October 27, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Earlier this month, Saudi Arabia’s Public Investment Fund (PIF) announced the launch of Halal Products Development Company (HPDC) with the intent of using the subsidiary to invest in and strengthen domestic halal food production.

It is this subsidiary that has just announced a joint venture with Brazilian global meat company BRF for the development of a halal chicken supply chain in the kingdom that will provide fresh, frozen, and processed products, and will  ultimately foster innovation and growth across the Halal ecosystem.

The combined capital investment behind the venture is $500 million, and once operating, BRF will own a 70 percent majority stake in the enterprise. Of the total capital investment, $125 million will be contributed by the partners upon incorporation of the venture company, with the remainder contributed pursuant to the investment plan agreed to by the two parties. 

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. Likewise, global protein consumption is projected to increase by nearly 95 billion pounds over the next 10 years.

The promise for growth within the halal market has attracted the world’s leading food companies – and the race is on to gain recognition and market share. 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 in April of this year. 

Not to be outdone, Tyson Foods also made definitive moves in the MENA halal market. In July of this year, Tyson joined forces with Saudi Arabia’s Tanmiah Food Co.(Tanmiah) in a deal that would 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. 

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.

At the time, Tan Sun, president of Tyson Foods APAC, commented, “The strategic partnership is expected to accelerate Tyson Foods’ and Tanmiah’s growth and generate significant value in the short and long term.”

~ Lynda Kiernan-Stone is editor in chief 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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