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“We produce 60% of Palestine’s flour”

09 November 20177 min reading

Abdelhafez Awad, Al Salam Mills CEO: “We have established our own millers in 2002 and since then we have increased our production capacity so as to be the number one of the industry with 360 metric tons. We produce 60% of the total flour consumption in Palestine.”

abdelhafez_awadInterview: Meryem ALTINDERE-Cemalettin KANAŞ-GAZA

Abdelhafez Awad, The CEO of Al Salam Mills Company, who has achieved to be the leader of market in a short period of time through the mills he has established in Gaza Strip in 2002, defines their new production line as follows: “An accurate investment that aims to grow our market share in the Gaza flour market”. Emphasizing that the state-of-the-art machines at their production facility are of Turkish origin, Awad listed his primary expectations from the companies that develop milling technologies as continuous operation without malfunction and permanent technical assistance. Stating that milling industry has an important position among all industries in their land, Palestinian businessman reminds that they cannot carry out any export due to Israeli siege imposed on Gaza. Mr. Awad underlines that for the time being, a significant level of wheat farming is beside the point in Gaza and West Bank and thus they are purchasing wheat from Israel, Russia, Ukraine and the United States.

Mr. Awad, your company AL SALAM MILLS, is one of the biggest companies in Palestine milling industry. First of all, would you like to tell us a little about the Palestinian milling industry and your place in this market as a firm? How many flour factories are there in Palestine? What is the total amount of wheat processed in Palestine? And how much of that processed wheat is produced by your factory? The Palestinian milling industry represents a significant portion of the aggregate industries in Palestine, as essential and strategic commodity wheat flour is considered to be one of the most consumed commodities in Palestine. We have an advanced position in this industry.

Palestinian market consists of 2- sub markets, one is the West Bank and the other is Gaza strip, there is a direct connection between those 2 markets, because Israel divided Palestine into 2 parts and there is a physical connection between them, so we will concentrate our study on Gaza strip.

Except for small factories with small production capacities, there are mainly 5 factories, 3 of which are active.

Daily consumption of flour in Palestine is around 600 Mt tones which correspond to about 800 Mt of wheat. We mainly produce about 60% of the market.

We see that your company was established about 20 years ago, but I think your experience in the sector is actually much longer. Could you tell us about your company’s history in the milling industry and your corporate story? We had experience in flour marketing for more than 40 years since we used to wholesalers for mills outside Palestine, and then we established our mills in 2002 and since then we have started the process of expanding our production capability to be number one in the industry with a production capacity of around 360Mt/24hrs.

What does Al Salam Mills owe its success to in the Palestinian market? What kind of investments and service have you made to become the greatest milling in Palestine? Since our establishment, we, Al Salam Mills Company, designate our self to a mission of being number one in the market and our vision was clearly stated that the quality of our product to be beyond customer expectation.

Could you please give us some information about your production facility? What can you say about the technologies you use in production, your production capacity, and your product variety? What are the differences that distinguish you from other competitors in Palestine in these matters? Our production facility consists of 2 production lines and the machines which are fully automated were originally from Turkey. The technology used is made in Turkey with PLC capability.

The product variety ranges from packing of 1KG- up to 50KG, with the scale of quality to meet all the customer’s needs.

The mix of our wheat from different origins enhances our quality of flour and satisfies the taste and the requirements of our customers.

As far as we know, recently you have activated a new production line. Would you give us some information about this investment? What technologies your new investment include and how will it contribute to your capacity and quality? Our new production line is of Turkish origin from Ugur Company, which represents a forward step in the technology used with high advance technique and practices. The products extracted from this line represent an extra addition to our product variety in terms of flour and bran.

Why did you need such an investment? Is the target of this investment domestic market or abroad? What we aimed when acquiring this production line was gaining extra market share in Gaza wheat flour industry. It is a good future investment for us. Exporting product from Gaza is not allowed due to the Israeli siege imposed on Gaza. Is there any investment plan for the near future? There is no need for a new investment at this stage considering we are providing service. If some hope of exporting to outside Palestine arises in the near future, we will reassess a new investment of that kind.

Mr. Awad, what are the factors you particularly take into consideration in choosing a partner or technology over the course of deciding a new investment? What are your most important expectations from companies manufacture milling technologies? The most important factor for us is the quality of product that will be produced using these machines, even though the flour quality is determined by the type of wheat used in the milling process. The physical appearance of the flour is very important and the extraction rate of wheat is an essential element.

I can list our expectation from the manufacturer of mills machine as: 1- Reliability of machines: where reliability means continuous operation without malfunction, smooth operation, and durability. 2- Easy operation procedures: easy steps to operate without any complexity. 3- Technical support: technical assistance and maintenance given by the supplier.

Could you please give us some information about the flour market of Palestine? What is the flour consumption rate in your country? What is the amount of the imported flour? How much flour is produced by local millers like you? How do you see the future of your country in the industry? Due to the difficult political and economic situation in Gaza, the flour market is facing several problems such as continuous power failures, closure of crossing boards, high costs of transportation due to Israeli regulations. These and some other factors affect our ability to compete with other competitors from outside of Gaza, as a consequence many suppliers sell their products in Gaza with cheaper prices than the local ones.

Also, so many countries and UN agencies send donations to Gaza, therefore it’s difficult to determine the exact quantities of flour entering Gaza.

As I said earlier there are only 3 mills actually operating in Gaza, their capacity is around 350Mt/24hrs in total.

If the political and economic condition gets better, we expect more prosperity and development which leads to better markets.

One of the most important subjects in milling is the raw material, namely wheat. Where does Palestine stand in terms of wheat production? From where do the Palestinian millers provide wheat? Regarding the wheat in Gaza or in West Bank, there is no significant wheat agriculture. In Israel, wheat production covers about 25% of their demand. We purchase the wheat from Israel, Russia, Ukraine and the USA.

 

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