Almarai Co., the Gulf's largest diary company by market value, said on Sunday it will begin production on a 650 million riyal ($173.3 million) infant formula plant as well as a baked goods factory before the end of next year.
The baked goods facility is slated to cost 200 million riyals, the firm said in a statement.
Most of the contracts for the civil and electric operations, as well as the production lines for the baked goods factory are signed and it is expected to start production in the first quarter of 2010, Almarai said.
The formula factory, which is expected to generate revenues of between $50 million and $70 million, will begin production toward the end of the last quarter of 2010, according to the statement on the Saudi bourse website.
Almarai, which has been diversifying its revenue through acquisitions, plans to spend 6 billion riyals on expansion in the five years to 2013.
It recently acquired two companies in the Middle East and is looking at more acquisitions in Egypt after last month's $115 million purchase of an Egyptian dairy firm .
Earlier this month, Almarai reported a 22.1-percent rise in second-quarter net profits on accelerated sales growth. Profit in the three months to June 30 stood at 287.1 million riyals.
Almarai stock was up 1 percent at 1156 GMT on Sunday on the Saudi bourse .
(Reporting by Asma Alsharif; Editing by Amran Abocar, Riyadh newsroom, +966 1 463 2603,email@example.com)
($1=3.750 Saudi Arabian Riyal)