Feasibility Study

Food Wholesale Project

(Import, Export, and Distribution)

Phase 1
 Food Wholesale Project

Introduction

The food wholesale commercial projects are considered one of the most growing, profitable, least
risky and safest projects locally, regionally and internationally due to their easy and fast capital turnover
several times within one fiscal year. The reason is that food products are the most demanded goods and are
hardly compared to any other commodity.

The world population is highly increasing, which positively boost food demand and diversity.
However, some crisis, disasters and pandemic like the recent Covid19 pandemic may drastically affect food
provision to different parts of the world. Thus, the Saudi Government plans through its 2030 vision is
extraordingly willing to support food sector and diversity to nationalize this sector to avoid any shortage
thereof. Therefore, the trader ought to select the suitable factory in terms of quality and reliability. Moreover,
these products must conform to all specifications required by SFDA.

Food Sector in Saudi Arabia

 Food market size is SR 90 Billion. Food import covers SR 60 Billion and the rest is produced locally.
 There are 70,000 restaurants and 25,000 coffees consuming more than 45% of the food market.
 Daily sales of restaurants and coffees is around 110 million riyals.
 Workforce size in the food sector is 20%.

Project Concept (Idea)

This project is based on the bulk purchase of 3 categories of food products:

1- Vegetable oil products.

2- Legumes products.
3- Cheese and Pickles products.

Directly and exclusively from the factories in Saudi Arabia and Jordan for discounted prices, then reselling
(for higher but competitive prices) to mega sales points (hypermarkets, supermarkets, wholesale traders,
specialized food companies, chained restaurants, hotels and hospitals) in Saudi Arabia and to wholesales
traders in Middle East countries (Kuwait, UAE, Qatar, Iraq, Jordan and Yemen). Wholesale trade is quite
different from any other consumption projects due to the below characteristics:

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 Food Wholesale Project

 Loss percentage of 0%. Stock can be sold with no loss.

 Huge and time-increasing profits. It depends on the speed of capital turnover several times through
the year.
 Does not require spending of large amounts of money on advertising and marketing in the primary
stages. The whole capital shall be expended on products and project's fixed assets.
 The food demand is never ending. Thus the products merchandising is very easy.
 The easy product addition and omission process. And the possibility to amend the order and
specification due to the exclusive (relationship, business, dealing) with the manufacturer.

Project success indicators

 The population of Saudi Arabia is relatively big with a high purchasing power especially in food
stuff.
 The Saudi government plans and 2030 vision to support the national food sector to achieve food
sustainability and diversity.
 The economic stability and the good infrastructure in the country.
 The enormous increase in number of restaurants within the last 5 years, which requires the increase
of food wholesale companies to meet their demands.
 The mega sales centers orders for products are based on consumers' requests, so that there will be
relatively few returned goods.
 The team has more than 20 years of experience in food wholesale trade.
 A member of the team is currently working in a leadership position in the largest vegetable oil factory
in the Middle East, which will help us in the areas of pricing, targeted regions and clients’ access.
 A member of the team has already worked as purchasing, marketing and key accounts manager in
one of the biggest food wholesale companies in Saudi Arabia.
 We have firm and strong relationships with the biggest hypermarkets and supermarkets in Saudi
Arabia.
 We have firm and strong relationships with the top wholesale traders in the Middle East.
 We have an exclusive contract (as a dealer) with a high quality food factory in Jordan since 2016.

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 Food Wholesale Project

 Due to tax, saudization and Anti-concealment systems, more than 40% of the projects have been
closed, which shall open the way towards creating a remarkable commercial name in the food
wholesale market.
 There are few Saudi investors (with huge amounts of money) in oil vegetable and food wholesale
trade.
 Food consumption habits have recently changed, restaurants and supermarkets contributes to about
70% of the families’ needs.

Targeted Products

Table 1: Targeted Products

No. Product No. Product

1 Green Lentils 26 Carrot Pickles
2 Red Lentils 27 Black Peppers
3 Yellow Lentils 28 Bulgur
4 Peas (all types) 29 Sugar
5 Chickpeas 30 Sea Salt
6 Fava Beans 31 Mohammadi Rose
7 Lupine 32 Idlah Species
8 Mungbean 33 Vegetable ghee
9 Beans (all types) 34 Dried Lime
10 Soybeans 35 Pecan
11 Spices (all types) 36 Turmeric
12 Green Olives (7 types) 37 Cumin
13 Black Olives (7 types) 38 Fennel
14 Olives Salad 39 American Hill
15 Crushed Olives (Italian style) 40 Saffron
16 Local hot sauce 41 Coriander
17 Thyme 42 Dried Fruit
18 Sumac 43 Dried Vegetable
19 Makdoos (nuts stuffed eggplant) 44 Original Olive Oil
20 Liquid Jammed 45 Palm Oil
21 Soft Labneh 46 Sun Flower Oil
22 Labneh Jarashia 47 Corn Oil
23 Crushed Makdoos 48 Soy Oil
24 Cucumber Pickles 49 Canola Oil
25 Garlic Pickles 50 Shortening Oil

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 Food Wholesale Project

Work plan

Based on our vast experience in this field and the proposed capital for the project, the work plant
will be made in a simplified way as follows:
 Activation of account opening with mega commercial centers such as Al Othaim Market, Tamimi
Market, Hyper panda, Danube Market, Manuel Market and AlRaya Market in different stages as our
products have been already approved but no payment made yet. Such approval usually takes long
time.
 We receive orders from new and old centers by our representatives, then we request them from the
factories. This process will take less than a month till received by these centers. We shall wait for
the payment within 80-100 days for each center. After collection of the money, this process will be
repeated. Product supply period from Jordan is 2 weeks.
 Oil orders will be in accordance with market status and global standard prices. Agreement will be
made with traders, restaurants and wholesale traders
 Capital turnover ratio for food products and vegetable oil is around 4 -5 times a year with each
center.

Account Opening Fees

Table 2: Account opening fees and status in mega centers

No. of Approx. Open

No. Center Branches fees Status Payment
1 Carrefour Market 15 400,000 Active Fully Paid
2 Aljazera Market 5 35,000 Active Fully Paid
3 Alsadhan / SPAR 12 60,000 Active Fully Paid
4 Tamimi Market 49 70,000 Ready Not Paid
5 Panda Market 220 100,000 In - Active Not Paid
6 Othaim Market 250 100,000 In – Active Not Paid
7 Danube Market 42 80,000 In – Active Not Paid
8 Alraya Market 45 80,000 In – Active Not Paid
9 Farm Supermarket 85 70,000 Ready Not Paid
10 Manuel Market 10 70,000 Ready Not Paid
11 Bin Dawood Market 75 80,000 In - Active Not Paid
12 LULU Hypermarket 5 55,000 In - Active Not Paid
Total 1,200,000

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 Food Wholesale Project

Human Capital
Table 3: below demonstrate number and total wages of the employees required to operate the project

No. Section Position Approx. Total

1 Management CEO 25,000
2 Sales & Marketing Manager 20,000
3 Salesman 7,000
4 Sales Salesman 7,000
5 Driver & Marketer 4,000
6 Driver & Marketer 4,000
7 Senior Accountant & Government Relation 10,000
Finance
8 Accountant & Debt Collector 5,000
9 Warehouse & Logistic Manager 8,000
10 Labor 2,500
11 Warehouse Labor 2,500
12 Labor 2,500
13 Labor 2,500
Total 100,000

Table 4: Total employee wages, medical insurance and government charges for non-Saudi employees

No. Item Approx. Total

1 Employees' Wages 100,000
2 Medical Insurance 70,000
3 Government charges for non-Saudi employees 100,000
Total 270,000

Capital Requirements
o Basic Capital (To be available to start the project)
1. Cost of warehouse rent and furniture.
2. Cost of account opening fees.
3. Cost of machinery and transportation vehicles.
4. Cost of products purchase and distribution.
o Additional Capital (To support the additional expenses in the beginning of the project)
1. Employee wages, medical insurance and government charges for non-Saudi employees
(for the first year).
2. Utilities cost (for the first year).

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Cost of warehouse rent and furniture

Table 5: Cost of warehouse rent and furniture

No. Item Specification Approx. Total

1 Rent a warehouse 1500 m2 250,000
2 Build offices 4 offices 100,000
3 Air Conditions 6 pcs 20,000
4 Desert Cooler 70,000
5 Storage Shelves High Quality 100,000
6 Accountant Program 10,000
7 Cooling Room 10*10 m2 100,000
8 Fire alarm System 20,000
9 Office Equipment 30,000
10 Security Camera 8 Pcs 20,000
11 Stationary 5,000
12 Government Charges (Municipal) 20,000
13 Safety Requirements 5,000
Total 750,000

Cost of machinery and transportation vehicles

Table 6: Cost of machinery and transportation vehicles

No. Item Specification Approx. Total

1 Truck (1) 5 tons load 140,000
2 Cooled Truck (2) 3 tons load 200,000
3 Sedan Car (2) (Used) Toyota or Nissan 80,000
4 Forklift (Used) 1.5 tons load 80,000
Total 500,000

* We can reduce the capital when buying the machinery by installments

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 Food Wholesale Project

Cost of products purchase and distribution

Table 7: Cost of products purchase and distribution

No. Item Approx. Total

1 Vegetable Oil Capital (50%) 8,580,000
2 Legumes Capital (30%) 5,148,000
3 Cheese and pickles Capital (20%) 3,432,000
Total 17,160,000

Basic Capital
Table 8: Basic Capital

No. Item Approx. Total

1 Cost of warehouse rent and furniture 750,000
2 Cost of account opening fees 1,200,000
3 Cost of machinery and transportation vehicles 500,000
4 Cost of products purchase and distribution 17,160,000
Total 19,610,000

Additional Capital
Table 9: Additional Capital

No. Item Approx. Total

Employee wages, medical insurance and government charges for 270,000
1
non-Saudi employees (for the first year)
2 Utilities cost (for the first year) 120,000
Total 390,000

Total Capital
Table 10: Total Capital

No. Item Approx. Total

1 Basic Capital 19,610,000
2 Additional Capital 390,000
Total 20,000,000

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 Food Wholesale Project

Project Execution timeline

Table 10: Project Execution timeline

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