Al-Hazaa strengthens its footprint in the Middle East (Miller Magazine)
“With the acquisition of Egyptian Millers Flour Mill, Al-Hazaa will expand its milling capacity and increase its market share in Egypt. We also aim to renew and expand the great company, the Egyptian Millers, and maintain its name, history and prestigious position in the Egyptian market. Our vision is to lead the industry and become one of the best-performing companies in the Middle East through generating sustainable growth businesses.”
Al-Hazaa Investment Group
Al-Hazaa Investment Group expands its business to become one of the strongest investment groups in the Middle East. Despite the economic crisis caused by the Covid-19 pandemic, Al-Hazaa continues to extend its presence with new investments. After acquiring a strategic flour mill in Al-Fujairah, UAE, the group now acquired the Egyptian Millers Flour Mill, located in 6th of October city in Egypt. The mill was established in 1993, as one of the first private sector flour mills in Egypt as soon as the government allowed the establishment of mills. Egyptian Millers has a total production capacity of 500 ton/ day and a storage capacity of 20,000 tons. With this acquisition, Al-Hazaa expands its milling capacity in Egypt from 1,280 tons per day to 1,780 tons per day to become one of the big players in the Egyptian milling industry that manages one of the largest milling capacities in the country.
In an exclusive interview to Miller Magazine, Mr. Omar Al-Hazaa, General Manager at Al-Hazaa Investment Group, underlines that the acquisition will increase the production capacity of the Group’s mills in Egypt after the increased demand it has faced for its products lately. “Now we started in collaboration with Bühler AG to update the production lines in the Egyptian Millers and increase its production capacity to meet the standards that Al-Hazaa Group follows in all its mills,” he says.
Mr. Omar, could you please provide us with some brief background information on your company?
Al-Hazaa Investment Group is a family business that was established in 1942 in Iraq. The founder Sharif Al-Hazaa built the first flour mill in his hometown Tikrit, then several industrial activities took place not only in Iraq but also in Jordan, Egypt and UAE, making Al-Hazaa Investment Group one of the largest investment groups in the Middle East. Today the Group has expanded into a diverse organization with business activities in various sectors including, flour milling, feed milling, pasta and noodles production, plastic production, renewable energy, banking and project management and implementation.
The Al-Hazaa Group is a leading milling company in Egypt and the Middle East. What kind of role does Al Hazaa in its sector?
Milling is the first field that Al-Hazaa Group entered, through establishing Al-Rafidain Mills in Iraq, it is a vital field for every country as it offers flour, which is the key factor to many food staples. Our role lies in supplying the country and its neighboring markets with their needs of high-quality products, in innovating new blends and mixes that will cover the various and changing needs of bakers and in ensuring the provision of this important product all year round despite any challenges.
Al-Hazaa Investment Group aims to build integrated projects that contribute to the development of the industrial field. We have business activities in various fields but each field is somehow connected to the other, we are our own suppliers, for instance, our plastic factory, the New Plastic Industrial Co. supplies all our flour and feed mills in the Middle East with their needs of plastic polyproline bags. Moreover, Al-Hazaa company for Renewable Energy covers all electrical needs of all facilities owned by Al-Hazaa Group in Jordan using clean solar energy. Our vision is to lead the industry and become one of the best-performing companies in the Middle East through generating sustainable growth businesses.
UPGRADING WITH BUHLER EQUIPMENT
Recently, Al-Hazaa Investment Group has acquired the Egyptian Millers Flour Mill. Could you give us detailed information about this acquisition? Where is the facility? What is the production capacity of the facility?
In the beginning of 2021, Al-Hazaa Investment Group decided to expand its milling capacity in the Egyptian market and acquire 75% of the Egyptian Millers Flour Mill’s shares, due to the high demand for flour in the Egyptian market and its strategic location in Africa. The Egyptian Millers is located 6th of October city in Egypt, in the same industrial area where other mills of Al-Hazaa are located.
Now we started in collaboration with Bühler AG to update the production lines in the Egyptian Millers and increase its production capacity to meet the standards that Al-Hazaa Group follows in all its mills.
How will the acquisition affect your place in the market? What is your goal with this acquisition? How will this decision benefit you?
Al-Hazaa already has a strong position in the Egyptian market through its other mills, Crown Flour Mills. With this acquisition, Al-Hazaa will expand its milling capacity and increase its market share in Egypt. We also aim to renew and expand the great company, the Egyptian Millers, and maintain its name, history and prestigious position in the Egyptian market.
Since the establishment of Crown Flour Mills in 2005, Al-Hazaa succeeded in offering high-quality products that are trusted by customers which lead today to a great demand for our flour not only in the Egyptian market but also in neighboring markets such as Syria, Palestine, Somalia, Yemen, Madagascar, etc, as 15% of our daily production capacity of flour in Egypt’s mills is allocated for exports.
So, with this acquisition, we are hoping to further strengthen our footprint in the region in the field of flour production, and enable our mills in Egypt to easily serve several different sectors and customers including bakers, factories, retail, etc. Especially that we have very good relations with key players in the bakery and food industries in Egypt and the region. We sell our flour to Edita Food Industries, Mars, Nestle, Kellogg’s, Bisco Misr, Mass Food and the World Food Programme.
Last year, you also acquired a new flour mill in Al-Fujairah, UAE. The acquisition is a key factor in your growth and strength in the region. Is there any acquisition plan in the future?
Yes, we always evaluate the market and look for expanding opportunities either by establishing new projects or acquiring existing ones. Strategic growth is a key factor in the success of any business and we put big efforts into it.
FOCUS ON SUSTAINABLE GROWTH
How many mills and plants do you have all over the region and where are they located? Can you give us some information about your total milling capacity?
Al-Hazaa Investment Group operates 12 milling facilities in four countries in the Middle East, in Iraq, Jordan, Egypt and UAE. The Group has a total daily flour production capacity of more than 4,000 tonnes.
Along with flour mills, Al-Hazaa Group also owns storage silos for grain trading, animal feed mills, maize mill, plastic factory, pasta and instant noodles production lines, and a solar power plant across the Middle East.
What are your future targets in your operating market?
Our vision as mentioned above is to lead the industry and become one of the best-performing companies in the Middle East through generating sustainable growth businesses. We aim to expand our businesses and always be a trustworthy partner for our customers, and continuously innovate new products and professional services while meeting our obligations to our society and the environment. We hope to become an integrated industrial network, in which our operations are reliable and have value to society.
Do you have any plans to expand your business outside the Middle East?
In the meantime, no. But we will eventually reach this position someday.
How has the Covid-19 pandemic affected you and the Egyptian milling industry?
The COVID-19 crisis was not easy for any sector, especially for the food sector and flour production. The flour market witnessed an unprecedented high demand during the crisis. As soon as the lockdown was announced in many countries worldwide, people rushed to markets to buy large quantities of flour and also supermarkets and bakeries announced unexpected requests for flour. But luckily and thanks to the great efforts that our employees have shown, we were able to serve the Egyptian market during the crisis and cover the huge needs of flour and meet all the needs of our customers, we ensured the continuous provision of our supply chain. We are proud to be part of the system that provided food during this difficult period.
Our state-of-the-art machines and our partner Buhler helped us to operate some of the milling equipment remotely, which helped in reducing the number of workers per shift and having less crowding at work. We also created an application for ordering flour online and remotely.
The Covid-19 pandemic has triggered health and wellness spending all over the world. Is there any change in food trends in Egypt and the region due to the pandemic?
The new situation caused a state of alert and people rushed to supermarkets to stock food supplies, people were afraid of not having enough quantities of necessary food supplies so they were stockpiling and storing more at home. But over time things were getting stabilized and food became available as normal, yet we noticed that there is a new tendency for people to buy small packages of flour more than before, maybe because people got used to baking and cooking at home more than usual after the pandemic.
EGYPT: A PROMISING FLOUR MARKET
Could you give some information on the Egyptian flour milling industry? What are the major challenges for the Egyptian millers today?
The Egyptian market is an enormous market and very promising market. There are great opportunities to invest in this sector due to the continuous population growth. The most important challenge that we face is the provision of sufficient wheat quantities for our operations and also the impact of the Egyptian currency and difference in the exchange rate and its impact on prices.
What are your expectations from the machinery and technology supplier for the milling industry? In which areas do you need innovative solutions?
Since we are Buhler’s agents in the Iraqi markets, we have signed together several contracts in Iraq, we consider ourselves partners and this helped us a lot because of the continuous support that we receive from Buhler. Through Buhler Group we follow up with market trends and we keep up with any new technology in the milling industry, and we receive training opportunities at their training centers.
A very important topic now for the milling industry and the food sector, in general, is the food hygiene that is achieved by implying hygienic standards at the workplace but also for machinery and equipment, which Buhler is doing a great job at, by creating a special design that ensures food safety but also increases productivity by reducing cleaning and changeover time and the need for maintenance.
How is Egypt’s wheat production outlook for this year?
Egypt is a large producer of wheat and at the same time, it is a very large consumer and importer of wheat. This year’s production is expected to be excellent; the quantity of local wheat production is expected to reach 9 million tons for the year 2021/ 2022, compared to 8.900 million tons in the previous year. It is expected that in the coming years, local wheat production will increase even more because of the huge investments made by the government and the tremendous efforts Egypt is making to reclaim agricultural lands and prepare them for wheat agriculture.
Is there anything you want to add?
We are the third generation of the Al-Hazaa family that are involved in the milling field and are currently helping other family members from the fourth generation to enter this sector too and continue Al-Hazaa legacy, and we hope that the journey will continue and that Al-Hazaa Investment Group will provide an important role for future generations in the field of milling and the food production industry.
Timeline for the important activities that happened through Al-Hazaa history:
1942: The Group’s establishment in Iraq with its first Flour mill, Al-Rafidain Mill
1997: Entering the Jordanian market through South Amman Mills
2005: Entering the Egyptian market through Al-Taj Mills
2006: Entering animal feed production sector through the Global Feed Mill in Jordan
2006: Establishing a plastic factory called the New Plastic Industrial Co. 2010: Entering the Emirati market through Al-Ain Mill
2014: Establishing Al-Jadeda Pasta Factory in Jordan
2016: Establishing the first and only noodles factory in Jordan, Halloumi Foods Co.
2016: Establishing the first and only maize mill in Jordan, Al-Hasad Maize Mill
2017: Entering the renewable energy sector through Al-Hazaa Company for Renewable Energy
2021: Al-Hazaa Acquires Egyptian Millers Flour Mill in 6th of October city, Egypt and expands its milling production capacity in the country to 1,780 tons per day.