Almarai completes SAR 119 mln farmland deal in California

Almarai Co., Saudi Arabia’s largest dairy company, has completed the purchase of 1,790 acres of farmland in California through its subsidiary, Fondomonte California LLC, for SAR 119.3 million ($31.8 million).

The deal was completed on Jan. 8 and was financed from the company’s internal resources, Almarai said in a statement to the Saudi bourse, Tadawul on Sunday.

The transaction secures Almarai its supply of the high quality alfalfa hay from outside the kingdom to support its dairy business, it said.

Almarai added that it will invest in the infrastructure needed to transport the hay from its U.S.-based facility to Saudi Arabia.

The purchase will be reflected in financial statements for the first quarter of 2016, the company added.

Almarai has previously said it is expanding its supply chain and access to feed for its dairy herd and poultry business, in line with the Saudi government policy to preserve local resources.

The kingdom is encouraging food companies to invest in Africa and Asia to reduce local grain production and conserve water. The government is seeking to end the cultivation of water-intensive crops, including wheat, in the country by 2016.