Halwani Brothers SWOT & PESTLE Analysis

Strength

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Weakness

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Opportunity

1. Increasing consumer base in key markets: Halwani Brother’s major operating markets of Saudi Arabia & Egypt are expected to see a constant and high rate of population growth till 2025. In 2020, Egypt saw its population surpass a 100 million and Saudi Arabia saw a constant growth rate of 2.7% with population reaching 34 million in March 2020. Along with this, there has also been a rise in the amount of consumption per family causing a hike in demand. Halwani Brother’s thus has a good opportunity for growth.

2. Strong potential in food processing industry in Saudi Arabia: Sales for the food industry within the KSA region is expected to grow exponentially in the coming years. This is mainly due to the current structure of the region in which it exports as much as 80% of the food needed from around 2015. This is as per 2019 statistics given by Hisham Al-Jedaie, chief executive of the Saudi Food and Drug Authority (SFDA). Saudi’s new NPL initiative, which seeks to make foreign investment easier, is expected to cause a boost within Saudi’s food processing sector. This is turn will lead to growth in local food consumption through investment growth in key food segments. Halwani too hopes to expand and help in the strengthening of the internal trade systems and local food production which will result in lower costs and ultimately lower value added tax (VAT) for the consumers.

Threat

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Political

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Economic

1. Oil and gas major contributor to KSA’s economy: As a key member of the Organization of the Petroleum Exporting Countries (OPEC) and the Gas Exporting Countries Forum (GECF), Saudi Arabia, has played a vital role in international oil & gas (O&G) markets. Revenues from oil and gas has also fueled the growth of the Saudi’s economy and diversification. The disagreement on oil production in March 2020 with the OPEC+ members has sent the global oil prices tumbling, which will also impact the Kingdom’s economy. Thus, slowdown in the economy due to low oil prices multiplied by the impact of Coronavirus (Covid19) will impact Halwani’s revenues in 2020.

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Social

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Technological

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Legal

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Environmental

1. Initiatives for water consumption in the kingdom: In order to accelerate water conservation, the Saudi government has initiated several policies since 2015. One such policy forbids the domestic production of green fodder after 2019. This can however become a short term issue for the the domestic food industry and for Halwani Brothers as it will result in the import of green fodder for livestock. Alliances and joint ventures may however prove to be a solution that can help manage costs.