Coffee with: Alaaeldin Shousha, CFO of First Mills

We sat down with Tadawul-listed First Mills’ CFO Alaaeldin Shousha (Linkedin) on the sidelines of the Capital Markets Forum in Riyadh, for a chat about the company’s challenges, successes, and future goals. Shousha delved into the company’s journey post-privatization, and what the market leader is now doing to expand its operations and market presence.

Edited excerpts from our conversation:

ENTERPRISE: Walk us through the changes that First Mills has undergone since its privatization and IPO a couple of years back.

Alaaeldin Shousha: Before privatization, First Mills was a strictly government-run business with a manual process and no formal corporate structure. It was essentially a non-profit agency. After the privatization, we embarked on a major transformation that spanned across all aspects of the business. From governance to operations, every element was revamped.

The time between privatization and the IPO was very short — only 18 months. This made the process incredibly challenging, as we had to simultaneously manage the transformation while preparing for a major public offering. Today, First Mills is a world-class company, with a highly engaged and structured management team and board, which I believe has been a key to our success.

We were the first milling company in Saudi Arabia to go public, and we continue to lead the industry with innovations like producing semolina from durum wheat. In terms of competition, we are the largest milling company in the domestic market by the number of branches, though we’re not yet the largest by capacity. However, that will change when our new facility in Jeddah becomes operational in June 2026. We are strategically located across the Kingdom, with mills in Tabuk, Jeddah, Qasim, and Ahsa. This extensive network gives us a significant logistical advantage, especially in terms of transportation costs and time.

We also lead in specialized milling capabilities, being the only company in Saudi Arabia that produces semolina from durum wheat, which is used in pasta production. Additionally, we offer customized flour products, such as pizza flour, which sets us apart from other players in the market.

Our ability to quickly adapt and lead in areas such as customized flour production and strategic mill locations gives us a distinct advantage. Most importantly, our commitment to operational excellence and growth makes us a true leader in the milling industry, and we’re just getting started.

E: First Mills’ CAGR over the past three years sits at around 10%. How do you maintain these growth levels in a commodity business?

AS: It's quite an accomplishment, especially considering we are in the commodity sector. The domestic milling market is growing at only 3-4%, yet First Mills has been able to capture market share and expand its customer base. Our growth is a result of strategic decisions, including expanding into the feed business, which has been a major enabler of our success. Additionally, our operational efficiency and larger production volumes have driven sales and further enhanced our market position.

We are the largest player in the flour market, holding a 29% share in the flour market, and we're growing steadily. The competition landscape is tough, with only a few major players in the industry. The barriers to entry are significant, as new companies would need licenses from the General Food Security Agency (GFSA), which currently does not allow new players to enter until 2030. This provides us with a secure market position for the time being, and we are focused on maintaining our leadership through continuous investment in infrastructure and innovation.

E: What is the company’s future plan in terms of new products and expansions?

AS:Diversification is definitely a key part of our future. We’re looking at increasing our product offerings and investing in capacity. Over the next two years, we have earmarked around SAR 210 mn for expansion, and we’re also planning for further diversification of our product range. Our feed business, which accounts for 30% of our total revenue, is a major area of growth. We also plan to increase our flour capacity and venture further into adjacent markets.

** ICYMI- First Mills plans to set up a SAR 123 mn flour milling unit in its Al Qassim plant. The new unit will boost the plant’s wheat milling capacity by 66%, or 600 tons a day, to 1.5k tons a day. Construction on the unit is expected to wrap up in 2Q 2026.

E: How is the company financing these expansions?

AS: We’re using a mix of debt and cash for our expansion plans. While we’re very cash-rich, thanks to the nature of our business being 90% cash-based, we have also secured financing from the Saudi Industrial Development Fund (SIDF). We took out a SAR 150 mn working capital facility in 2024, which has helped us reduce debt and maintain strong cash flow. Our debt-to-equity ratio stands at 1.3x, and we are exploring further financing options from SIDF for longer-term investments.

E: What are the company’s prospects in terms of international expansion?

AS:We’ve recently received a license to export flour, which is a significant milestone. Until November 2024, no milling companies in Saudi Arabia could export flour. Now, we are allowed to export up to 50% of our surplus capacity — that’s after covering domestic demand — to international markets, which opens new opportunities. We’re focusing on developing a proof of concept for the unsubsidized flour market, and expanding into exports is an important part of this strategy.