PepsiCo ups investments in Dammam potato plant to SAR 300M: CEO 

Ahmed El Sheikh, President & General Manager (MENA and Pakistan Foods) PepsiCo

PepsiCo has increased investment in its potato production plant in Dammam to around SAR 300 million, up from SAR 225 million that was previously announced, to keep pace with the growth in the Saudi market, said Ahmed Al-Sheikh, CEO and General Manager of the Food Segment for the Middle East, North Africa and Pakistan.

The company has invested $2.4 billion since 2017 in the agricultural and food industries sectors in Saudi Arabia. It also expanded to 86 operational sites, and created more than 9,000 jobs within the Kingdom, which reflects its sustainable efforts to promote the Kingdom's economic, industrial, and social development, he added in an interview with Argaam.

Saudi Arabia currently imports 80% of its food products, said the top executive, indicating that Saudi Vision 2030 prioritizes boosting local production, as agriculture has contributed SAR 109 billion to the Kingdom's economy in 2023, its highest level to date.

The company's investments in the Kingdom include several axes، namely agriculture, manufacturing and commercial distribution. 100% of the potatoes used in the products are of local origin, without relying on any import from abroad, said Al-Sheikh.

PepsiCo supports Saudi farmers in sustainable agriculture and invests in manufacturing, logistics and supply chain infrastructure to boost local food production, he added.

Additionally, the company's expansions also included production capacities at its Doritos potato and corn plants, which not only feed the local market, but also extend to the Gulf and Levant countries, he further stated.

Al-Sheikh also pointed out that PepsiCo recently invested an additional SAR 30 million in a research and development center at its new headquarters in Riyadh, with the aim of developing innovative products locally, most notably snacks based on Saudi dates, to offer more products in line with local demand.

He emphasized that the Saudi market is one of PepsiCo's key markets globally, noting that the local consumption rate is still one of the lowest in the region, which represents a great opportunity for future growth.

"Saudi Arabia is the largest economy in the Middle East and one of the fastest growing economies. The investment environment here is promising and the Saudi market is still abundant with great opportunities for growth", said the CEO.

He added that this was a key reason for choosing Riyadh, specifically the King Abdullah Financial District (KAFD), as the company's new regional headquarters, as PepsiCo was the first multinational company to set up a regional office in Riyadh as part of Saudi efforts to become a regional hub for global companies.

As for the company's expansion plans, Al-Sheikh indicated that PepsiCo is studying new markets in the region, in addition to developing product portfolios locally, to include multiple segments of consumers within a strategy based on market value.

He pointed out that the company commenced its operations in Saudi Arabia more than 30 years ago in partnership with Saudi investors with Bogshan Group, AlGosaibi Co., and Mahmoud Saeed. The local Tasali brand is one of the key Saudi brands that contributed to building the relationship with the local consumer. 

Al-Sheikh also said that the company is cautiously optimistic about the future, as investment implies growth, noting that Vision 2030 and the growth of the Saudi economy provide market opportunities for the company and its competitors.

According to Argaam's data, The National Industrial Development Center (NIDC) announced in January 2024 PepsiCo’s investment in a SAR 225 million industrial potato production project, which aims to enhance investments in the Kingdom, double the food industry sector's growth, and achieve integration between agricultural and industrial sectors.