Article details
Naf Company for Feed for Industry has terminated two poultry feed manufacturing and supply contracts with Mazarena Poultry Co. and Riyadah Taryah Poultry Co. by mutual agreement. The termination stems from misaligned pricing terms with current market conditions, prompting a shift to periodic purchase orders. The company emphasized that the move aims to protect profit margins and operational stability amid volatile market dynamics. The contracts, valued at SAR 55 million and SAR 62 million respectively, were replaced with flexible agreements based on future demand and production capacity. Naf anticipates revenue impacts in 2026, though the exact financial effect remains uncertain due to variable order volumes.
For markets, this decision reflects broader industry challenges in maintaining fixed-price contracts during fluctuating input costs and demand. Traders may observe short-term volatility in Naf’s stock as investors assess the long-term viability of this strategy. The shift to periodic orders could also signal a trend toward more flexible supply chain arrangements in the Saudi feed sector. Investors should monitor Naf’s quarterly reports for updates on revenue trends and production capacity utilization.
The termination highlights the company’s proactive approach to managing financial risks in a competitive market. For Gulf investors, this underscores the importance of adaptability in contracts tied to commodity-sensitive industries. Key watchpoints include Naf’s ability to secure consistent orders under the new model and its impact on 2026 earnings projections. Market participants should also track broader poultry feed sector performance in Saudi Arabia.
