Ukraine’s largest poultry processor, MHP, has signed a shareholder agreement with Desert Hills Veterinary Services Company Limited (DHV), a subsidiary of Tanmiah Food Company, a Saudi-based food manufacturer, to invest in a joint venture in Saudi Arabia.
This partnership will see DHV and MHP join forces to invest more than SAR200 million (US$53.3 m) in farming operations with the capacity of more than 1 million parent stock expected to produce approximately 175 million hatching eggs annually a state-of-the-art hatchery and a poultry feed mill, MHP said in a statement on 8 September.
DHV will hold a 55% stake, while MHP a 45% stake in the joint venture.
This partnership is set to further develop MHP’s diversification and growth internationally as well as boost food security and self-sufficiency in poultry products in Saudi Arabia, MHP added.
Dr John Rich, executive chair of the board of MHP, said that new agreement laid a foundation for the MHP’s further development in Saudi Arabia.
“We are committed to a long-term, fruitful relationship that will benefit our organisations and the entire Kingdom of Saudi Arabia and the region. We will continue pursuing strategic opportunities in the region, seeking to capitalise on our expertise,” Rich said.
MHP business has been severely impacted by the Russian invasion of Ukraine, the company said in its annual report. MHP sustained a net loss of US$231 million in 2022 against a net profit of US$393 million in the previous year. After the initial slump, the company saw its exports bouncing back closer to the end of 2022, resulting in improved financial performance.
MHP also emphasised that all necessary approvals, including clearance from the General Authority for Competition of Saudi Arabia and other relevant jurisdictions, have been secured.
Ahmed Bin Sharaf Osilan, managing director of Tanmiah Food Company, in turn, praised the importance of the new operations for Saudi Arabia’s food security. He commented: “As we are working towards boosting food security and self-reliance in Saudi Arabia, we are building facilities that are critical in the entire poultry ecosystem in Saudi Arabia, increasing non-oil GDP private sector contribution, local employment opportunities, and knowledge transfer.”
Tanmiah operates 114 farms as well as 6 hatcheries, 2 feed mills, and 4 primary processing plants, selling its production in UAE, Bahrain, Oman, Jordan, and Kuwait.