Seeds for the future

Seeds for the future

When Saleh Hefni joined Halwani Bros in 2007, he had three strategic objectives as CEO of the Saudi Arabian food producer. “First was to take the company into the stock market and we were able to do so in 2008. The second objective was to build a state-of-the-art manufacturing facility, which we started in 2009 and we're wrapping up right now to move to the new site. The third objective was to increase revenue to two billion Saudi riyal by 2013, with a mixture of organic growth and acquisition.”

And although Hefni has achieved much of what he set out to do, he recognises that there is much more in store for Halwani Bros, a company that started as a family business almost 60 years ago. “Objectives and goals are always changing, the minute you achieve one you look at something else. Now we are looking at what will be next – the new generation of Halwani, the new products that can attract the new generation,” he says.

As the name suggests, Halwani Bros was started as a business by four brothers and has evolved so that it is now a publically listed company – 30 percent owned by the public and 70 percent divided between the Halwani family (15 percent) and Aseer Co. (55 percent) partially owned by the Dallah Group. It is market leader for a huge range of nearly 350 products among six categories – meats, pastries (maamoul), jam, tahini, halawa (a sweet product made out of sesame seeds) and the final category is olives, olive oil, sauces. It also offers cheese, juices and ice cream. Hefni says: “Currently 80 percent of our business is in the local market and 20 percent is exported. Yemen, GCC and Egypt are our largest export markets. We export the maamoul, the halawa and the tahini, but the meat products we basically sell only in the local market.”

Hefni explains that with the addition of the new manufacturing facilities, Halwani Bros will be able to significantly increase these exports. He says: “One of the nice problems we had in the past six or seven years is that we were running at the maximum capacities in our manufacturing facilities and we did not really have a way to increase so we could export more into the international market.” These constraints will be history on the opening of the new factories. “We have been building nine state-of-the-art factories and the final two will be operating soon. This will give us extra capacity to open up more international markets such as the US, Europe, Canada and the Far East. By having that extra capacity we will be able to penetrate strongly into the international market and increase our sales,” Hefni says. 

The company has invested 350 million Saudi riyal (over 100 million USD) in the new facilities, ensuring they are leaders in their field. “It's an industrial complex, not just one factory. There is a state-of-the-art firefighting system. New technology in terms of equipment processes and machineries, storage facilities, utilities and support of the utilities. The whole site has been run into a very high international standard and has been designed by an Irish company specialised in food manufacturing design, with excellent project management experience.” To find the right partner for this project Halwani Bros thoroughly researched potential companies. Hefni adds: “We scanned the market and looked at companies that had previous experience in designing and building food manufacturing facilities around the world. We hand-picked the best contractors to do the work.”

Halwani Bros has two manufacturing locations – one in Saudi Arabia that consists of nine factories and one in Egypt with five factories, with a combined total of around 2,700 staff. And sourcing the right staff can be challenging, Hefni says. “Finding talent these days is becoming difficult in our region and it's not because of salaries. What we are doing right now is, of course, looking at the market, the wages, the benefits and the work environment we provide. We look at the training and development, the horizontal integration and the vertical promotions of staff, and we put it all in together to try to give the best market package. We give them a future plan to grow within in the company within the next five to ten years. This approach opens up opportunities for us to find talent.”

A consistently high quality of product is guaranteed by the Halwani Bros’ name and this is partly achieved by its supply chain, which includes many long-standing relationships that have been built up over the years. “Our supply of main raw materials is very important. We import our meat from Brazil and Argentina and some of our dairy and cheese products come from New Zealand. Sesame is a major part of our raw material that we import from Sudan.” In the past few years, says Hefni, the market has seen new, inferior products arrive on the scene. “Halwani Bros always maintains high quality, regardless of the drop of the margin. Regardless of a cost increase in raw materials, we always maintain the high quality of our products in the market.”

He believes the secret to maintaining this high quality is a combination of the company’s culture, choosing the best raw materials and its manufacturing process. “We have our own processes and technical know-how that we have built over the years. We utilise this to make sure we continue introducing the best quality products.” To highlight this, Halwani Bros has both ISO 9001 and HACCP accreditation, which is vital for exports.

To make sure it stays on top of the game, Halwani Bros attends several global exhibitions every year, including Gulfood, London’s International Food and Drink Event and Anuga. “Trade conferenes are extremely important for us. We look at new products, new technologies and new equipments that are available in the market. We try to benchmark ourselves against other companies to see how far we are from getting there or to see if we are on top of certain issues. It is very important that we meet our suppliers at these events and we look at diversity in our suppliers as well,” says Hefni, adding that connecting with clients is also key. “We always meet with them and try to understand their needs and wants. And trying to understand the business cycles because whatever is affecting their business will always affect our business and vice versa.”

So, as Halwani Bros approaches its 60th birthday, Hefni is confident a period of growth lies ahead. “We see that the company can grow heavily in the next five years due to our investment in increasing capacity. If you look at the history for the past five years, we were able to increase our sales from 350 million Saudi riyal into nearly 1.2 billion Saudi riyal, which has been done by increasing sales and widening our portfolio. We believe this process can continue. We will also look at companies in the market that we can acquire that can increase our portfolio and increase our sales.”