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00:00Hello, everyone, and welcome to a new episode of CEO Talks.
00:17Today, our guest is Mr. Dhulfiqar Al-Hamadani, CEO of Tanmia Food Company.
00:22Mr. Dhulfiqar, thank you so much for joining us at CEO Talks.
00:25Thank you very much for having me here.
00:27It's a pleasure to be here.
00:28Thank you.
00:29Let's start, of course, with the journey of Tanmia Food Company in the Saudi market over
00:33the years.
00:34If you can introduce the company to our audience and tell us about your journey.
00:39So Tanmia started back in 1962, so it's already more than six decades of journey, which makes
00:47us also the pioneers of poultry industry in Saudi Arabia.
00:52And this journey has been marked with our commitment to firstly, our customers and quality.
01:02So quality of our services, our products, our commitment to sustainability.
01:07So all this while, all along, especially in the last decade, we have really focused on
01:12sustainability in all facets and aspects of our business.
01:17Then commitment to our partners.
01:18We have built partnerships not only with international players, but also locally with farmers, with
01:24local players.
01:25So we are fully committed to not only enriching and adding value to our direct shareholders,
01:30but also adding value for our partners.
01:35Then innovation.
01:36That is the core of our business.
01:39Not only innovation of new products like omega-3 fortified chicken that we have recently introduced,
01:45but also innovation in the processes, innovation in the cost saving, innovation in improving
01:53efficiencies throughout the organization.
01:56And lastly, our commitment to our team.
02:00Because we have always believed that no processes, no investment can replace people.
02:05So we are committed to the training, career progression, and skill enhancement, and inclusivity
02:11and empowerment of our team.
02:14So through this, we are now among the top leading poultry producers in the kingdom.
02:22What's the market share approximately?
02:24We are 20 plus percent of retail in the kingdom currently, which makes us a very comfortable
02:33second and very challenging for the number one.
02:38Our aim is, of course, to go to number one.
02:42We are contributing towards the food security initiative of Vision 2030 through various
02:48activities, poultry being one.
02:51We are also working on the feed saving, the grains which are imported, we are working
02:55on those.
02:57So it has been a wonderful journey, six decades.
03:02And we are looking at only increasing our production and our offering to our customers
03:09many fold in the coming years.
03:12So let's talk about your presence.
03:13Your presence mainly is now in GCC and in Saudi Arabia.
03:18Can you give us a little bit of numbers around your presence in the GCC, the market share
03:22in GCC, and where do you find investing opportunities and expansion opportunities in the region
03:28overall?
03:29Okay, so Saudi Arabia being the biggest market and our home country.
03:34We are based out of Riyadh, that's where our headquarters are.
03:38But our production facilities are spread all around Saudi Arabia.
03:42In fact, we also have a factory in Dubai.
03:46We have about 200 farms and other production facilities, majority of which are in the Riyadh
03:51province and in south of Saudi Arabia also in Jazan province.
03:57Plus we have about 20 distribution centers across Saudi Arabia and five outside Saudi
04:03Arabia in GCC, Kuwait, Bahrain, UAE, Oman.
04:08And we have, as I mentioned, a production facility, further processing facility in Dubai.
04:15Further investment is needed, of course, firstly to expand capacity because we see-
04:20What's the current capacity right now?
04:22Currently we have about 550,000 birds per day processing capacity, six days a week.
04:29Our further processing capacity, burgers, nuggets, et cetera, that is about 35,000 metric
04:34tons a year.
04:36And we are expanding all of these capacities.
04:40We are- So in Saudi Arabia, for example, one is import substitution, investing towards
04:46the food security of the kingdom because the kingdom has set itself a target of self-sufficiency
04:52in poultry production.
04:53So we want to be really in the front row of that initiative, which we are.
05:00We want to go up to one million plus birds a day by 2027 and then more by 2030.
05:07So this is just a milestone, not the final destination that we want to get to.
05:11Similarly, in further processing, we have partnership with Tyson Foods of U.S. where
05:16we want to multiply this current capacity.
05:20We also have invested in a fast food restaurant chain, Popeye's, which we have about 55 stores
05:28already in Saudi Arabia.
05:30We started about 18 months ago.
05:32And we are bringing that store now to Bahrain, Kuwait, and rest of GCC.
05:38So we see a lot of opportunities of investment in GCC, including Saudi Arabia.
05:43And we are also working on automation of our existing facilities.
05:48So that is another investment.
05:50Sustainability initiatives all around our operations.
05:53So that is another investment.
05:54So we have embarked on this investment campaign kind of about three years ago.
06:02And the next stop is 2030.
06:05So what's the demand picture looking like, especially in GCC where the demographics,
06:09I believe, actually is a supporting factor for higher demand?
06:14So to what extent is the demand picture supporting your ambitions to more capacity?
06:19Oh, it is supporting a lot.
06:24We see a lot of opportunity now, for example, in Saudi Arabia itself.
06:28The non-religious tourism is on the rise.
06:31The domestic tourism is also on the rise, which means that the people don't travel
06:35outside Saudi Arabia, the residents and citizens.
06:38They do tourism within Saudi Arabia.
06:40So our market remains intact.
06:43The buying power is also on the higher side as compared to the rest of the world.
06:48And the economic policies of the governments of GCC have helped kind of save this region
06:58from the economic downturns which were suffered by the rest of the world.
07:03So we are very bullish about the future of demand.
07:08We are now investing also a lot in product development to bring further process ready
07:14to eat products, heat and eat kind of products, which are as per the local cuisine, local
07:21taste and preferences, and healthier products.
07:27Not importing concepts from elsewhere in the world, but developing based on the traditions
07:33and cuisines of the region.
07:35So we see a lot of demand growing and by bringing in more products to the region, I think we
07:44have a good future ahead.
07:46So do you have a certain budget for expansion set for this year?
07:50Yes, we do.
07:53But I would like to speak more about our next five years plan, because budgets is only expenditure
08:01out of that plan.
08:03We are planning to spend about 4.5 billion rials in the next five years in our expansion,
08:11which includes capacity expansion, which includes automation and opening new stores, new distribution
08:19centers and bringing new products to our consumers.
08:24You mentioned sustainability and innovation as key part pillars of your operations.
08:31Let's go with sustainability first.
08:32What's your sustainability agenda and how do you deal with this topic, especially in
08:37your industry, where sustainability is at the core of your operations, day-to-day operations?
08:43So in any food and agricultural business, there is a lot of wastage, which is usually
08:50thrown away.
08:52And even before the government of Saudi Arabia announced the Green Saudi Arabia Initiative,
08:57we embarked on a million tree project, where we are planning to plant million trees in
09:07the middle of the desert using our waste and achieving the circular economy model.
09:12Now what is important with circular economy model is that it should save our costs.
09:16It should not be a drag on our profitability, but it should add to our profitability by
09:21improving efficiency, by reducing costs.
09:24These trees, we have already got about half a million trees already out there.
09:28Some of them are, majority of them are four or five meters tall.
09:32And now we are working to plant infect trees with the fruits and vegetables.
09:37So that's one area.
09:39Then we also have what we call the Sustainability Grand Challenge, where we use a platform out
09:47of Switzerland and invite all the innovators and scientists around the world and throw
09:52them a challenge.
09:54And they come up with solutions.
09:55The winners get about a million dollars in cash prize and an opportunity to do a joint
10:01venture with Tanmia in commercializing the concept.
10:05So the first one, which we did in 21, was immediately after COVID we did that, was about
10:15bringing in plastic out of the chicken waste.
10:18So that we are now commercializing.
10:21We already have the IP registered in our name.
10:25Now we are working on grains.
10:28Now chicken feed is dependent on grains, which are imported to this region.
10:35Can we feed chicken something which is local to this region?
10:39You know, a grain, a herb, anything.
10:42So we, and I'm very surprised that there are some magnificent ideas which have come up.
10:50And we have an independent jury, which is assessing those ideas.
10:54So sustainability is at the heart of whatever we do.
10:57It's not one of the pillars.
10:58It's the core of what we do.
11:01And that core is also, as I mentioned earlier, that adds value to our profitability.
11:07It should not be a drag.
11:08So in the worst of times, economically, this should help us rather than be a burden on
11:15us.
11:16How do you come up with new products and new segments and verticals for your business?
11:23I mean, I know this is mostly about innovation, but what factors do you take into consideration
11:29when coming with a new vertical or a new product?
11:31Okay, so our vision is to be a global leader in halal protein, sustainable halal protein,
11:41and be number one globally.
11:42So this is the vision which drives everything.
11:47And we have this value chain right from the back end.
11:51I don't want to be too technical, but something starting from pear and chicken until our restaurants
11:57like Popeye's, and whatever adds value to each segment of our value chain.
12:03So this is how we look at our business, look at our expansion, and where owning a segment
12:11of our value chain would add more value to our business rather than outsourcing it.
12:16We also extensively use the consultancy firms like McKinsey and Bain, et cetera, to come
12:21up with our strategy.
12:23We do consumer research.
12:26In fact, we have now our app for online deliveries of our product directly to our consumer.
12:34There we are getting a lot of feedback from them, so that helps us in developing new products.
12:39And then we are seeing now a lot of females are joining the workforce in this region,
12:47the locals, which means that they are in need of some healthy, ready-to-eat, heat-and-eat
12:56kind of products, which are healthy, like nuggets and burgers you can't eat every day.
13:01So we are looking at those.
13:03So this is how our product development works, and this is how our overall expansion works.
13:09Thank you so much for joining us today.
13:10We wish you the best of luck with everything that you do.
13:13Thank you very much.
13:14I'm very happy that I was able to make it here.
13:17Thank you.
13:18Thank you, sir.
13:19So, ladies and gentlemen, this was Mr. Dulfiqar Al-Hamadani, CEO of Tanmia Food Company.
13:25With this, we come to the end of this episode of CEO Talks.
13:28See you.
13:39Thank you.