Saudi Arabia's Almunajem Foods Co. and Balady Poultry have entered into a seven-year agreement for processing and distribution. The partnership was disclosed through stock exchange announcements from both companies.
Under the arrangement, Balady Poultry will produce and package poultry products under both companies' brands. These items will be supplied within Saudi Arabia and to international markets. A profit-sharing model governs the deal.
Almunajem Foods will manage marketing and distribution activities. The company stated that no specific financial value has been determined for the agreement.
Thamer Abdulaziz Abanumay, managing director of Almunajem Foods, holds an indirect interest in the agreement due to his position as vice chairman of Balady Poultry's board. Abdullah Omar Bawazir, an Almunajem board member, also has a similar interest in Balady Poultry.
In November, Almunajem Foods announced that Bin Abdulaziz Abanumay had resigned as CEO, effective December 31, after leading the company for eight years. He remains a board member. Ali Hasan El Zain was appointed as the new CEO starting January 1.
The companies described the partnership's purpose. "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 said. "This partnership reflects strategic integration between the producer, Balady Poultry Company, and the marketer and distributor, Almunajem Foods Company, in order to achieve mutual objectives in the poultry sector."
Almunajem Foods reported its third-quarter and nine-month results in November. Revenue for the quarter ending September 30 increased 2.2% to SR816.1 million ($217.6 million). Operating profit fell 5.2% to SR36.4 million, and net profit dropped 21.7% to SR31.7 million. The revenue rise was attributed to higher sales volumes despite lower average selling prices.
For the first nine months of the year, revenue decreased 0.5% to SR2.51 billion. Operating profit declined 46% to SR118.3 million, and net profit was down 52% at SR102.7 million.
Almunajem Foods supplies chicken, turkey, duck, and quail, owning the Dari brand. Balady Poultry produces and markets its namesake chicken brand.
Balady Poultry also released results for the same periods in November. Third-quarter revenue edged up 0.5% to SR218.9 million. Year-to-date revenue fell 4.9% to SR634.1 million.
Operating profit dropped 67% for the quarter and 72% over nine months, reaching SR9.1 million and SR26.2 million, respectively. Net profit declined 74% for both reporting periods, to SR7.4 million and SR25.4 million.