EXPORT OPPORTUNITY PROFILE (EOP)
Ice Cream (Up-Date)
Export Consultancy Unit (ECU)
Marketing Consulting Division
Rabi’II, 1428H
(April, 2007G)
1 PURPOSE
The purpose of this export opportunity is to investigate the potential for exporting Ice
Cream from the KSA to international markets. It should be noted that this brief report
is intended to help local manufacturers identify export opportunities in general.
Interested investors should conduct more detailed studies to evaluate their opportunities,
prior to entering their selected export markets.
2 PRODUCTS
ICE CREAM is a frozen food made from a mixture of dairy products, such as milk, cream
and non-fat milk, combined with sugars, flavourings, fruits, nuts, etc. Ice cream containing
at least 1.4% egg yolks is called French ice cream or frozen custard. Ice cream and French
ice cream contain a minimum of 10% milk fat and weigh not less than 4.5 pounds per gallon.
Light ice cream is reduced in fat by at least 50% in comparison with an appropriate
reference food Ice cream contains air (the more air, the lighter it will be). Functional
ingredients, such as stabilizers and emulsifiers, are often added to the product to
promote proper texture and enhance the eating experience.
Basically, there are three primary market segments of the ice cream market and their
respective sub- segments are:
Hand held products: the largest category which comprise of:o
o
o
o
o
o
Water based lollies
Cups
Cones
Ice cream sticks
Bars and sandwiches
Others – e.g. novelties
These varieties are sold primarily through small groceries and baqallas from freezer units,
supplied by processors & importers. Additionally, these items are sold through mobile
vans, which also sell soft ice cream, and milk shakes.

Take-home Hard Ice Cream: principally 1/2, 1, and 2 litters varieties sold in
supermarkets

Parlour Hard Ice Cream: retailed through ice cream parlours and secondarily via
smaller mobile stalls in city center.
Additionally, as would be expected from a seasonality point of view, ice cream consumption
peaks during the summer periods and it reaches its lowest during the cold season in
winter. Ice cream consumption peaks in summer periods of June – September.
3 LOCAL MANUFACTURERS
The latest details of Industrial Licenses from Ministry of Commerce & Industry data are
as follows:



Number of licences issued to date
Number of cancelled licenses
Number of active licenses
Total active licensed capacities
:
:
:
:
117
58
59
192.7 MM litters
According to the previous source, there are 13 local producers with an estimated
combined installed capacity on a single-shift basis (8 hours) of 178 million liters. It is to
be noted that few factories are working on a three shift bases. The table below provides
estimates of local sales and exports for the year 2005.
Total
Number of active Installed Capacity Local Sales
Export Sales
local producers
(million litters) (million litters) (million litters)
13
178
26
0.282
Est. Available
Capacity – (million
litters)
Avail Cap - % of
Installed Capacity
151.72
85%
As shown in the above table, it can be clearly seen that there is around 85% of local
installed capacity available for export. The KSA producers’ range Ice Cream should utilize
the idle capacity for export to countries where demand exists for these products.
4 HARMONISED CODES
The customs/tariff codes used for ice cream is indicated by the following range of 6-digit
HS (Harmonised System) Codes:HS CODE
210500
DESCRIPTION
Ice cream and other edible ice, whether or not containing
cocoa
The above 6-digit HS Codes are internationally recognised codes that cover the range of
Ice-Cream produced anywhere in the world including the KSA. All countries are allowed to
add extra digits (eight digits and/or ten digits) to the Code to narrow product categories
down and for their own statistical purposes.
5 EXPORT PERFORMANCE
The Ice Cream market in the Kingdom is considered to be in a maturity stage where
growth is minimal. The major suppliers of Ice cream in Saudi Arabia feel there is still
considerable scope for further expansion of the market despite the low growth rate of
this market. Compared with Western markets per capita consumption of ice cream at less
than 3 litters per annum is still small indeed (USA 23 litters per capita). Overall, the
domestic installed capacities for ice cream processing represent a significant over supply
situation versus a no growth, relatively small and underdeveloped market demand trend.
Unfortunately, the Kingdom’s export of ice cream is very minimal and can be neglected.
The total export of Ice-Creams is around 282 thousand litter in 2005 and the growth rate
of exports is dropped by around 21% compare to 2004. KSA Ice-Cream manufacturers
exported around 0.16% of their total installed capacities (single-shift basis). Due to the
high distribution costs for refrigerated products, strength of suppliers, especially in
U.A.E. and Kuwait, and lack of product differentiation, represent strong barriers to entry.
However, it is envisaged that current marketing activities should be developed to be in the
level of other big players in Ice cream sector. An advantage for the KSA manufacturers is
that their export markets are already fully familiar with the product ranges available in
the market, hence, this makes accessing new export customers easier. Manufacturers,
therefore, now need to focus on promoting their products, which should assist in securing
further market penetration in their selected export markets. The table below illustrates
exports trend and its percentage from the total installed capacity.
Total
Annual export sales 2003 (M
litters)
Annual export sales 2004 (M
litters)
Export % of Installed capacity
Export
205
Export Growth Rate %
0.12%
% of Installed capacity
357
-
0.20%
74%
Annual export sales 2005 (M
litters)
% of Installed
Export
capacity
282
0.16%
-21%
As can be seen, there was a sharp increase in the export sales in 2004 by around 74%,
whereas in 2005 the exports witnessed a decrease by around 21%. In general, the
exported volume during the last three years is quit low and represents neglected
percentage of the total installed capacity i.e. less than 1%.
6 EXPORT BARRIERS
There are a number of export/trade barriers and opportunities that are identified
below: Company Specific Barriers & Opportunities




Lack of availability of commercial information or not having undertaken market
research can be considered to be a barrier to entry, as specific country profiles
that could highlight opportunities would not come to light.
The internal corporate export structure and manpower resources could be a barrier
or an advantage for companies. In this instance, some KSA companies are
developing their export capabilities but perhaps need to put more emphasis on this
development.
Investment in manpower development for export and good MIS (management
information systems) could pay dividends in the future.
Many overseas companies will only purchase from those companies that have
secured ISO 9000 certification and in some instances not having this certification
could be a barrier.
 Market Specific Barriers & Opportunities




Specifically for the food sector, the following points should be considered:o Slow movement of goods could become a barrier due to ‘useby/expiry date’ limitations, which could affect the shelf-life
of the product concerned.
o Maintaining food products at the appropriate temperature
during its shelf-life (before, during and after transportation).
o Matching the temperature needs of the product with the
correct type of transportation vehicle to be used for delivery
– e.g. frozen food shipped in refrigerated trucks.
o Time delays due to any reason could affect the products in
terms of: Shelf-life (shelf-life of cheese reduced due to
transportation in incorrect vehicle type).
 ‘Use-by date’ expires prior to it being put on a
shelf for sale and purchased.
Temperature requirements are not met correctly – during transportation,
storage and shelf presentation. As inappropriate transportation/storage
could lead to damage, etc.
Desk research should initially be carried out to determine the market
viability for entry – this can be undertaken through written data relating to
the target country and also via the internet.
Having a good and reputable local agents/distributors can be a benefit as:o The exchange of information between the two parties
minimises the information barriers and allows the exporter to
have a better understanding of his target export markets.





o Enables the exporter to have a physical representative in the
target market, someone who is responsible for local
distribution and sales.
Conversely for the exporter, not knowing what is happening in the selected target
export markets becomes a barrier.
Selecting an inactive and/or poor agent/distributor could bar the exporter from
marketing their good properly and professionally in the target market and, thus,
this could be a barrier.
In terms of the KSA’s overseas competition - companies outside the GCC wishing to
export to the GCC, the unification of the GCC tariffs will be a barrier for imports
from them; however, it will be a positive aspect for the KSA producers exporting to
neighbouring GCC and Arab countries.
Customs duties/tariffs can be a barrier for exporters - importing countries in many
instances use this mechanism as a means of protecting their local industry.
Trade agreements between two countries can sometimes either reduce
duties/tariffs or exempt them. This means that in some instances a number of
countries may have a preferential tariff advantage over other countries.
7 MAJOR INTERNATIONAL MARKETS
The European Union and the USA are the major international markets importing IceCream. The growing international markets provide an opportunity for foreign competitors,
including the KSA, to compete in their respective markets, subject to the imported
products being able to meet the quality and price criteria for these individual markets.
It is to be noted here that the total import value of the products sector being analysed in
the following tables of this section may be slightly different from the total import value
of its sector being highlighted in the previous section. The UN Statistics Division justified
the matter on the basis that it is possible that aggregated data does not match up exactly
with detailed data. This occurs sometimes due to (a) the rounding up/down of figures by
reporting countries and (b) the aggregation of data using certain processing rules by
COMTRADE.
The table below shows the 15 major world importing countries for Ice-Cream during 2005
using the combined imports of HS Code: 210500. It can be seen that the 15 named
importing countries purchased in excess of US $ 1.49 billion worth of Ice-Cream, with the
top five countries accounting for around 42% of the total imports.
2005 - Major International Importing Countries for Ice-Cream
Top Importers
Value US $
Quantity - Litter
%Share
Price (US$/Litter)
United Kingdom
234,597,035
83,002,135
10.57%
2.83
France
211,557,381
78,151,020
9.95%
2.71
Germany
185,968,000
64,826,700
8.25%
2.87
Spain
154,509,871
53,200,982
6.77%
2.90
Netherlands
104,360,389
48,013,628
6.11%
2.17
Belgium
94,044,132
40,763,118
5.19%
2.31
Italy
88,801,293
30,241,996
3.85%
2.94
Austria
60,537,612
27,536,325
3.51%
2.20
Portugal
59,737,696
25,275,021
3.22%
2.36
USA
47,533,127
24,949,456
3.18%
1.91
Sweden
56,958,648
24,009,226
3.06%
2.37
Denmark
50,753,673
20,988,860
2.67%
2.42
Japan
58,865,820
20,397,788
2.60%
2.89
Mexico
33,649,834
18,922,621
2.41%
1.78
Ireland
45,952,049
16,292,490
2.07%
2.82
Sup-Total
1,487,826,560
576,571,366
73.41%
2.58
Others
460,365,586
208,890,901
26.59%
2.20
Total
1,948,192,146
785,462,267
100%
2.48
8 MAJOR REGIONAL MARKETS
The major importing countries of Ice-Cream products are outside the Middle East Region..
Hence to enter these international markets, the KSA producers will need time and funds in
order to formulate an export strategies and an export marketing plan that could be
successfully implemented – based on the requirements of the target market(s).
While the exporter is developing the company’s medium to long terms export plans to
potentially enter international markets, a short term development that can be more easily
set up, is to expand into markets in the surrounding countries and the Region as a whole.
While the markets closer to home are relatively small, they nonetheless offer the
exporter the potential to develop nearby markets, although in some markets there could
be competition from local producers as well as other imports. The table below, uses UN
Comtrade and GIOC data for the year 2005 to identified:- (a) the imports size in MENA
countries, and (b) any KSA recorded exports to those markets, as per the following table.
It is to be noted that there are other MENA countries, which have not submitted their
imports data and therefore not included.
Importing country
Imports from the World (
2005)
Value $
Volume - Litter
Imports from KSA (2005)
KSA Market share % of World
imports (in volume terms)
Value $
Volume - Litter
839,053.19
415,926
21.8%
1,184,686
171,284
70,233
5.9%
1,841,268
33,695.70
9,096
0.5%
Bahrain
4,021,300
1,908,312
Jordan
1,960,451
Oman
6,760,151
UAE
10,655,634
2,781,560
361,907.14
114,789
4.1%
Qatar
4,972,211
1,840,034
198,057.69
95,400
5.2%
Sudan
29,737
9,126
28,892
8,866
97.2%
Turkey
1,794,863
784,413
-
-
0.0%
Yemen
239,978
271,720
60,974
166,891
61.4%
Total
30,434,325
10,621,119
1,693,864
881,201
8.3%
Source: Comtrade& GOIC
Countries closer to home offer potential export opportunities for the local producers, but
the respective market size for the Countries is relatively small in comparison to the major
importers. However, this should not deter the local producer from entering MENA
markets as this can:- (a) help to iron out any initial export problems that the local
exporter may experience due to implementation of his export delivery systems in the
MENA markets, and (b) help the exporter to develop a good, working export marketing
plan that can be tried out in MENA countries before being implemented in more distant
export locations. It is worth to mention that the total imports from KSA in the above
table contradict with these in the export performance section. This could be attributed to
the deference of sources, as the data was extracted from three databases FTS, GOIC
and Comtrade.
9 MARKET TRENDS – IMPORTS & EXPORTS
To provide a better insight for local producers of Ice-Cream, the tablebelow provide some
historic information on world product trends in U.S $ million. These can be utilized, in a
general manner, to provide some indications of likely future trends for the products:Year
2001
1,187
1,226
Imports
Exports
Source: Comtrade
U.S $ millions
2003
1,713
1,759
2002
1,386
1,365
2004
1,900
1,921
2005
1,958
2,037
10 ESTIMATE OF IMPORTER’S LANDED COSTS
From the import/export statistics, it has been possible to ascertain an estimate of the
average landed costs for Ice-Cream HS Code: 210500 for the 15 major producers. This
has been calculated to be around $2.58/litter for the year 2005. Additionally, the landed
costs of some of MENA countries, during 2005, have also been calculated and details
provided as follows:AVERAGE LANDED COST IN SOME MENA COUNTRIES ($/Litter)
Bahrain
Jordan
Oman
UAE
Qatar
Sudan
Turkey
Yemen
AVE. LANDED COST
$/Litter
2.11
1.65
3.67
3.83
2.70
3.26
2.29
0.88
2.55
It should be noted that the quantities imported vary from country to country; hence, this
is reflected in the average landed costs – i.e. generally, lower levels of import tend to be
at a higher cost and visa versa. It is hoped that this information should assist local KSA
companies to ascertain, in a very general way, whether their respective products are likely
to be competitive in the above identified export markets or not.
11 LOCAL PRODUCERS & DISTRIBUTORS IN THE POTENTIAL EXPORT MARKETS
In the international market, it can be quite difficult for local exporter to easily identify:(a) their potential local competition, and (b) possible local agents/distributors that they
can work with in that target markets. Any exporter wishing to develop overseas markets
will need to undertake initial primary and secondary market research to identify the
relevant information that needs to be sought from that market. The short list below, for
Ice-Cream products, is an example of the information needed to identify and contact
overseas producers/distributors dealing in the selected target markets. This and further
information can be obtained via website www.kompass.com.
COUNTRY
COMPANY
DESCRIPTION
Oman
Al Duroob
Trading Co
Ice cream and sorbet
Lebanon
Bachir Frères
Sarl
Ice cream (trade)
Al Manal Ice
Cream Co.
Ice cream, dairy
Ice cream, egg based
Ice cream, fruit pulp
and juice based
Ice cream, chocolate
coated
Ice cream, wrapped
UAE
Turkey
Sartrade Tic San
ve Turizm
Soft ices
Iran
Barkat Dairy
Products P.J.S
Dairy ice-cream
Dairy ice-cream
lollies
Koch
Tiefkuhlkost
Ice cream, dairy
Ice cream, vegetable
fat based
Ice cream,
artificially flavoured
Ice cream, mixed
Ice cream lollies
Ice cream, bulk
Ice cream in cartons
Ice cream in cups and
tubs
Ice cream, wrapped
Ice lollies
Germany
CONTACT DETAILS
Ruwi 112, Oman
Phone:+ 968 705372
Fax:+ 968 708200
Ground floor, Moukarzel Building, Highway
Jal El-Dib (Metn), Lebanon
Phone:+ 961 4 414452 ; +Mob. tel.: 961 3 635980/635982
Fax:+ 961 4 982185
PO Box 1942 Ajman, Indl. Area, Ajman, UAE
Phone:+ 971 6 7482347
Fax:+ 971 6 7482349
Husrev Gerede Cad.Tozan Apt., 75/1 D:11 Tesvikiye, 80200
Istanbul, Turkey
Phone:+ 90 212 236 1253
Mob: -54-236 0332-236 0281
Fax:+ 90 212 2597678
No.208,10th Golbon St.,11th Ave.,Karaj old Road., 13876
Tehran, Iran
Phone:+ 98 21 6816988, 6801125
Fax:+ 98 21 6816989
Ollenhauerstraße 17
13403 Berlin
Germany
Phone:+ 49 30 4 96 20 82
Fax:+ 49 30 4 96 05 13
Egypt
Egyptian Trading
Ice cream, dairy
Italy
Il Mercante Srl
Ice cream, dairy
Ice cream, mixed
Spain
Arturo Lopez
Rodas, S.L
France
Gelso
4, Hassan Sabri Street, Zamalek, Cairo, Egypt
Phone:+ 20 2 7363105/7357510/7364163/7351815/7363568
Fax:+ 20 2 7351116
Via Giardini 605, 41100 MODENA (MO), Italy
Phone:+ 39 059 353343
Fax:+ 39 059 358607
Ice cream, dairy
Ice cream, fruit pulp
and juice based
Ice cream in cups and
tubs
Ice cream, dairy
Ice cream, fruit pulp
and juice based
Ice cream in cups and
tubs
Ctra. General Santander-Bilbao, Km. 2 - San Salvador
El Astillero 39610, Cantabria, Spain
Phone:+ 34 942 542 450
Fax:+ 34 942 558 416
ZI Thibault, 6, Rue Jean Grandjean, 31100 Toulouse, France
Phone:+ 33 5 62 87 48 00
Fax:+ 33 5 62 87 48 01 ; + 33 5 62 87 48 20
12 TRANSPORTATION COSTS
The cost of road transportation to neighbouring countries is dependent upon the type of
goods to be transported, the weight/volume and the distance. In the case of this type of
product, road transportation is usually undertaken using a 40 foot trailer of 22 tonnes.
Due to the nature of Ice cream products, a trailer should be refrigerated in order to
preserve Ice-Creams. The cost of refrigerated trailer is higher than regular trailer by
around 35%. An indication of average road transport cost to various surrounding
countries, from Riyadh and Dammam of a 22 tonne trailer (Non- refrigerated) are given as
follows:Country
Bahrain
Kuwait
Oman
Qatar
UAE
Egypt
Lebanon
Syria
Yemen
City
Muscat
Salalah
Sohar
Dubai, Sharjah
Al-Ain
Abu Dhabi
Cost Per Truck (22 Ton) - SR
GCC
950
1,650 – 2,042
2,042 – 2,850
4,800
2,750
1,700
1,650
1,900
1,650
NON-GCC
7,300
9,282
7,000
5,500
Cost Per Ton - SR
43.18
75.00 – 92.82
92.82 – 129.55
218.18
125.00
77.27
75.00
86.36
75.00
331.82
421.91
318.18
250.00
Regarding average sea freight costs, refrigerated container could be higher than the
standard container by 40-60%. The following tables provide ocean freights of 20 and 40
foot standard containers for some destinations.
Ocean rate from KSA to Africa
To Africa
Ports
From / Jeddah
USD$
20 Foot
40 Foot
Port Sudan
850
1,400
Mogadiscio
1,500
1,900
Cotonou
3,500
4,500
Ocean rate from KSA to India Semi Continent
To ISC (India Semi continent)
From / Dammam
USD$
Ports
20 Foot
40 Foot
Mumbai
425
650
Karachi
425
650
Colombo
700
1,050
Ocean rate from KSA to Europe
To Europe
Ports
From / Jeddah
From / Dammam
USD$
20 Foot
40 Foot
Hamburg
850
1,100
Rotterdam
850
1,100
Le Haver
850
1,100
Southampton
850
1,100
Hamburg
1,050
1,400
Rotterdam
1,050
1,400
Le Haver
1,050
1,400
Southampton
1,050
1,400
13 CONCLUSION & RECOMMENDATION
In conclusion, the KSA has about 151.72 million letters of surplus capacity of Ice-Cream,
which equates to a conservative export potential of around $346.27 million (SR 1.411
billion). Additionally, the Saudi surplus capacity (one shift) represents around 22.7% of
the total world imports. The aim of this report is to identify major importing countries
for the Ice-Cream, which could represent an export opportunity for Saudi producers. The
following are the main highlights of the report:
World Imports
o
o
The major importing countries for the HS Code: 210500, in 2005, were
the UK, France, Germany, Spain and Netherlands.
The total value of imports to these countries, in 2005, for the above HS
Codes was about $ 891 million.
o
o

World Exports
o
o

For the KSA exporter these and nearby countries could be investigated
to ascertain the commercial probability and viability of entering these
potential target markets – bearing in mind that ice cream is a difficult
product to transport as it requires refrigeration during transport,
storage, and display.
The import data indicates an average international landed price for the
above HS Codes to be in the region of $1.78/littre to $2.94/littre.
The major exporting countries for the HS Code: 210500, in 2005, were
France, Germany, Belgium, Italy and Spain.
The KSA exporter should investigate these countries to ascertain how
they have developed their export markets and what are their technocommercial and financial parameters for exporting.
Arabian & Other Nearby Countries
o
o
Although the surrounding market is small, several KSA exporters have
started to develop their export markets in these countries.
More effort needs to be undertaken by the local exporters to enable the
KSA to become a major exporting Country to the surrounding Arab and
non-Arab Countries in the Middle East and North Africa.
Furthermore, the following are the key points and advice for the exporters to consider in
developing their overseas opportunities:
KSA exporters have what it takes to compete in the international markets, but seem to
lack data of potential markets. Hence, in the first age, it is recommended for new
exporters to look for qualified agents and distributors in order to provide them with
sufficient information and facilitate their entering and penetrating in targeted
market(s).

AS KSA becomes an official member in WTO, current exporters have to plan to
implement direct export strategy through opining their own subsidiaries in the
international markets instead of hiring an agent, if that is evaluated to advance their
efforts.

Attending international exhibition is important key export success factor, as it gives
the opportunity to establish a trade relationship with a number of distributors and
agents within the beverages sector.

Exporters have to learn more about the international specifications to avoid risk of
returned shipments. Specifications can be sought directly by exporters from the
regulatory organization in the targeted markets, through contacting prospect agent to
provide the exporters with the specification from the regulatory organization, or from
specialized firm of international business such as Export Development Center / Trade
Point.
In summary, while some exporting is being undertaken, more effort could be directed
towards developing further export markets - some export opportunities have been
identified above. It is believed that these markets offer promise to local producers and
the local companies are encouraged to undertake evaluation of these markets to assess
their exporting potential.
Furthermore, the KSA producers are encouraged to contact local export insurance and
credit institutions in order to utilise the available facilities for export credit and the
insurance programmes cover for higher risk countries. The Saudi Export Program
(SEP), is operated under the Saudi Fund for Development (SDF) in Riyadh. KSA
exporters should contact the SEP, who can help them expand their export activities
and assist them to increase their sales volumes to more countries, with minimum risk.