MC4 to deliver better results on higher production capacity, exports: CEO

The approval of the General Authority for Food Security (GFSA) on MC4’s expansion of its flour production capacity and export its products will likely have a significant positive impact on its financial performance in the coming period, he added in an interview with Argaam.

The top executive also said focus will remain on seizing key opportunities to meet growing consumer demand and spur the company’s overall operational performance.

“The company is focusing on enhancing sales of high-margin products such as shelf-stable packages, value-added flour, and animal feed, which have witnessed rapid growth over the past period. It is also seeking to expand its sales operations by widening its customer base and expanding its reach through various sales channels,” the CEO stated.

MC4 is also working to improve its operations, lower operating expenses, and optimize the use of its assets and resources, with the aim of achieving operational excellence. It will also continue to launch new high-margin products, thus boosting its market share, he added.

Additionally, as part of its leadership and efforts to achieve sustainable growth, MC4 focuses its strategy on adopting broader production and distribution capacities, hence expanding its portfolio of leading products, improving their quality, and enhancing overall operational efficiency.

Accordingly, its investments in infrastructure and operational processes should enable meeting the growing demand for high-quality flour and animal feed products. The company’s presence is strong enough to serve 80% of the Kingdom's population, according to Al-Maktary.

As for financial results, the company has posted remarkable net profit growth of nearly 20% year-on-year (YoY) in 2024 and the fourth quarter of that year. Net profit rose from SAR 35.2 million in Q4 2023 to SAR 42 million in Q4 2024, with the full-year bottom line also up from SAR 143 million in 2023 to SAR 171 million in 2024.

This profit hike was primarily due to revenue growth and the improved operational and production efficiency, which in turn pushed profit margins higher, the CEO pointed out.

The company's revenues grew by 13% in 2024 and the fourth quarter of that year, with the annual gross revenues reaching an all-time high of SAR 629 million, Al-Maktary noted.

This growth was driven by strong performance across the company's main business divisions, particularly in the flour, feed, and bran, reflecting the successful implementation of strategic initiatives, he added.

Its flour product portfolio witnessed a 15% uptick in Q4 2024, while the feed and bran product categories saw a 12% YoY increase, driving an impressive a 16% hike in sales volumes. This came thanks to the company's geographic expansion and increased coverage.

Furthermore, the FOOM brand now contributes a sales share of nearly 30% in the consumer packaging division, according to the CEO.

As for the impact of MC4’s geographic expansion, Al-Maktary indicated that the company's strategic presence in rapidly growing regions such as Dammam, Madinah, and Al Kharj led to an exceptional competitive edge, enabling its provision of highly efficient services across the Kingdom.

The company’s distribution network facilitates operational processes and seamless product delivery to customers, resulting in cost savings and improved profit margins, as evident in the company's exceptional performance during the past quarter, he further said.

Regarding production capacity in Q4 2024, the CEO stated that MC4 currently operates six production lines with a total production capacity of 3,150 metric tons per day. This translates into an annual production capacity of about one million tons of flour, at an operating rate of 88%.

He explained that the company recently obtained the GFSA’s green-light to ramp up its production capacity by 11.67% by extending the number of working days from 300 to 335 days, thus enabling a production capacity of 1.06 million metric tons per year, besides increased production of finished goods.

The company has also obtained the GFSA’s go-ahead to export flour products to regional and international markets, said the top executive, adding that talks with potential export partners are at advanced stages.

Furthermore, MC4 aims to explore promising opportunities in new markets, he stated, emphasizing that the company’s development strategy includes enhancing its sales mix to constitute products that are both subject to government regulation and unregulated ones.

For unregulated products, MC4 aims to launch innovative production lines, including stock-keeping units for donuts and pizza, while focusing on boosting its market share in the consumer packaging business division, he added.