SADAFCO maintains market position despite fierce competition: CEO

Patrick Stillhart, CEO of Saudi Dairy and Foodstuff Co. (SADAFCO)

Patrick Stillhart, CEO of Saudia Dairy and Foodstuff Company (SADAFCO), said the company has maintained its strong market position in key categories despite fierce competition. He noted that the company holds a 59% market share in long-life milk, 53.7% in tomato paste, and 31% in ice cream.

Speaking to Argaam, Stillhart expressed optimism about the second-quarter performance, supported by a range of positive indicators and initiatives. These include the end of the seasonal impact of Ramadan, a return to normal consumption patterns, higher seasonal demand for ice cream, and the cumulative effect of marketing and production initiatives launched in Q1.

He added that the company will continue to focus on operational efficiency and cost reduction while pursuing sustainability projects aimed at improving environmental and financial performance over the long term. These include expanding the use of solar energy and water-saving technologies.

Stillhart said export sales recorded notable growth in Q1 2025, driven by rising demand in key markets such as the Gulf countries, Iraq, and North Africa. He attributed the strong performance to the company’s successful strategy of enhancing distribution efficiency through 24 hubs across Saudi Arabia and the Gulf, supported by a flexible, integrated logistics network covering land and sea routes, and product customization to suit consumer preferences in target markets.

He stressed that these results reflect SADAFCO’s strategy of innovation and product development tailored to local tastes, in addition to ongoing investments in operational efficiency and supply chain improvements. He noted that the company’s alignment with Saudi Arabia’s Vision 2030 strengthens its competitiveness amid market challenges.

Revenue rose 8.4% year-on-year (YoY) in Q1 2025, while gross profit reached 35.9% of net sales, marking a SAR 38 million increase, with costs remaining under control, Stillhart said.

He noted that selling and distribution costs increased due to strategic and discretionary spending on advertising and promotional activities (A&P), aimed at reinforcing and capturing market share in both core and new product categories.

Stillhart explained that the overlap of Ramadan with the start of spring in March 2025 had a direct impact on ice cream sales, due to shifts in consumption habits during the holy month.

To address the decline, SADAFCO introduced several innovative measures, including the launch of four new products in the ice cream and snacks segments, the commissioning of a new sandwich ice cream production line, and the rollout of new locally inspired flavors as part of its product diversification strategy. These efforts are expected to support a sales rebound in Q2 2025.

On the performance of Mlekoma, a SADAFCO subsidiary, Stillhart said the company posted an exceptional Q1 performance in 2025, with sales surging 60% YoY. He credited the growth to Mlekoma’s expansion strategy focused on diversifying income streams and increasing market presence. He added that Mlekoma benefits from SADAFCO’s fully integrated supply chain, including its wholly owned plant in Poland, which ensures product quality and supply continuity.

According to Argaam data, SADAFCO’s net profit slipped slightly to SAR 126.1 million in Q1 2025, compared to SAR 126.3 million in the same period of 2024.