Saudi Almarai buys $47.5 million worth of land in the United States to grow animal feed

Almarai Co., the Saudi-based Gulf’s largest dairy producer, bought on March 6 land worth SAR 178.1 million ( $47.5 million ) in Arizona, the U.S. through its subsidiary, Fondomonte, to grow alfalfa as the company seeks to diversify its animal feed sources, the company said in a statement to the Saudi bourse, Tadawul.

The company will finance the purchase of the 9,834 acres of agriculture and grazing land from its own resources. The financial impact of the deal will be reflected in the first quarter of 2014, it added.

The move came in response to Saudi Arabia’s ground water conservation program, as the water-poor kingdom is accelerating efforts to phase out its local wheat and animal feed production to stop depletion of its aquifer.