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Saudi Almarai Co. on Nov. 3 halted production of Alfalfa and green fodder inside the Kingdom and will begin importing 100 percent of its needs in compliance with the Kingdom’s ban on cultivating green fodder, the company said in a statement to Tadawul on Sunday.
The dairy producer will secure the supply of quality alfalfa from outside the Kingdom to support its dairy business, with imports from different countries, including the United States, Argentina, Spain, and Eastern Europe.
Almarai’s total investments in these countries stood at nearly $500 million over the period from 2014 to 2018.
Alfalfa imports are likely to cost SAR 350 million annually, the company said, adding the related financial impact is expected to show within two years due to the large forage stock.
Meanwhile, the company is studying options to relocate its arable assets to its farming entities overseas. A one-time write-off net effect of SAR 50 million from discontinuing operations is expected to be recognized by the year-end.
“Since the governmental resolution, Almarai has gradually increased, as previously announced, the percentage of its forage requirement imported from 52 percent in 2016 to more than 75 percent in 2017,” the statement added.
In December 2015, the Saudi agriculture ministry issued a three year green fodder phase-out plan to end local production by 2019.
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