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Tanmiah

Tanmiah Food Company plans capacity expansion

RIYADH, August 4, 2021

Tanmiah Food Company, a leader in the manufacturing and distribution of food and agricultural products, has aggressive expansion plans to invest over SR700 million ($186.67 million) between 2021 and 2023 to increase its poultry capacity. 
 
According to Al Rajhi Capital Research, this provides strong revenue visibility in medium to longer term as the company operates in a defensive sector with increasing growth opportunities led by young demographics, eating out culture and increasing number of regional and international QSRs (quick service restaurants) in the kingdom. 
 
“We like Tanmiah as the company has strong return metrics (ROCE ~19% 2020) with sufficient reinvestment opportunities at such higher ROCE. We initiate coverage on Tanmiah foods with a trading price of SR87/share,” Al Rajhi said.
 
Tanmiah food is one of the leading integrated poultry manufacturers in the kingdom with a production capacity of 360,000 birds per day. 
 
The company has three main segments poultry, food processing and feeds and veterinary segment. Its moat is its asset light business model, which is easily scalable; the company leases most of its farms, which enables it to allocate capital to most profitable avenues thus enhancing stakeholder’s wealth. 
 
In recent years, the domestic poultry manufacturers have been benefitting as the tariffs on imported poultry has increased while local players have been getting subsidy. 
 
Al Rajhi expects the shift of market share from imported poultry to local players to increase as domestic players increase their capacity.-- TradeArabia News Service
 



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