Dairy production in KSA needs SR15 billion investment by 2020

28/03/2015 06:40 AST

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.

Arab News