Saudi Arabia’s Almunajem Foods Co. and Balady Poultry have established a seven-year partnership for processing and distribution. This agreement aims to enhance their presence in the food and beverage industry by leveraging a profit-sharing strategy.
In an official stock market announcement, Almunajem Foods revealed that Balady Poultry would be responsible for producing and packaging both companies’ poultry brands, serving customers both domestically and internationally. Almunajem Foods will oversee marketing and distribution efforts.
Balady Poultry confirmed this collaboration with a nearly identical statement. Notably, “No specific value has been determined” for this deal, according to Almunajem’s filing.
Thamer Abdulaziz Abanumay, managing director of Almunajem Foods, has an “indirect interest in this agreement” as vice chairman of the Balady Poultry board. Similarly, Abdullah Omar Bawazir, a board member at Almunajem Foods, holds an analogous interest in Balady Poultry, as mentioned in the filings.
In November, Almunajem Foods announced the resignation of CEO Bin Abdulaziz Abanumay, effective December 31, after eight years of leadership. He will continue as a board member, while Ali Hasan El Zain has been appointed the new CEO starting January 1.
The two companies clarified the nature of their partnership, stating, “The agreement aims to support continuous shared growth for both companies and increase the market share of locally produced products in the Saudi market with higher quality and improved operational efficiency.” They emphasized strategic integration within the poultry sector, benefiting both the producer and distributor.
Almunajem Foods also released its third-quarter and year-to-date results in November. Revenue for the quarter ended September 30 increased by 2.2% to SR816.1 million ($217.6 million). However, operating profit declined by 5.2% to SR36.4 million, and net profit fell by 21.7% to SR31.7 million. The rise in revenue was attributed to increased volumes across all categories, despite declining average selling prices.
For the nine-month period, revenue dipped by 0.5% to SR2.51 billion. Operating profit saw a significant decline of 46% to SR118.3 million, while net profit dropped 52% to SR102.7 million. Almunajem Foods specializes in chicken, turkey, duck, and quail, with its Dari brand. Balady Poultry is recognized for its namesake chicken brand.
In its latest results for the same periods, Balady Poultry reported a slight revenue increase of 0.5% for the third quarter to SR218.9 million, although it experienced a 4.9% drop year-to-date, totaling SR634.1 million. Operating profit decreased by 67% for the quarter and by 72% over nine months, landing at SR9.1 million and SR26.2 million, respectively. Net profit also faced a 74% decline for both reporting periods, totaling SR7.4 million and SR25.4 million.
In summary, the collaboration between Almunajem Foods and Balady Poultry is poised to capitalize on emerging food and drink consumer trends, strengthening their foothold in the competitive food and drink business landscape.
