HSA Foods Yemen

completed

    The proposed investment consists of a loan to Hayel Saeed Anam (HSA) Group’s food processing operations located in Aden, Hodaida, and Taiz in Yemen. The loan proceeds will be used by Yemen Company for Flour Mills and Silos (including Aden, Al Hodaida and Al Hodaida Co. Limited), National Dairy & Food (Nadfood Hodaida and Nadfood Taiz), and Yemen Sugar Refinery (“HSA Foods”) for i) purchasing and import of raw materials into Yemen; ii) repayment of sister companies dues; and iii) availing a cash cushion for ad-hoc maintenance capex in different production facilities (“the project”). These companies represent the bulk of HSA Yemen Region’s food operations and are majority owned by the Saeed family, which founded HSA Group. Established in Yemen in 1938, HSA Group is one of the biggest conglomerates in the region; HSA Group currently employs more than 35,000 people globally across the Middle East, Asia, Africa, and Europe. The Group owns more than 85 companies; in Yemen, the Group owns 52 companies (entailing 50% of the global employees) located in Aden, Hodaida, and Taiz, which operate across different sectors including education, real estate, transportation, trading, plastic, soaps, water, packaging, cement, desalination, food manufacturing, and sugar refining and plays a key role in the country’s economy. HSA Yemen Region headquarters are located in both Cairo and Dubai from where central functions, such as Human Resources; Health, Safety & Environment; Supply Chain & Purchasing; Finance; Strategy and Compliance & Ethics, are managed.  Yemen Company for Flour Mills and Silos (Aden Mills) was established in 2000 in Aden; in response to increased demand for flour products, the company expanded its milling capacity by establishing Yemen Company for Flour Mills and Silos Al Hodaida in Hodaida in 2007 and Al Hodaida Flour Mills Co. Limited in 2014 at the same location (Hodaida Mills). Aden Mills and Hodaida Mills have a combined silo storage capacity of 365,000 tons and annual milling capacity of 2,000,000 tons and sell red, white, and sieved flour in addition to bran and wheat, packaged in various formats. The National Dairy & Food Company was established in Taiz (Nadfood Taiz) in 1983 specialized in dairy products and in response to the high market demand, Nadfood Hodaida was established in Hodaida in 2018; with a total combined annual production (mixing of raw materials and packaging) capacity of 550,000 tons, the companies produce yogurt, UHT milk, evaporated milk, legumes (beans and peas), and fruit juices. Yemen Sugar Refinery (Yemen Sugar) was established in Hodaida in 2013 as the first sugar refinery in Yemen; with an annual production (refining and packaging of raw sugar) capacity of 540,000 tons, it sells packaged pure fine white sugar (packaged in various formats) and molasses. In the context of the Covid-19 pandemic, HSA Foods continued to operate but during the lockdown period (six weeks), the companies operated with 50-60% of the workforce, producing 85% of critical products on the production plans. As of August, HSA Foods are back to business as usual with 100% of the workforce (excluding vulnerable groups) delivering on 100% of the production plans. Despite the ongoing security challenges in Yemen, HSA Yemen Region is recognized by all parties in Yemen as an essential contributor to the welfare of the country as a whole and thus has largely been left out of the conflict. It is expected that security concerns will not be an issue for the project.