Branching Out

Raydan is a fast-growing traditional food business in Saudi Arabia. How have you built your business?

Raydan was founded in 1996 by Mansour Al-Sulami. The success story of Raydan is to provide smaller portion sizes of traditional Arabic food that is typically served in large quantities, such as a whole lamb or whole goat. These are the reasons behind our success: bringing single-portion meals to customers, ensuring it is cooked according to traditional methods, and guaranteeing freshness. We have almost 15 branches in Saudi Arabia and two branches in Egypt. We also have other concepts; we made an acquisition in 2014 of a confectionery business that produces Arabian sweets and chocolate in addition to providing catering services.

What are your immediate expansion plans, and do they call for international growth?

We already have a successful operation in Egypt. We determined all of the logistics and supply chain, and it generated excellent revenue until the currency fell. This will become a franchise in the coming months, thereby becoming an advantage. As a result of our performance in Egypt, we know we can replicate this elsewhere. We would like to expand to Kuwait, Bahrain, the UAE, and Oman, also via a franchise model. However, we first want to increase our presence in Saudi Arabia; we are currently only in Jeddah and Mecca. We have 11 branches in these two cities and also have several branches in Riyadh and Dammam. We will open one in Medina this year, two stores in Jeddah, and one more in Mecca. After 2019 we may open confectionary restaurants in Riyadh and Dammam. The market for such of food is in demand, and we are encouraged to have a wider menu to attract new people, such as children. One key thing is that our food is prepared fresh every day; nothing in the company is frozen at all. We have meat and chicken delivered fresh every day, ensuring we do not need to refrigerate for a long period.

What market forces helped you to decide to list on the new parallel capital market for SMEs (Nomu)?

We grew to the level and size required to go to Nomu, because the size of the company was almost SAR1 billion. The owner decided to separate the family from the management and install proper governance, and Nomu gave us the opportunity to do that. Growth cannot happen after a certain point with the same strategy and ideas as before. Last year we distributed a profit of SAR48 million. The growth of business continues as before, and we can still distribute more benefits to shareholders.

Do you have any plans to move up to the main Tadawul market?

Yes, that is the plan. The law states we cannot move until we complete two years in Nomu. After that we can upgrade to the first market if we meet the requirements. We are currently implementing a new ERP system that will help us collect information and be well organized. Good intelligence makes things easier and we are also working to change the corporate identity of the company, which is the Raydan logo. We will also change many aspects of the business, like having kids meals and signing agreements with religious tourism companies to increase our share during the Hajj season. We have prepared many things.

What has been your experience with online delivery services?

We had an agreement with Talabat.com and worked with it for almost six months. We have our own delivery service as well, and a fleet of 54 cars for delivery. It is a great practice as the sales and revenues have increased significantly from deliveries.

What are your plans for the next 12 months and your expectations of the market in this time?

We expect to grow more than the last two quarters as the worst is now over and we expect things to settle down. We plan to have the same performance by the end of the year as we had in 2016 because of the new branches that we will open and the new initiatives that we will take. The future will be positive as the government is investing money into the economy now. The number of Hajj pilgrims will also double in size, which will also benefit us. We expect business to pick up to 2015’s figures. After that, depending on the performance of the company, we expect it to improve further.