The latest step to progressing the Saudi Arabian government’s program towards food security is a new Memorandum of Understanding between local poultry company Tanmiah Food Company and MHP SE of Ukraine.
The partners say that the agreement is a first step towards a joint venture between MHP and a wholly owned Tanmiah subsidiary, Desert Hills for Veterinary Services Company Ltd. It also offers potential to help raise the contribution of domestic poultry production to the Kingdom’s overall consumption.
According to Tanmiah CEO Zulfiqar Hamadani, the new partnership demonstrates his company’s commitment to boosting the nation’s self-sufficiency in poultry production.
At the end of last week, the signing ceremony was held at the offices of the Ministry of Environment, Water, and Agriculture in Riyadh.
Joint venture hatchery, feed mill
The main aims of the joint venture initially will be to set up a new hatchery and boost feed milling capacity.
With an annual capacity of more than 100 million hatching eggs, the hatchery will be constructed on a greenfield site in Saudi Arabia, according to a joint press release by the partners. Annual output from expanded feed production is set for 137,000 metric tons.
While funding will come mainly from the Agriculture Development Fund of Saudi Arabia, MHP will contribute its expertise across the whole value chain to develop the best solutions for the Saudi Arabian market. The proposed joint venture is subject to regulatory and official approvals.
For MHP SE’s executive chairman Dr John Rich, the new agreement represents an important achievement in the group’s global strategy.
“The steady deepening of the relationship between MHP and Saudi Arabia is an important part of our long-term commitment to the region,” he said. “We continue to seek opportunities to make the best use of our expertise to improve food security around the globe. The agreement also brings closer together the people of Saudi Arabia and Ukraine.”
Executive Board Member & Managing Director of Tanmiah, Ahmed Bin Sharaf Osilan, highlighted that the agreement will support the group to build on solid results delivered by its feed and animal health businesses over recent quarters. He also expects the joint venture to generate sustainable long-term value to all the Group’s stakeholders.
“The material investments into this joint venture, will result in an expansion of our overall capacity, whilst supporting local job creation and delivering on the Kingdom's strategic vision for our sector,” he said.
More on Tanmiah Food Group
Since it was founded in 1962, Tanmiah Food Company has grown to become one the leading suppliers of fresh poultry, processed poultry, and other processed meat products, as well as animal feed and health products in the Middle East. It is a publicly listed company on the Saudi Stock Exchange.
As of December 2022, vertically integrated production by Tanmiah includes 108 farms, six hatcheries, two feed mills, four slaughterhouses, and 13 dry and cold storage facilities. In addition to Saudi Arabia, it operates from premises in Bahrain and the United Arab Emirates (UAE). Its products are sold through a network of wholesalers, retailers, and food service outlets, as well as online directly to consumers.
In the results for the latest quarter of the fiscal year, Tanmiah Food Group reported that its rising costs were amply covered by increased sales. The firm achieved a seven-fold jump in net profit for the period compared with the previous year.
More on MHP SE
Parent company of the international agri-food group, MHP SE is based in Ukraine. As well as in that country, it also has operations in the Balkans, and trades on the London Stock Exchange
As a fully vertically integrated chicken producer in Ukraine, MHP's operations include growing grains and oilseeds, feed milling, hatcheries, broiler farms, slaughterhouses, meat processing facilities, as well as marketing, distribution and sales.
In the Balkans, MHP operates as poultry integrator Perutnina Ptuj, a leading poultry and meat-processing producer in the region. It has production sites in four Balkan states, and distribution companies in three more countries, supplying products to 15 European nations.
With annual slaughterings of 520 million birds, MHP SE is among the largest poultry producers in Europe, according to WATTPoultry.com’s Top Poultry Companies survey.
In the past few weeks, MHP reported a double-digit reduction in its poultry production in Ukraine for December compared with the same month of 2021. This it attributes mainly to disruption caused by the Russian invasion of the country, which began one year ago.
