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* Co says sukuk will be second tranche of programme
* Sale open only to Saudi investors
* Almarai issued 1 bln riyal sukuk in March (Adds detail, background)
DUBAI, Nov 5 (Reuters) - Saudi Arabian dairy and food producer Almarai Co plans to issue the second tranche of a riyal-denominated Islamic bond programme in the coming months to private investors, the company said in a bourse on Monday.
The Gulf's largest dairy firm raised 1 billion riyals ($266.6 million) through the first tranche in March in a deal which was 4.7 times oversubscribed.
"This second tranche of sukuk will be a private offering to sophisticated investors resident in the Kingdom of Saudi Arabia," the company statement said.
Proceeds from the sukuk are seen helping finance Almarai's $4.2 billion investment programme which is aimed to expand its business between 2013 to 2017.
Almarai has been keen to expand its footprint outside its core presence in the Gulf region. In December it acquired Fondomonte S.A., which owns and operates firms in Argentina, to secure feed for its dairy herd and poultry business.
The company's third quarter earnings rose 4.7 percent but fell short of analysts forecasts as higher commodity prices and expansion costs ate into earnings, it said in October.
Shares in Almarai are up more than 20 percent this year. ($1 = 3.7505 Saudi riyals) (Reporting by Rachna Uppal; Editing by Dinesh Nair)