Riyadh – Mubasher: Almarai Company on Sunday announced that it has stopped the production of alfalfa and green forage in Saudi Arabia.

The Gulf's largest dairy company’s decision is  in accordance with the terms of the Ministerial Council Resolution (66) dated 7 December 2015 to completely stop the local production of green forage for areas above 50 Hectares.

The Saudi food and beverage firm said that it has reached full compliance with the Resolution by securing 100% of the supply of all forage outside the Kingdom in a bid to support its dairy and poultry businesses, according to a statement to the Saudi Stock Exchange (Tadawul).

Alfalfa and green forage imports originate from different locations, including the US, Argentina, Spain and Eastern Europe, from selected third party suppliers or from the Company run farms, it added.

Almarai estimated the full cost impact of this new sourcing model at SAR 350 million per year.

“This adverse effect is anticipated to take place over a period of 2 years due to the large forage stock,” according to the statement.

Almarai’s net profits after calculating Zakat and taxes fell 4.8% to SAR 634.5 million by the end of Q3-18, compared to SAR 66 million during the corresponding period a year before.

During the first nine months of 2018, Almarai logged a profit of SAR 4.21 billion, down slightly by 0.90% from SAR 4.24 billion in the same period of last year.