Almunajem plans to enter fresh poultry business, provide logistics services: CEO

Thamer Abanumay, CEO of Almunajem Foods Co.

Almunajem Foods Co. intends to venture into the fresh poultry business through acquisition, equity investments, or strategic partnerships with local producers, CEO Thamer Abanumay, told Argaam.

The company's sales in the food and beverage sector account for more than SAR 3.2 billion out of a total market of SAR 170 billion.

Abanumay added that the company's market share in the poultry sector reaches 10% in general, while in the retail sector, it logs 20%.

Almunajem Foods has a leading share in other food categories, such as fruits, vegetables, frozen potatoes, olives, frozen ready-made meals, dairy derivatives, and others.

The CEO highlighted that his company has a business strategy until 2027, focusing on four axes; enhancing the diversity of food products (core and sub) to reach more than 26 food categories, as well as boosting the share of its brands such as: Dari, Montana, Al Anaam Al Saudia, Marietta, and others.

Almunajem seeks to maintain its leadership level in the retail sector, improve sales channels, and focus on the food services sector’s growth, which includes restaurants, hotels, catering, cafes, and others.

The company aims to enhance the local content and manufacturing capabilities to 15% and more than 40,000 metric tons of frozen meat, poultry, and fish products. It currently has a manufacturing capacity of 7%, up from 1% in the past.

Almunajem seeks to conclude strategic alliances with local manufacturers, attract global suppliers to establish factories in Saudi Arabia and localize their international brands, supply poultry and other products to exceed 30% of the local content in the coming period.

Abanumay pointed out that the last axis of the strategy is to provide logistics services to others in general and not only in the food business. This will be a new source of income for the company, as it has a competitive advantage in terms of supply, storage, and delivery, as it is close to the sales outlets in all regions of the Kingdom.

Almunajem Foods is engaged in the distribution, marketing, and production of frozen, refrigerated, and dry food products. It has more than 12 warehouses across all regions with a capacity of more than 60,000 metric tons. In addition, the company has a meat plant in Jeddah with a capacity of 16,000 tons to serve about 22,000 outlets across the Kingdom.

Commenting on Q3 2023’s financials, Abanumay said that the increase in profit by 14% was mainly backed by a 19.4% rise in sales volume of the core food items group and all sales channels: wholesale, food services and retail in all regions of the Kingdom.

The largest increase in sales came from the Western region due to the Hajj and Umrah seasons, followed by growth in tourism in both southern and central regions.

He clarified that the margins improved in Q3 2023 as a result of commercial stability in red and white meat and olive oil, compared to the exceptional circumstances in Q3 2022 on the consequences of the Ukraine-Russia crisis.

Demand levels were good and healthy, especially in July, which usually witnessed the holiday season and foreign travel, but tourism promotion as well as the back-to-school term prevented further decline in consumer demand.

Demand and supply chains are projected to witness stability by Q4 2023 with no expected surprises, he said.

Abanumay highlighted that the food sector is defensive and slightly affected by inflation.

Nevertheless, the sector is still witnessing continuous growth at up to 5% annually, supported by government initiatives to promote tourism, religious tourism in the Two Holy Mosques, a higher share of women’s participation and lower unemployment rates, which contributed to growth in food consumption, he added.