Saudi’s Tanmiah and Tyson Foods enter into strategic partnership

The US-based Tyson Foods, Inc. and Saudi Arabia’s Tanmiah Food Company announced entering into a strategic partnership agreement on Sunday. The parties to the agreement are Tyson Foods and Agricultural Development Company (ADC) and Supreme Foods Processing Company (SFPC), Tanmiah’s wholly owned subsidiaries.

Global protein consumption across chicken and other meats is forecasted to rise to 95 billion pounds over the next 10 years, with much of that demand happening outside the US. Meanwhile, the global Halal food market is expected to achieve unprecedented growth over the long term, with industry reports pointing to a Compound Annual Growth Rate of nearly 10% by 2032.

Tyson Foods is one of the world’s leading food companies and a recognized leader in protein, while Tanmiah, which established its first company 60 years ago, is one of the biggest providers of fresh value-added poultry and other meat products, animal feed & health products and a fast-food brand franchise operator, with plans to produce more than one million birds per day by 2025.

ADC operates in Saudi Arabia, Bahrain and the UAE. Through ADC, the company produces and distributes fresh products for sale to food service providers and retailers. SFPC produces a variety of value-added pre-prepared chicken and beef products, with a distribution network spread across the Middle East, including Saudi Arabia, Kuwait, Bahrain, UAE, Oman, and Jordan among others.

As part of the agreement, Tyson Foods and Tanmiah have committed to invest substantially to expand the processing capacities of SFPC. This investment is aligned with Tanmiah’s strategic expansion agenda and will result in doubling the company’s production capacity in value-added products. Both companies, through a 50/50 joint venture, will also explore opportunities in the fast-growing global Halal market, and as per the agreement, Tyson Foods will own a 15% equity stake in Agricultural Development Corporation (ADC) and a 60% equity stake in Supreme Foods Processing Company (SFPC). The transaction will be subject to approval by the General Authority for Competition in the Kingdom of Saudi Arabia and other government entities.

Through this partnership, Tanmiah will continue to support the growth of Saudi Halal products by bringing world-class sector expertise to the Kingdom. Through its expansion, Tanmiah will also create a number of job opportunities in the local Saudi market.

Significant Milestone

Zulfiqar Hamadani, CEO of Tanmiah, said: “This partnership marks a significant milestone in Tanmiah’s journey, through demonstrating our commitment to our pioneering role in supporting Saudi Arabia’s food security and self-sufficiency goals.”

“During this new phase, we will continue to work together with Tyson Foods, whose commitment to animal welfare, food safety, sustainability, and quality, are very much in line with our own business model and sustainability framework. This transaction will not only reinforce our positioning in the regional market but will also enable us to expand our global footprint through leveraging Tyson Foods’ long-standing relationships with customers worldwide,” he added.

“This investment will enable us to access poultry supplies in Saudi Arabia to meet the growing demand for protein in the Middle East and other markets,” said Chris Langholz, president of International for Tyson Foods.

“Expansion into international markets is a key part of our strategic growth plan and we’re pleased to better serve customers in this region,” he added.

Accelerates Growth

“The strategic partnership is expected to accelerate Tyson Foods’ and Tanmiah’s growth and generate significant value in the short and long term,” said Tan Sun, president of Tyson Foods APAC. “This will be primarily achieved through further expansion across the value chain, and enhanced product, customer, and geographical diversification, as well as improvement of production and other operational processes. The agreement will also see Tyson Foods and Tanmiah unlock long-term opportunities in the fast-growing Halal food market.”

 “In line with our ambitious growth plans and ongoing endeavours to deliver significant long-term value to shareholders and customers alike, we proudly announce Tanmiah’s partnership with Tyson Foods,” said Ahmed Bin Sharaf Osilan, Executive Board Member & Managing Director of Tanmiah. “There is no doubt that this partnership will enable us to achieve further expansion and success across all stages of the supply chain from sourcing of materials to production and final distribution, in addition to enhancing supply chain efficiencies and improving margins. Alongside the significant opportunities that will emerge for the company in the future, we are also looking forward to further advancing our technical expertise by collaborating with Tyson Foods to provide innovative and diversified product offerings to a broader base of customers in the Kingdom and abroad.”