Home Previous Issues Industry and Investment in Yemen Improvement of Yemeni Food Industries Requires Increasing Agricultural and Livestock Production

Improvement of Yemeni Food Industries Requires Increasing Agricultural and Livestock Production

Sawt Al-Amal (Voice of Hope) – Yasmine Abdulhafeez

In the report “Investment in Food Industries”, the National Information Center stated that there are many industrial companies in the country that produce a variety of food industries, and it has a prominent impact in the Yemeni and international market.

Among these companies are the Yemeni Company for Dairy and Beverage Industry, Thabet Group of Companies, Almarai Company, the National Dairy and Food Company, and the Modern Co. for Food Products. Therefore, all of their products covered the local markets and reached other countries, according to what was stated in the report.

The General Situation of Food Industries in Yemen

“The food industries in Yemen originated in the middle of the last century, and it was flourished gradually. Thus, it has possessed today many commercial houses and huge industrial complexes that meet the needs of the Yemeni consumer of goods and products.” This is what Jalal Al-Askari, the Head of the Food Industries Engineering Department, College of Engineering, Al-Hodeidah University, said.

Al-Askari believes that despite the flourishing of the food industry in Yemen, it is still a manufacturing industry, because it relies on its primary raw materials from abroad, and then converts them into consumable commodities. Accordingly, this poses a barrier to the development of these companies, which rely on raw materials and auxiliary materials imported from abroad for their operational capacity.

He explained that when import operations stop, these industries stop accordingly, as happened during the past years due to the intensification of the ongoing conflict in Yemen, which led many industrial establishments to close their industries and lay off thousands of their workers, some of which are still closed until today.

Salim Al-Odhaili, Director of the Industrial Services Department of the Industry and Trade Office in Marib, told “Sawt Al-Amal” that the situation of food industries in Yemen is growing very slowly and does not keep pace with the development and population increase of the Yemeni society. It is just limited to domestic consumption of any industrial products, and export is limited to a very small percentage of agricultural raw materials.

Al-Odhaili stressed that the food industry is one of the most important industries, because it plays a significant role in securing human food. In addition, its development has a strong relationship with the development of the agricultural and animal sector, because it depends on it to obtain raw materials.

Nabil Al-Sharabi, a journalist and economic researcher, stated that the situation of industries in Yemen, including food, is often not at the required level that qualifies it to compete with the products of the industries of neighboring countries, which are characterized by perfect quality, specifications, packaging and marketing. However, there are Yemeni food industries that have made their way firmly to foreign markets, because they are manufactured in accordance with specifications, standards and packaging that suit the purchasing power of the foreign consumer.

Types of Food Industries

Al-Sharabi added that there are Yemeni industrial products that have crossed borders and become a brand that competes strongly in foreign markets. These products include, types of milk used for sweets and hot drinks, biscuits, juices, butter, margarine, oils, legumes and canned fish.  All of these products are characterized by quality, specifications and packaging suitable for the foreign market.

“The most important foreign markets for these Yemeni products are Egypt, Jordan, Indonesia and Gulf countries. Moreover, these products also reached the European and American market, as well as the African market and East Asian countries,” he stressed.

Salim Al-Odhaili, Director of the Industrial Services Department, Industry and Trade Office in Marib, said that among the most important food industries in Yemen are dairy products, vegetable oils, grain milling, flour and bran production, sweets and biscuits, juices, drinks and mineral water. However, Yemen still needs more industries working in food processing to cover the local market.

A food marketer – who asked not to mention his name – told “Sawt Al-Amal,” “The food industry in Yemen is constantly growing and developing. However, it only lacks guidance and continuous monitoring by the government in its adherence to international quality standards and specifications and not to fraud in following those standards.”

Development Methods

He believes that the ways to develop the food industry lie in allowing investors and capital to invest in this sector, allowing foreign capital to invest in the field of food industries, transferring foreign experiences to Yemen, and participating in international conferences for the food industry. This is to bring into contact with major international companies in the same field, and to activate the role of monitoring, specifications and standards by the government, in addition to keeping up with global production line development.

As for Salim Al-Odhaili, he believes that the development of food industries is directly related to agricultural and animal production, because they represent the main source for the development of food industries. Thus, the process of industrial development of food must be accompanied by an increase in agricultural and animal production.

He added that the dependence of many of the current food industries on importing raw materials used in the food industry from abroad does not represent a strategic stock for the food security of Yemeni society.

Food Industry Needs

According to the opinion of journalist Nabil Al-Sharabi, what the Yemeni food industries need is, first, the modernization of many machines and production plants, and a focus on quality, specifications and standards that are commensurate with the global orientation of the consumer, the manufacturer, countries and international bodies that are stressing on the consumer health and quality-focused diet. Second, they also need to keep up with the rapid global food consumption. Third, paying attention to the external appearance of the product and its distinctive and attractive packaging, in addition to taking into account environmental factors in the packaging materials. Fourth, they also need successful marketing and appropriate advertisements that appeal to foreign and Arab consumers.

Al-Sharabi also identified the most prominent factors that made the food industry in Yemen deteriorating, including the weak purchasing power of the consumer, the large influx of poor products from abroad at low prices, in addition to the lack of monitoring by the official authorities, and the stagnation of the role by the entities concerned with protecting the local market. This is due to the fact that it has become dominated by randomness, in addition to the continuous dumping of goods and foreign food products to the local markets with poor specifications and standards.

He added that among the factors is the lack of vision among the majority of Yemeni manufacturers regarding the transition to the foreign market, concerning only to continue their activity in the local market, as well as the absence of food research and studies centers specialized in developing industries and keeping pace with the variables of consumption and global competition. Other factors include the weakness of the Yemeni industrial base, the modest capital of the large percentage, whose capabilities do not exceed the process of possessing primitive factories, whose function is limited to packaging, in addition to the absence of the role of the concerned authorities in the field of assisting the Yemeni manufacturers to develop and market their products.

Difficulties and Solutions

Salim Al-Odhaili said that one of the challenges facing the development of the food industry sector and industries in general is the conflict and the events that Yemen is going through, in addition to the lack of an integrated vision in advancing each of the food industries, agriculture and animal production, because they are linked to each other. As a result, neither of them can be advanced independently of the other.

“The lack of facilities for investors in all parts of Yemen, and the multiplicity of parties controlling the land impede the investor’s work in the food industry of obtaining the necessary licenses. They also face a difficulty of obtaining auxiliary materials in the food industry, such as, the manufacture of paper, plastic and glass containers, aluminum foil and packaging materials of all kinds,  in addition to the challenges facing them in terms of transport and communication sectors, and others,” he added.

Jalal Al-Askari agreed with his predecessors, saying, “the most prominent challenges facing the food industry in Yemen – at the present time – are represented in two directions, the first is the difficulty of importing from abroad due to the closure of the port of Al-Hodeidah. As a result, many companies tend to import all their supplies through the port of Aden. Due to the complexities of procedures for importing from it, this leads to delay the arrival of materials and equipment.”

“Companies pay exorbitant amounts of double fees and royalties, in addition to transportation fees via alternative routes to the main roads, as well as the loss or damage of many materials due to the frequent accidents on these roads.  As a result, all these factors greatly affected the activity of companies and hindered their advancement, which led to an increase in the cost of production, which is reflected negatively on prices. Thus, the citizen was directly affected,” he continued.

“The second direction is the fluctuation and rise in exchange rates between the different regions of Yemen. This has increased the prices of commodities and materials, and this is only a portion of what Yemen’s industrial companies are facing. The third direction is represented in the security situation, because investment in general and industrial investment in particular need a safe environment. In addition, many food-processing facilities have been destroyed due to the conflict, which resulted in heavy loss of life and property,” he added.

Regarding the possible solutions, Jalal Al-Askari, Head of the Food Industries Engineering Department – College of Engineering, Al-Hodeidah University, said, “The industrial sector must be far from the direct and indirect interventions of the parties to the conflict, which would cause to stop the wheel of development in this sector. Therefore, in order to advance the food industry sector, it is necessary to turn to the agricultural sector, which is the first source of food factories with raw materials.  In addition, the provision of concessions and tax as well as customs exemptions would help push capital to invest in the food industry instead of migrating abroad.”

He explained that in order to flourish the food industry, the port of Al-Hodeidah must be opened to facilitate the entry of goods and materials for manufacturing operations. Besides, the agricultural sector must be supported to reduce dependence on imported raw materials. Furthermore, concessions and exemptions must be granted to this sector, in addition to providing a safe environment for investment.

Al-Sharabi, a journalist, added that one of the solutions is the formation of a great economic and industrial conglomerate with large capital, as well as research centers and development studies. Before that, the feasibility study should focus on the foreign market, and benefit from free market agreements.

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