Dairy production in KSA needs SR15 billion investment by 2020

Updated 28 March 2015
0

Dairy production in KSA needs SR15 billion investment by 2020

The dairy industry sector in the Kingdom is in need of additional investments estimated at SR15 billion to shore up production either by expansion of the existing projects or construction of new ones by 2020, according to a new study.
The projected investments are aimed to bridge the gap between the current production levels and expected consumption requirements, the study reported by Aleqtesadiah daily said.
Riyadh region captured the highest portion of capitals invested in the dairy industry at 70.5 percent, followed by Makkah region (20.4 percent) and the Eastern Province (7.4 percent), whereas the other regions took the remaining 1.7 percent, the report said.
Similarly, the Riyadh region topped other regions of having the largest number of factories for dairy products, at 40 plants, or 37 percent of the Kingdom’s totals, followed by the Makkah region at 27 plants (25 percent), the Eastern Province 20 plants (18.5 percent), Qasim region 8 plants (7.4 percent), Madinah 5 plants (4.6 percent), Tabuk and Hail 2 plants each (1.9 percent), Jazan and Najran one plant each (0.9 percent), the report said.
In terms of manpower working in the sector, the Riyadh region captured the lion’s share where their number stood at 23,405, or 60 percent of the total work force in the dairy sector, followed by the Makkah region at 9,907 (25.4 percent), the Eastern Province at 4,427 (10.8 percent) whereas Najran, Madinah, Qasim, Asir, Jazan, Hail, and Tabuk employed 600, 325, 270, 134, 52, 38, and 16 workers, respectively, the report said.
The study, supervised by the national committee for dairy producers in collaboration with a specialized research firm, said the sector is facing a series of obstacles, including the growing increase in the prices of production inputs compared to stabilized prices of dairy products, limited government support to dairy companies, and high profit margins imposed by stores on sales.
Other challenges include unfair competition between mega- and small-scale dairy firms, scarcity of local manpower coupled with higher wages sought by imported laborers, and shortage of lands cultivated with green fodder, the report said.


WEEKLY ENERGY RECAP: China distracts from Strait of Hormuz

In this May 5, 2019 photo issued by Karatzas Images, showing the British oil tanker Stena Impero at unknown location, which is believed to have been captured by Iran. (AP)
Updated 13 min 15 sec ago
0

WEEKLY ENERGY RECAP: China distracts from Strait of Hormuz

  • China’s economy slowed to the weakest pace since quarterly data began in 1992 amid the ongoing trade standoff with the US, while monthly indicators provided signs of some stabilization emerging

RIYADH: Crude oil prices deteriorated despite rising tensions in the Arabian Gulf toward the end of the week. Brent crude prices dropped to $62.47 and WTI dropped to $55.63 per barrel.
WTI recorded its biggest weekly decline in seven weeks, having fallen sharply earlier in the week on hopes that the situation in the Gulf would improve along with parallel worries about global demand. At the same time, a major storm hurt output in the Gulf of Mexico, where production was down by almost a fifth in its wake.
We saw a continuation of the theme of previous weeks where the oil price largely ignored events in and around the Strait of Hormuz, even after Iran seized two British-flagged oil tankers.
Instead, the market reacted to Iran’s potential nuclear deal with the US that would include permanent enhanced nuclear inspections in return for the lifting of sanctions.
China’s crude oil throughput rose to a record in June, up 7.7 percent from a year earlier, following the start-up of two large new refineries. Crude oil processing reached 13.07 million bpd, beating the previous record in April of 12.68 million bpd.
Despite strong oil demand from China, oil prices slipped after Beijing posted its slowest quarterly economic growth in at least 27 years, reinforcing concerns about demand in the world’s largest crude oil importer.
China’s economy slowed to the weakest pace since quarterly data began in 1992 amid the ongoing trade standoff with the US, while monthly indicators provided signs of some stabilization emerging.
The International Energy Agency pounced on that news and published a shaky oil demand outlook and reduced its 2019 oil demand forecast to 1.1 million bpd, down from its initial forecast of 1.5 million bpd, due to the slowing global economy and the US.-China trade war.
Yet the economic impact of the US-China trade argument is not an oil market-reflective. Surprisingly, some economists suggest that the trade dispute could spark a global recession, sending incremental oil demand lower. This has caused growing concern about supply and poor economic growth that has pushed oil prices lower, based purely on sentiment.
Arabian Gulf crude grades have further strengthened backed by demand uptick from North Asian refineries.
Norway’s crude oil production slipped to the lowest in three decades to 1.38 million bpd in April from 1.387 million bpd in March and 1.531 million bpd a year ago.

Faisal Faeq is an energy and oil marketing adviser. He was formerly with OPEC and Saudi Aramco. Twitter:@faisalfaeq