Saudi processing merger

SAUDI ARABIA – Five dairy processors in Saudi Arabia have announced their intention to merge.

Oversupply in the Saudi industry has brought on tough competition recently and so the Azizia, Najdia, Mazra, Hana and Riyadh dairies have begun talks to create a new company capable of processing up to 80 million litres of milk per day.

The new company will take an 11% share of the domestic Saudi market a market share of 11 per cent. However, with slow demand and low prices, the outlook for the country’s industry remains bleak.

There are currently 26 major dairy producers in Saudi Arabia. However Alsafi, owned by French group Danone, and Almaira control more than 60% of the market. Another 25% is divided between Nadek and Nada.

Demand for milk in Saudi Arabia is currently growing by around 4% annually.