A new long-term credit facility amounting to 450 million riyal (SAR; US$120 million) has been secured from Banque Saudi Fransi, reports Tanmiah Food Company. This will be used to support the strategic expansion plans of the Saudi Arabia-based poultry company.
Guaranteed by promissory note, the duration of the agreement is seven years from the first draw-down.
Tanmiah had previously announced its intention to grow its fully integrated and efficient business model within the Kingdom of Saudi Arabia, as well as regionally and globally. Among the favorable market trends it identified in the latest financial report was annual growth of more than 10% in the global halal food market over the period 2023-2028. Tanmiah has also been is exploring opportunities in further downward integration in the food supply chain.
Furthermore, the firm reports that the Saudi government has been supporting a range of initiatives that aim to increase domestic food production, and boost food security.
Poultry, food franchise sales drive Tanmiah’s revenue
For the latest quarter for which the firm has published results, revenue was more than 13% higher year-on-year at SAR533.7 million. This was for the three months before September 30, 2023. However, gross profit was 3% lower than in the comparative period at SAR117.4 million. Operating profit (expressed as Earnings Before Interest, Taxes, Depreciation and Amortization; EBITDA) tumbled by more than 17% to SAR65.0 million.
For the nine-month period to the same date, however, Tanmiah’s revenue and gross profit were up 21.5% and 14.1%, respectively, year-on-year. In contrast, EBITDA was marginally lower than 12 months previously.
Commenting on these results, CEO Zulfiqar Hamadani said that fresh poultry sales and a food franchise vertical business had led this growth.
For the nine-month reporting period, fresh poultry sales accounted for 83% of the company’s total revenue. It has increased 18% year-on-year to almost SAR1.264 billion. Sales volume had also increased from 456,000 birds per day as of December 31, 2022 to 500,000 by September 30, 2023.
“The tremendous success of Popeyes in the Kingdom of Saudi Arabia, following the launch of our food franchise vertical in 2021, continues, with revenues more than tripling during the nine months,” Hamadani said.
By the end of the reporting period, Tanmiah was operating 36 Popeyes stores across the country.
Strong demand for animal health products and equipment drove growth for the group’s Animal Feed and Health business, the company stated. For the first nine months of last year, revenue was up 20% year-on-year at SAR192.6 million.
Managing director and executive board member, Ahmed bin Sharf Osilan, summed up the company’s future objectives.
“Tanmiah continues to focus on investing for the future through strengthening our core business segments, enhancing our capacity, diversifying our revenue streams, and establishing new strategic partnerships,” he said.
More on Tanmiah Food Company
With annual production of around 122 million chickens, Tanmiah Food Group is easily among the 10 largest poultry companies in the Middle East, according to the WATTPoultry.com’s Top Poultry Companies survey.
Since its foundation in 1962, Tanmiah Food Company has grown to become one of the region’s largest producers of fresh and processed poultry, as well as other processed meat products, according to the firm’s web site. A vertically integrated company, it also supplies livestock and poultry feeds, and animal health products.
As of September, the group operated 120 farms, six hatcheries, two feed mills, and four slaughterhouses. It has production, processing, and distribution facilities not only in Saudi Arabia, but also the United Arab Emirates (UAE), Bahrain, Oman, Jordan, and Kuwait.
Sales channels are through wholesalers, retailers, food service, and online directly to consumers.
In September of 2023, it was announced that Tanmiah had agreed with MHP of Ukraine to strengthen an existing poultry production partnership. Its aims were further to strengthen food security in Saudi Arabia, and to boost self-sufficiency in chicken production.
Two months later, Tanmiah Food Company signed a new agreement with PLK Europe that will see restaurant chain Popeyes expanding into Bahrain and Kuwait.
