July 11, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Tyson Foods and Saudi Arabia’s Tanmiah Food Co.(Tanmiah) have announced a deal that will see the Arkansas-based food giant expand its presence in the Middle East protein space. 

Tanmiah’s history goes back to 1962. As part of the Al-Dabbagh Holding Group, the company is one of the leading suppliers of fresh and processed poultry, animal feed, health products, and other meat products through a fully integrated business model selling across Saudi Arabia, the UAE, Bahrain, Lebanon, Oman, Jordan, and Kuwait.

The company currently operates 93 farms, six hatcheries, two feed mills, four slaughterhouses, three food processing plants, and 13 dry and cold storage facilities in Saudi Arabia, Bahrain, and the UAE. 

Under the terms of the agreement, Tyson will acquire a 15 percent stake in Tanmiah subsidiary Agriculture Development Company (ADC), and a 60 percent stake in subsidiary Supreme Foods Processing Company through a deal valued at $70 million. 

“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, 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.”

ADC is a fully integrated poultry company operating hatcheries and feed mills, producing broiler chickens that are sold under the Tanmiah brand to retailers and food service customers.

Supreme Foods produces a range of value-added and cooked chicken items, as well as beef products, with a distribution network spanning the Middle East including Saudi Arabia, Kuwait, Bahrain, UAE, Oman, Lebanon, Jordan, and beyond. 

“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, 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. Sun added, “The agreement will also see Tyson Foods and Tanmiah unlock long-term opportunities in the growing Halal food market.”

Between 2021-2026, the halal food market in the Middle East and Africa is expected to post a CAGR of 5.81 percent, while the global halal food market is expected to see a CAGR of 4.5 percent in terms of revenue, to reach a value of US$1.57 billion by 2026.

The promise for growth within the market has attracted the world’s leading food companies – a trend reflected earlier this year when JBS SA, the largest provider of meat in the world, acquired two plants in the MENA region and announced it had appointed a new head of business for the region. 

As part of Tyson’s partnership with Tanmiah, the two companies have agreed to invest to expand the processing capacity at Supreme Foods. This move aligns with Tanmiah’s strategic expansion plan, and when completed, will result in a doubling of production in further processed products. It also will also for the introduction of new complementary products to the market, enhancing and diversifying Supreme Foods’ portfolio.

Ahmed Bin Sharaf Osilan, executive board member & managing director with Tanmiah, commented, “We are excited about the substantial synergies that we expect this transaction will enable us to realize across all stages of the supply chain from sourcing of materials to production and final distribution, in addition to supply chain efficiencies and improved margins.”

Alongside the significant opportunities that will be unlocked for the company in the future,” continued Bin Sarah Osilan, “we remain dedicated to our pioneering role in supporting Saudi Arabia’s food security and self-sufficiency goals. We are also looking forward to further advancing our technical expertise by collaborating with Tyson Foods to extend innovative and diversified product offerings to a broader base of customers in the Kingdom and abroad.”

Last year, Tyson Foods’ sales from international business and exports accounted for 14 percent of total company sales for fiscal year 2021, and this deal will serve to support its expansion strategy for value-added capacity for its international business.

Looking ahead, global protein consumption is projected to increase by nearly 95 billion pounds over the next 10 years – with much of that increase happening in overseas markets. To meet this demand, the company expects to open seven new plants for fully cooked products outside of the U.S. over the next two years, with six in Asia and one in Europe.

“We are ready to embark on this new phase with Tyson Foods, whose commitment to animal welfare, food safety, sustainability, and efficiency, are very much in line with our own business model and sustainability framework,” noted Zulfiqar Hamadani, CEO, Tanmiah. “This transaction will not only reinforce our positioning in the domestic market but will also enable us to expand our global footprint through leveraging Tyson Foods’ long-standing relationships with customers worldwide.”

~ Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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