Middle East livestock | Business restructuring for national meat producer

To address the significant challenges faced by the client and reposition the business for long-term sustainable growth, Farrelly Mitchell developed a detailed multiphase solution.  

Phase 1: Operating and financial assessment 

The initial phase of the project focused on conducting a comprehensive review of the client’s operating structure and financial health. During this phase our financial consultants examined the organisation’s, cash flow, investments, debt, working capital and other operational expenditures. At the same time our operational consultants reviewed the critical areas of the business operations, such as procurement processes, feedlot management, abattoir operations, and distribution systems. This process highlighted several operational challenges such as an over-reliance on specific livestock suppliers, inefficient procurement and feedlot management practices, insufficient food safety standards, and excess capacity within the distribution fleet. Together, these assessments allowed our consultants to quickly identify areas for cost reduction and operational improvements. 

Phase 2: Market assessment and positioning 

We conducted an in-depth market assessment to better understand the competitive landscape and the client’s position within it. This included an evaluation of market demand, pricing, margins, and the supply chain structure.  

We analysed key competitors and their business models and reviewed their product offerings and market strategies. This assessment provided critical insights into the competitive dynamics of the market, especially in the wake of subsidy removals.  

We highlighted some direct competitors who had leveraged broad supply networks, strategic alliances and a keen understanding of market demand to undercut our client and enhance their competitive position. We identified ways in which our client could differentiate itself from its competitors and tap into higher-margin market segments by diversify its product base and offering complementary products. Furthermore, we projected the client’s potential market share by analysing current trends and consumer preferences. 

Phase 3: Customer review 

We conducted interviews with existing customers across different segments, including wholesale butchers, retail outlets, and HORECA (Hotels, Restaurants, and Catering) channels. These interviews were instrumental in collecting qualitative data on customer experiences, satisfaction levels, and perceptions of the client’s product offerings. 

The feedback gathered from these interviews revealed several critical insights and underscored the importance of product consistency and quality control. Later, these insights would guide the development of customer-focused strategies in the restructuring plan. 

Phase 4: Management capability assessment 

A detailed evaluation of the client’s senior management capabilities was carried out. This included an analysis of leadership effectiveness, decision-making processes, and operational management skills.  

Our evaluation revealed that the client’s management team, was found to be reactive rather than proactive, with decision-making processes that were often slow and not fully aligned with the new market dynamics. This short-term focus had left the company vulnerable to market shifts and competitive pressures. Moreover, the assessment highlighted deficiencies in key operational management skills, particularly in areas such as procurement, logistics, and customer relationship management. There was also little focus and investment in talent development, which had resulted in a skills gap at various levels of the organisation, further hampering the company’s ability to adapt to the new market realities. 

Despite these challenges, the management team did possess deep industry knowledge and a strong understanding of the local market. These strengths would provide a solid foundation upon which to build the necessary capabilities for the future. 

Phase 5: Technology and operational efficiency review 

We assessed the operational efficiency of the client’s technologies and processes. This review was critical in understanding how well the client’s current technologies and processes supported their production goals and overall service levels.  

Capacity utilisation was a critical area of focus. In particular the client’s abattoir operations, were found to be operating below optimal capacity. Several bottlenecks were identified, particularly in the handling and processing stages, where outdated equipment and manual processes were causing delays and reducing throughput. The integration of automated systems in the abattoirs would streamline various aspects of production and provide real-time data to the management team. This would enable them to monitor key operational metrics, identify bottlenecks and react accordingly. Similarly, upgrading the distribution process with route optimisation and fleet management systems would lower operational expenses and improve delivery times. 

Phase 6: Strategy and restructuring plan development 

Based on the insights gathered from the previous phases, we formulated a comprehensive strategy and restructuring plan. This included recommendations for a new business model, optimal product mix and revised pricing strategies along with a comprehensive view of the potential financial outcomes and challenges associated with the restructuring plan. 

This plan was grounded in a detailed analysis of the client’s current operations, market conditions, financial health, and management capabilities. It highlighted several key areas for improvement, including the need to strengthen corporate governance, enhance operational efficiency, and develop a more robust sales and marketing strategy. 

The implementation plan outlined a clear timeline for the transition and offered practical steps for the client to smoothly implement the recommendations that had been made.