CEO
In only its fifth year of operations, Baladna achieved a historical revenue milestone of QR 1 billion in 2023. This performance is a strong validation of our unrelenting focus on delivering value, every day. We deliver on our promises by meeting the ever-evolving needs of our customers and stakeholders, while preparing for a successful and sustainable future.
Alongside category growth, we grew from strength to strength, achieving robust targets based on the high benchmark of 2022’s performance, which was boosted by strong FIFA World Cup-driven demand. We delivered a stronger performance in all sales channels, quarter on quarter and year on year, and secured the highest market shares and brand equity in the 5 years we have been in business. Our overall market share rose to 53.5%, a two and half percentage-point increase, representing an achievement in a competitive market with a strong presence of many international players.
In the year under review, we reorganised our sales operation to capitalise more effectively on market dynamics, particularly the recent increase in population, and we collaborated even more closely with our customers. The resulting increase in volumes drove top-line growth by 7% to QR 1.06 billion in 2023.
Our ongoing focus on cost controls and efficiency improvements across the entire value chain resulted in robust double-digit bottom-line growth of 36% to reach the net profit to QR 110 million. In addition to these internal measures, fair value gain on share investment was a key contributor to boost the profitability.
New Executive Management structure to drive growth
A key development in 2023 was the implementation of a new organisational structure to drive better operational efficiencies and accelerate growth. My role is now supported by 5 senior executives heading up Finance, Operations, Commercial, Farming and Corporate Services. This structure streamlined the number of direct reports to the executive leadership, enabling key executives to dedicate more attention to their respective operational responsibilities. The lean management structure has allowed the business to enhance agility, collaboration, innovation and efficiency.
Growing our contribution to Qatar
Our commitment to meet customer and consumer demand remained paramount in 2023, as did our responsibility to contribute to Qatar’s food security. Our product expansion, improving efficiencies, rising market shares, diversification, and commitment to operating in a sustainable and conscious manner validated our purpose and the important role we play in Qatar’s economy.
Baladna’s in-country value (ICV), the measure of our domestic activities and expenditure as a contribution to Qatar’s economy, significantly increased in 2023. During the year, we added to our domestic supplier network, increasing the ratio of local services and products used by the business. This contribution to Qatar’s economy is in line with the National Vision of 2030’s localisation programme. As a 100% Qatari company, Baladna is committed to broadening our sourcing networks by adding new local vendors and strengthening ties with the domestic private sector.
Strategic partnerships and diversification
In addition to contributing to the domestic economy, Baladna launched our first domestic production of an international brand in line with the nation’s intention to increase local production. In early 2023, we established a strategic partnership with global cheese and snack giant, the Bel Group, to produce spreadable cheese under the brand names of La Vache Qui Rit and Jibnet Abu Al Walad. Additional Bel products are planned for the near future, which will not only reduce imports and supply chain disruptions, but will also provide a more responsible, environmentally conscious option for Qatari consumers.
Closer to home, we have been exceptionally pleased with the success of many of our key partnerships including Qatar Airways. The collaboration between 2 national champions has increased the presence of the Baladna brand across the globe. We entered the strategic partnership with the airline in February 2019, becoming one of the primary suppliers of locally produced products to the Qatar Airways Group, which also includes Qatar Duty Free (QDF) and Qatar Aircraft Catering Company (QACC). We leveraged our research and development capabilities to create unique product solutions that were tailored to suit various applications across the entire Qatar Airways Group, ensuring effective performance at altitudes of 50,000 feet.
International expansion gathers pace
An important pillar of future sustainable growth will be our international operations, and in this regard, we took further strategic steps in 2023 to broaden our international presence. I am pleased to report positive advancement in our forthcoming Algerian project with the Government of Algeria to establish milk production facilities. We anticipate this project will deliver significant shareholder value and mark another milestone in Baladna’s global growth journey.
Performance overview
The single thread running through all our operations is the outstanding effort by the entire team to achieve stronger outcomes when it came to the welfare of our herd, product quality, manufacturing and distribution efficiency, innovation and customer service. This is a testament to the performance of our team. In each case, meaningful advancements were made that when seen as a whole, truly illustrated Baladna’s unremitting dedication to continuous improvement and becoming Qatar’s most trusted brand in nutritional foods and healthy beverages.
Our Farming operation is dedicated to continually improving the long-term health of our dairy herd, as well as the productivity of our milking cows and efficiencies across the operation. In addition, we successfully introduced technologies that delivered substantial cost and water savings, while increasing the comfort of the herd.
Our Manufacturing operation is dedicated to producing superior quality products, every day. This ensures all products made at our facilities meet or exceed the high standards our consumers expect and deserve. Continuous improvements in manufacturing operations also delivered enhanced line efficiencies, lower product losses and increased overall efficiency.
Our Sales and Distribution operation is committed to ensuring the availability of our products to our customers and consumers, every day. We introduced tailor-made solutions to make sure our products continue to meet customer expectations. Our team delivered excellent operational improvements during the year, building on improved allocation and demand planning processes introduced in 2022. In addition, the team successfully optimised our route to market, delivering a substantial increase in volumes with no additional resources, while achieving a reduction in CO₂ emissions and mileage.
The availability of Baladna’s products across our markets played an important role in delivering strong market share gains in both dairy and juices categories in 2023. As a result, overall market share increased to 53.5%, up from 51.0% as at year-end 2022. This was supported by strong marketing communication and activations, particularly through digital channels. With highly effective communications, we were able to beat internal targets by reaching a record 1.2 million consumers and achieving engagement levels above the industry average.
Beyond operational performance, we began integrating our comprehensive sustainability principles into our corporate strategy in 2023, resulting in an environmental, social and corporate governance (ESG) framework and a roadmap for the next 3 years.
Our approach to corporate social responsibility (CSR) demonstrates our strategic and multifaceted commitment to making a positive impact in various areas. This commitment underscores our role as a responsible corporate citizen and a leader in the dairy industry.
As part of our overarching corporate strategy, Baladna introduced numerous sustainability measures and projects in 2023, which made a material impact and laid the foundations for even greater benefits in the years to come. Our inaugural Sustainability Report provides a transparent and detailed account of all our initiatives and outlines our ambitious plans for further excellence in the years ahead.
Looking ahead to 2024
In the coming years, our overarching priorities are to ensure the national food security and to diversify and develop our business both in and outside Qatar. We will maintain our focus on the constant availability of our high-quality products to consumers, anytime, anywhere. We are committed to delivering unmatched excellence across all facets of product quality assurance. Our 3-year food safety and quality culture action plan aim to instil an inherent awareness of food safety and quality principles in our workforce, equipping them with the knowledge and skills to consistently deliver excellence in all aspects of food quality assurance.
We are confident about 2024’s financial performance, particularly the anticipated strong growth in the net profits. The strategies and plans already in place are expected to deliver higher market shares as we extract further growth through all our channels and categories. Our product development and innovation programme will play a pivotal role in creating new avenues of revenue for Baladna.
We will, as always, maintain our focus on driving efficiency improvements, which will not only impact our operating costs, but also have a positive impact on our sustainability across various metrics. The newly commissioned evaporated milk and sterilised cream factory is expected to operate in higher capacity and can produce the nation’s total evaporated milk requirements. It will also serve as an alternative production facility for certain existing products further enhancing our production capabilities.
Our international expansion momentum will continue with proposed international expansion plans and are likely to make meaningful progress. These projects are key to Baladna’s long-term sustainable growth.
The Company’s ESG strategy will be strengthened by establishing a dedicated Sustainability Governance Committee and reporting all related progress directly to our Board of Directors, thereby improving our transparency and accountability.
We also intend to align our public sustainability disclosures with the Qatar Stock Exchange’s (QSE) guidelines, and we will adopt regular and rigorous risk assessments to identify areas where we can further improve our sustainability practices.
Acknowledgements
Delivering value, every day, is all about providing a superior healthy and tasty product range to our consumers. We remain ever grateful that they increasingly choose our products. Our growing customer base is integral to the expansion of the business in Qatar, and their support earns our deep gratitude. We are honoured by the confidence and trust in our business by our shareholders and remain committed to delivering the value they have come to expect from Baladna.
Our Chairman and Board of Directors provided exceptional guidance and support once again, for which I am immensely thankful.
Finally, I would like to take this opportunity to thank every member of the Baladna team for contributing to our historic financial milestone of QR 1 billion in revenue this year. It is a remarkable achievement.
