Tanmiah Food Company, a Saudi Arabian poultry, and other meat products company, today signed a Memorandum of Understanding with MHP, Europe’s leading poultry producer. The agreement is the first step in the establishment of a joint venture between Tanmiah’s wholly owned subsidiary, Desert Hills for Veterinary Services Company Ltd, and MHP SE (LSE: MHPC, ‘MHP’), the parent company of the leading international food and agribusiness group headquartered in Ukraine.
Supported by the Government of Saudi Arabia and in line with the food security objectives of Saudi Vision 2030, the MoU sets out the principles for the establishment of a joint venture to accelerate efforts to address the existing production gap in the domestic poultry sector in KSA.
The JV will focus on the development and operation of poultry breeding facilities, including the establishment of a greenfield hatchery in Saudi Arabia with an annual hatching capacity of 108 million eggs. It will also invest in feed milling facilities with a target to produce 137,000 tonnes of feed per year.
The initiatives will be primarily funded by the Agriculture Development Fund of Saudi Arabia. MHP will provide a broad range of industry expertise across the value chain to capture long-term opportunities and design world-class facilities that are fully adapted to local market conditions.
The formation of the joint venture is subject to the necessary regulatory approvals, including the approval of the General Authority for Competition of Saudi Arabia and other applicable approvals.
Zulfiqar Hamadani, CEO of Tanmiah, said: “The new partnership with MHP is another important step that demonstrates our determination to contribute to KSA’s self-sufficiency in poultry while reinforcing our pioneering role in supporting the Kingdom’s food security and self-sufficiency goals. In addition, as Europe’s largest poultry producer, MHP brings a wealth of industry expertise that will enhance Tanmiah’s production capabilities and efficiencies, while supporting our sustainability agenda”.
Dr. John Rich, Executive Chairman of MHP SE, added: “This agreement represents an important milestone in MHP’s international strategy. I am confident that Tanmiah’s excellent operational track record, combined with MHP’s industry-leading poultry expertise, can deliver transformational results for the Kingdom as it strives to achieve the food security goals of its 2030 Vision. The continued deepening of MHP’s relationship with Saudi Arabia is an important part of our long-term commitment to the region, and we continue to look for opportunities to make the best use of our expertise to improve food security around the world. The agreement also brings the people of Saudi Arabia and Ukraine closer together.
Tanmiah is on track to achieve its ambitious growth plans, which include expanding its production capacity for fresh poultry and processed products and developing new and innovative products and services to meet the changing demands of local and international consumers.
Ahmed Bin Sharaf Osilan, Executive Board Member & Managing Director of Tanmiah, commented: “Our Feed and Animal Health segment has delivered solid results over the past few quarters and we have ambitious plans to further grow this business and create sustainable long-term value for all our stakeholders, including our shareholders. The significant investment in this joint venture will result in an expansion of our overall capacity while supporting local job creation and delivering on the Kingdom’s strategic vision for our sector.”
The signing ceremony took place on 16 February 2023 in Riyadh at the offices of the Ministry of Environment, Water, and Agriculture. The event was also attended by representatives from the Kingdom of Saudi Arabia’s Ministries of Investment and Commerce, the Saudi Food and Drug Authority, the Agricultural Development Fund, and the Saudi Investment Recycling Company.
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