based in the Saudi capital of Riyadh, and will develop a cheese manufacturing plant at the site.

The announcement was made by Kevin Lane, CEO, IDB, during a trade mission by 40 Irish food and drink companies to the Middle East. The five-day trip to Saudi Arabia, Qatar, Dubai and Abu Dhabi ended yesterday with an address by Ireland’s Minister for Agriculture, Food and the Marine, Simon Coveney.

At a ceremony in Riyadh to launch the collaboration between IDB and Al Wazeen, Coveney said the development would help Ireland reach its goal of vastly increased Irish dairy production after milk quotas are lifted in 2015, a policy named Food Harvest 2020.

“Developing new routes to market, in particular the emerging markets, is a crucial component of our strategy under Food Harvest 2020 and today’s announcement represents just that,” he said.

“The IDB’s investment in Saudi Arabia opens up considerable market opportunities for the additional milk we are expecting post-2015.”

Milk protein technology

The new plant will produce unbranded, spreadable cheese, sold to wholesale and food service buyers in the Middle East, IDB’s spokesman told DairyReporter.com.

This type of spreadable, Halal cheese, which IDB has never created before in Ireland, was developed by Teagasc Moorepark, the Irish research centre. The technology recombines milk proteins to form fresh cheese, and IDB plans further research into white cheese-making at the site.

Minister Coveney praised the research, saying “I’d to like congratulate the IDB and Teagasc on the success of their collaborative partnership that clearly demonstrates how business and science can work together to achieve commercial success.”

Wealthy and growing market

Saudi Arabia produces far less milk than it consumes, making it the fifth largest dairy importer in the world, at more than 400,000 tonnes of dairy produce per year. Its cheese market is valued at $1.4bn.

“The challenge in making milk in very hot countries is the amount of water that’s needed,” Joe Heron, IDB spokesman, told DairyReporter.com. Ireland’s surplus production made it a good match for Saudi Arabia’s markets, he said.

“The Middle East is a very significant market – it’s one of the fastest growing in terms of population in the world. It’s an area that is becoming more wealthy, with an increasing demand for dairy products.”

Commenting on the announcement Kevin Lane, CEO, IDB, described the investment as “strategically very important as it allows us to expand our business throughout the MENA (Middle East and North Africa) region.

“With innovation and new product development being critical to growth, our partnership with Teagasc is an excellent example of how with innovative technologies we can create new ways of producing and selling dairy products for a global audience.”