Dairy Firms Consider Merging in Saudi Arabia

  • 9/1/2018
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A number of small and medium dairy product companies in Saudi Arabia are considering merging as an option. According to Asharq Al-Awsat, the small and medium dairy firms in the kingdom have an opportunity to merge -- this step is expected to achieve an increase the companies’ capacity in production and outreach to customers, instead of only selling raw products to giant companies. Furthermore, the decision to halt the production of green fodder locally would likely push towards merger among the small and medium dairy firms, especially that some of these small companies won’t be able to directly import fodder, something that requires direct financial and managerial capabilities. Mergers might help prolong the longevity of firms in a way that allows them to regain part of their capital put into the industry. Notably, studies revealed recently that the small dairy companies will definitely merge with giant companies. These developments come with Saudi Arabia announcing an implementation mechanism of the regulations regarding halting green fodder production. During a news conference in Riyadh, the Ministry of Environment, Water, and Agriculture affirmed that the farmers in the country will be compelled in the future to issue an agricultural record by which the kind of activity, the cultivated space, and the farm coordinates are determined. In a related matter, Undersecretary of the Ministry of Environment, Water and Agriculture Eng. Ahmed al-Ayada revealed that the ministry’s approach ensues from its keenness to maintain resources of underground waters.

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