Al-Safi Dairy, part of Al-Faisaliah Group, is currently conducting talks to acquire Al-Azizia Dairy Farm Co. (Azizia Dairy), director general of the Group Ali Al-Rukban told local media.
Negotiations between the two parties are in the final stages and the acquisition deal will be signed in the next two weeks, he was quoted as saying. Details of the deal will be announced at the time, he said.
Director General of Azizia Dairy and Head of the National Committee for Fresh Milk Anwar Jan declined to comment on the (acquisition) news. He also refused to give comments on studies indicating that dairy companies plan to stop production lines of long-life milk due to the increased costs of raw materials used in production.
Azizia Dairy Farm Co. is one of the first farm companies that accompanied the dairy industry in the Kingdom and its beginnings dated back to 1982 when it brought 2,000 heads of cattle from the United States and the Netherlands to begin the project.
The production was limited to milk and laban and, later, expanded to cover other fresh products such as yogurt, cream and other derivatives.
Established in 1979, Al-Safi Dairy is said to have the largest single integrated dairy farm in the world that covers 3,500 hectares of land, has a herd of 37,000 Holstein cattle, and is the supplier of high-quality milk to Al-Safi Danone.
Al-Safi offers a range of healthy milk, cream, yogurt, laban, and labneh. All Al-Safi products are reportedly fresh, pure and 100 percent natural.
Commenting on the ongoing negotiations between the two companies, member of the National Committee for Fresh Milk Ali Al-Ali said 13 small-scale dairy companies are threatened to either stop or to be sold out due to the increased costs of production and raw materials.
He described exit of some companies from the market as “a great loss to the community” and, in this context, called for the implementation of a royal decree ordering the Agricultural Development Fund (ADF) to support the troubled farm projects.
Experts say the Saudi market accounts for nearly 56.4 percent of the total GCC fresh dairy and milk market.
Based on released data, the fresh milk market in the Kingdom is dominated by Almarai with 46 percent market share followed by Al-Safi Danone at 21 percent, Nada Dairy at 13 percent and Nadec at 9 percent with others making up the remaining 11 percent.
Al-Safi in talks to acquire Azizia Dairy
