Almarai says importing animal feed will increase the cost by SAR 400 million annually

Almarai Co., the Saudi-based Gulf’s largest dairy producer, said the cost increase of importing animal feed will reach SAR 400 million annually at present production capacity after the company had phased out growing animal feed locally.

The cost increase is expected to soar to SAR 900 million in the next five years which will reflect negatively on the profit of the company’s board members who own 77 percent of the shares, Prince Sultan bin Mohamed al-Kabir, the company’s chairman, told CNBC Arabiya.

The company said last month that it was planning to stop local animal feed production,

particularly alfalfa, in response to the Saudi government water conservation drive.

The company will eventually import all its animal feed either from a third party or from its own farms in the U.S or Argentina.

Almarai paid $47.5 million in February for 9,836 acres of agriculture and grazing land in Arizona, the US to grow alfalfa.