Armada Food/Sönmez: Our Processing Capacity Will Double by 2025 with the Completion of Our Investments

Foreks - Armada Gıda recently conducted an IPO analyst presentation on Wednesday, November 27, 2024, at the Wyndham Grand Levent Hotel in Istanbul, with significant participation from financial stakeholders ahead of the planned public offering led by Global Menkul Değerler (IS:GLBMD). Armada Gıda's Chairman Fethi Kalıpçı Sönmez, Vice Chairman Saygın Sönmez, and Board Members Mehmet Hayri Sönmez, Hamiyet Sönmez, Armada Gıda’s Corporate Finance Director Biyanka Öztürk, and Global Menkul Değerler’ Corporate Finance Director Yiğit Engiz shared details regarding Armada Gıda's growth story since its inception, financial performance, and future goals.

"We export to over 90 countries" Fethi Kalıpçı Sönmez, Chairman of Armada Gıda, emphasized that they have built Armada Gıda into one of Turkey's largest industrial and exporting companies with over 30 years of experience, stating, “Today, we continue to process conventional and organic products in our three factories located in Mersin, covering a total area of 137,123 square meters with 11 production lines. We engage in processing, sales, import, and export activities across nine main product groups: pulses, grains, bulgur, organic products, superfoods, pulse flour, rice, gluten-free products, and others. With a processing capacity of 725,000 tons/year and a storage capacity of 118,665 MT across our three factories, we currently export to over 90 countries, including Germany, Italy, Egypt, Tunisia, and France. Approximately 70% of our annual revenues come from global markets. As of the financial period ending December 31, 2023, we accounted for 7.2% of Turkey's total exports in selected pulse products and 7.4% in grain products. We are particularly influential in the production of products like red lentils, chickpeas, beans, bulgur, and rice, both globally and domestically. We are leaders in the export of organic lentils, organic beans, organic bulgur, and organic rice in Europe. Furthermore, we maintain our position among market leaders in several important European countries for the export of conventional products,” he added.

Investment in the third factory is scheduled to be completed by the end of 2025 Sönmez provided information regarding investments that would further advance Armada Gıda on the global stage, stating, "We plan to increase the capacity of our bulgur processing line in our Central Factory, currently at 483 tons/day, to 966 tons/day with an investment of approximately 7 million dollars. This investment is set to start in 2024, with operations expected to commence in 2025. We activated a storage capacity of 30,000 MT at our ongoing third factory site in 2023. Construction of our 2,000 square meter factory area was completed in February. We plan to commission a functional food facility with a total production capacity of 40 tons/hour in this factory by the end of the year. Additionally, we anticipate completing the 8,200 square meter Lidaş warehouses and the 8,800 square meter second phase warehouses, which began construction in 2023, by the end of the year. Upon completion of the investment, we plan to establish a pulse factory with a processing capacity of 4,800 tons/day and a storage capacity of 181,500 MT in the same area. A significant investment of approximately 20 million dollars has been made for the third factory, which will serve as a production campus for Armada Gıda, with the total investment size targeted at 54 million dollars. We aim to complete the entire investment of the third factory by the end of 2025."

Targeting regional player status through Kazakhstan investment Furthermore, Sönmez outlined their goal of becoming a regional player with plans to establish an agricultural product processing facility in Kazakhstan. In this regard, on November 29, 2022, they established the company AC Agro LLP as a subsidiary. Discussions are ongoing for the land where the facility is to be established. Initially, they aim to set up a storage area and pulse processing facility of 4,000 - 5,000 square meters with an investment of approximately 4 million dollars. Additionally, they plan to activate a total of 28.8 MW PV investments in Şanlıurfa Viranşehir and Hatay Antakya.”

Becoming one of the 10 suppliers of the UN with Super Cereal Sönmez also announced their plans to produce "Super Cereal," known as an adult meal, alongside conventional and organic products, stating, “Super Cereal is a nutritional supplement designed to provide essential nutrients and energy to vulnerable populations, such as pregnant and breastfeeding women, infants, and young children, particularly in the context of emergencies and food insecurity. Since 1995, we have been a registered supplier of WFP, which uses Super Cereal in various food aid programs globally. The aim is to prevent malnutrition, support recovery from malnutrition, and contribute to the overall health and well-being of individuals and communities facing crises or food insecurity. As Armada Gıda, we have made an investment in a production facility with a capacity of 144,000 tons/year for the production and shipment of this product for the UN. We plan to be one of the 10 suppliers of the UN for this product, which will be sent to areas where famine is prevalent.” Sönmez indicated that they would continue their investments in line with their sustainable growth targets in the coming period.

"We aim to successfully complete 2024 as well" Biyanka Öztürk, Corporate Finance Director of Armada Gıda, highlighted the company's strong financial structure, noting, "Between 2021 and 2023, we increased our sales by 22% in tonnage terms and our revenue by 15% in dollar terms. Despite the global uncertainties and increasingly challenging market conditions, we managed to increase our revenue and the share of exports in our revenue in 2023. Our revenue for 2023 was realized at 211 million USD, while our exports reached 147 million USD. During the same period, we achieved an EBITDA of 32 million USD, with an EBITDA margin of 15%. Thanks to our strong financials and the right investments we have made and are continuing to make, we aim to successfully complete 2024, just as we did in previous periods."

After the presentations, Fethi Kalıpçı Sönmez, Chairman of Armada Gıda, and Board Members answered questions from analysts.