Mead Johnson believes the potential of the infant nutrition market in the Gulf and the local know-how of business partner Almarai will be key to its new venture in the region turning a profit in two years.
The US group today (30 March) announced its plans to build an infant nutrition business in the Gulf alongside Saudi dairy giant Almarai.
Go deeper with GlobalData
The two companies, who will both take a 50% stake in the venture, see the business being profitable by 2012.
It can be sometimes years before ventures in emerging markets book a profit but a spokesman for Mead Johnson said the venture had the ingredients to meet its target.
“It’s the size of the market, its growth rate and a very strong local partner in terms of their local knowledge of the market, their dairy supply, distribution and their recognition within the market,” the Mead Johnson spokesman told just-food.
Almarai is building a manufacturing facility for pediatric nutrition products just outside Riyadh, the Saudi capital. The site is scheduled to be commissioned during 2011 and will be leased by the venture.
The Mead Johnson spokesman said the first products from the venture would be launched next year and would come from the “full range” of the group’s portfolio, including infant formula, products to combat allergies and “growing-up” milk.
