MHP intends to set JV with Tanmiah Food Company to increase chicken production in KSA

KYIV. Feb 16 (Interfax-Ukraine) – MHP agricultural holding, the largest poultry producer in Ukraine, plans to establish a joint venture (JV) with Desert Hills for Veterinary Services Company, a subsidiary of Tanmiah Food Company, the market leader in the Kingdom of Saudi Arabia (KSA) for production of poultry and other meat products.

According to MHP on the Warsaw Stock Exchange on Thursday, the parties signed a memorandum of understanding on February 16, which will be the first step towards the creation of a joint venture.

“With the support of the Saudi government and in line with the Saudi Arabia Vision 2030 food security goals, the memorandum sets out the principles for establishing a joint venture to accelerate efforts to address the existing production gap in the KSA poultry industry,” MHP said in a statement.

It is clarified that the focus of the future enterprise will be on the development and operation of poultry enterprises, including the creation of a new hatchery in Saudi Arabia to hatch 108 million hatching eggs per year. It will also invest in feed mills to produce 137,000 tonтуs of feed per year.

According to the MHP, the initiatives will be mainly funded by the Saudi Arabian Agricultural Development Fund. The Ukrainian holding intends to provide a wide range of industry knowledge along the entire chicken value chain in order to seize long-term opportunities and design best-in-class facilities that are fully adapted to local market conditions.

At the same time, it is indicated that the establishment of a joint venture still requires the necessary regulatory approvals, including the approval of the Saudi Arabian General Authority for Competition and other relevant permits.

According to the MHP, the memorandum was signed on February 16, 2023 in Riyadh at the office of the KSA Ministry of Environment, Water Resources and Agriculture. The meeting was also attended by representatives of the KSA Ministry of Investment and Trade, the Food and Drug Authority, the Country Development Fund and the Saudi Investment Recycling Company.

The holding recalled that Tanmiah Food Company is one of the leading suppliers of fresh and processed poultry meat, other meat products, as well as animal feed and health products in the Middle East. It is a public company listed on the Saudi Stock Exchange. Tanmiah’s business model includes production, processing and distribution of products sold in Saudi Arabia, the UAE, Bahrain, Oman, Jordan and Kuwait. As of December 31, 2022, Tanmiah operates 108 farms as well as six hatcheries, two feed mills and four slaughterhouses.

MHP is the largest chicken producer in Ukraine. It is also engaged in production of cereals, sunflower oil, and meat processing products. On the European market, MHP supplies chilled half-carcasses of chickens, which are processed, including at its enterprises in the Netherlands and Slovakia. In February 2019, the agricultural holding completed the acquisition of the Slovenian company Perutnina Ptuj.