Baladna Food Industries (BFI) is increasingly tapping the Horeca (hotels, restaurants and cafe) sector, including airlines, as part of expanding its revenue, in view of saturation in the retail segment with more than 90% market share.
Most of BFI’s revenues are in retail markets and therefore the Horeca market presents a large opportunity, and BFI, as a new market entrant, did not have substantial Horeca accounts prior to 2019, said the initial public offering (IPO) prospectus of Baladna, a yet-to-be established holding arm of BFI.
Stressing that in 2019 BFI increased its sales channels from almost purely retail channels to include Horeca channels, including airlines, it said "the Horeca market presents an opportunity for BFI to increase its revenues domestically."
On the basis of developments in the fiscal period ended June 30, 2019, the founders and senior management currently expect higher revenue growth to be in the range of 150-170% for the fiscal year ending December 31, 2019, compared to the fiscal year ended December 31, 2018.
In the medium term, the company currently targets annual comparable revenue growth of 20-30% and 3-10% for fiscal year 2020 and fiscal year 2021, respectively, for BFI, driven primarily by the planned launch of new products lines, segments and expansions into new markets.
BFI’s share of the non-retail market (the Horeca market, which comprises hotels, restaurants, and catering) has steadily increased from 2017, the prospectus said, adding BFI will continue to increase its Horeca revenues.
"Throughout early 2019, BFI has been expanding its distribution to Horeca clients (including, among others, fast-food chains and hospitals) and expects to cater to up to 3,000 individual outlets by the end of 2019," it added.
Horeca segment comprises about 30% of the total market, with caterers accounting for the largest share due to the high number of labour camps in Qatar, which is extremely "price sensitive".
Seeking to significantly expand and diversify its product offering, BFI said development of the infrastructure on the dairy farm has allowed for a sizeable yet natural increase in the number of cows, and the completed dairy processing plant will increase the production capacity and range of available products.
The initiatives would also result in higher yield of milk per cow, leading to direct improvement in costs and competitiveness, allowing the (proposed holding) company to support BFI as the primary dairy producer in Qatar.
Baladna has identified synergistic benefits that it envisages BFI will enjoy by moving from being a dairy company to a dairy and beverage company, through, among other things, juice production at BFI’s current facilities and further developing the existing packaging plant and water treatment facilities within BFI’s operations.
Stressing that in 2019 BFI increased its sales channels from almost purely retail channels to include Horeca channels, including airlines, it said "the Horeca market presents an opportunity for BFI to increase its revenues domestically."
On the basis of developments in the fiscal period ended June 30, 2019, the founders and senior management currently expect higher revenue growth to be in the range of 150-170% for the fiscal year ending December 31, 2019, compared to the fiscal year ended December 31, 2018.
In the medium term, the company currently targets annual comparable revenue growth of 20-30% and 3-10% for fiscal year 2020 and fiscal year 2021, respectively, for BFI, driven primarily by the planned launch of new products lines, segments and expansions into new markets.
BFI’s share of the non-retail market (the Horeca market, which comprises hotels, restaurants, and catering) has steadily increased from 2017, the prospectus said, adding BFI will continue to increase its Horeca revenues.
"Throughout early 2019, BFI has been expanding its distribution to Horeca clients (including, among others, fast-food chains and hospitals) and expects to cater to up to 3,000 individual outlets by the end of 2019," it added.
Horeca segment comprises about 30% of the total market, with caterers accounting for the largest share due to the high number of labour camps in Qatar, which is extremely "price sensitive".
Seeking to significantly expand and diversify its product offering, BFI said development of the infrastructure on the dairy farm has allowed for a sizeable yet natural increase in the number of cows, and the completed dairy processing plant will increase the production capacity and range of available products.
The initiatives would also result in higher yield of milk per cow, leading to direct improvement in costs and competitiveness, allowing the (proposed holding) company to support BFI as the primary dairy producer in Qatar.
Baladna has identified synergistic benefits that it envisages BFI will enjoy by moving from being a dairy company to a dairy and beverage company, through, among other things, juice production at BFI’s current facilities and further developing the existing packaging plant and water treatment facilities within BFI’s operations.
