United Foods Company (PJSC) Market Research Report

Background

Established in 1976 by the decree of H.H. Sheikh Rashid Al Maktoum, United Foods Company (PJSC) (UFC) has been a pioneer in the Gulf region's edible oils and fats industry. The company is renowned for introducing the first branded ghee in consumer packs to the region, solidifying its reputation for quality and innovation. UFC's mission is to provide premium-quality food products that cater to the evolving health and nutritional needs of consumers. Over the past four decades, UFC has expanded its product portfolio to include vegetable ghee, cooking oils, margarine, butter, and other fat products, serving markets across the United Arab Emirates (UAE), the Gulf Cooperation Council (GCC), and internationally.

Key Strategic Focus

UFC's strategic focus centers on delivering healthier food options by offering products that are 100% trans-fat-free and nutritionally rich. The company emphasizes continuous innovation, as evidenced by the introduction of olive oil-based vegan margarine and high-quality tahina. UFC targets both domestic and international markets, with a particular emphasis on strengthening its presence in the UAE. The company leverages advanced manufacturing technologies to enhance product quality and operational efficiency, ensuring it meets the dynamic demands of health-conscious consumers.

Financials and Funding

As of December 31, 2024, UFC reported annual revenue of AED 577.21 million, marking a 2.11% increase from the previous year. Net income for the same period was AED 30.84 million, reflecting an 11.19% growth. The company's market capitalization stands at approximately AED 361.49 million, with a Price-to-Earnings (P/E) ratio of 11.7x, which is below the UAE market average of 13.3x. UFC's dividend yield is 8.37%, though it is noted that the dividend is not well covered by earnings or free cash flows.

Pipeline Development

UFC continues to diversify its product offerings to meet consumer preferences. Recent innovations include the launch of olive oil-based vegan margarine and high-quality tahina. The company has also revisited its ghee, shortening, and margarine recipes to ensure they are 100% trans-fat-free, aligning with global health standards. These developments are part of UFC's ongoing efforts to provide healthier food options and expand its market reach.

Technological Platform and Innovation

UFC employs advanced manufacturing technologies to enhance product quality and operational efficiency. The company operates the oldest refinery in the region, located in Al Quoz, Dubai, and a modern factory in Jebel Ali, Dubai, established in 2005. These facilities enable UFC to maintain high standards in the production of ghee, edible oils, butter, and margarine. The company also utilizes IT-driven technologies to improve supply chain management, product safety, and quality consistency.

Leadership Team

Fethi Mohamed Khiari Bouaziz serves as the Chief Executive Officer (CEO) of UFC. With over a decade of leadership at UFC, Mr. Khiari has been instrumental in driving the company's growth and innovation. His extensive experience in the food industry includes previous roles at Nestlé and Chupa Chups, where he managed operations across various international markets. Under his leadership, UFC has focused on product innovation, quality enhancement, and market expansion.

Competitor Profile

Market Insights and Dynamics

The edible oils and fats industry in the GCC region is characterized by increasing consumer demand for healthier and high-quality food products. The market is competitive, with several key players striving to capture market share through product innovation and strategic expansion.

Competitor Analysis

Key competitors in the region include:

Unikai Foods (P.J.S.C): Engages in the production and distribution of dairy products, juices, ice cream, and other food items.

Agthia Group PJSC: A leading food and beverage company offering a diverse product portfolio, including bottled water, flour, and animal feed.

Apetit Oyj: A Finnish company specializing in food products, particularly frozen foods and vegetable oils.

C.I. Holdings Berhad: A Malaysian investment holding company involved in the manufacturing and distribution of edible oils and related products.

These competitors focus on various segments within the food and beverage industry, leveraging their unique strengths to cater to consumer demands.

Strategic Collaborations and Partnerships

UFC has established a robust distribution network that handles both its manufactured products and third-party brands, enhancing its market presence. The company is part of the Al Owais family business group, one of the pioneer Emirati business groups, which provides strategic support and resources for UFC's operations and growth initiatives.

Operational Insights

UFC's strategic focus on the domestic UAE market has proven effective in mitigating external risks associated with export markets, such as political and financial instability. The company's commitment to product innovation and quality has strengthened its competitive position, allowing it to cater to the evolving preferences of health-conscious consumers. UFC's advanced manufacturing facilities and efficient supply chain management further contribute to its operational excellence.

Strategic Opportunities and Future Directions

Looking ahead, UFC aims to expand its product portfolio to include ice cream and other frozen foods, catering to the growing demand for diverse and convenient food options. The company plans to leverage its strong pipeline of innovative products to enhance its market presence and meet consumer needs. UFC's focus on the domestic market, coupled with its