In a time marked by significant global challenges and increasing consumer demands for sustainability, innovation in supply chains has become essential for business resilience.
Melahat Yildirim, the Group Director of Procurement at IFFCO Group, discusses how the organization has transformed its strategy regarding sourcing, logistics, and production to effectively manage unpredictability, integrate ethical practices, and leverage digital technologies.
With a focus on local supply chains, AI-enhanced optimization, and transparent, deforestation-free sourcing, Yildirim explains how IFFCO is developing a forward-thinking, responsible, and flexible food system throughout the Middle East and beyond.
How has IFFCO adjusted its procurement and logistics strategies amidst recent global supply chain disruptions
Recent years have seen unprecedented global supply chain interruptions. Our resilience stems from a robust global presence. We have revamped our supply chain approach to emphasize local production and sourcing, thereby minimizing reliance on imports while improving quality, agility, and speed to market. This local-centric strategy has been crucial in maintaining stability in essential product categories such as oils and fats.
We are also focused on creating shorter, more responsive supply chains throughout the GCC and beyond. By fostering global sourcing networks and streamlining production close to home, we ensure stable material access, reduce transportation disruptions, and lower emissions while keeping our products affordable and appealing to local consumers.
Moreover, ethical and sustainable sourcing is a core component of this approach. Whether sourcing deforestation-free palm oil or traceable wheat and soy, we understand that lasting resilience relies on responsible practices. Utilizing predictive analytics and real-time data enhances our ability to foresee disruptions—from climate-related events to geopolitical tensions—and respond swiftly.
Can you elaborate on how IFFCO integrates ethical sourcing principles into its supply chain across various markets
At IFFCO, our commitment goes beyond mere compliance; we strive to create long-term value through sustainable, inclusive, and transparent supply chains. Our sourcing choices significantly affect the environment, local communities, and the overall integrity of the supply chain. Therefore, we have implemented a structured, proactive approach that emphasizes traceability, transparency, and collaboration with suppliers.
Our 2024 ESG report highlights that about 95 percent of our raw material volume comes from four primary crops: palm, soy, sunflower, and wheat. For palm oil, we have reached 100 percent traceability to the mill stage and are working towards achieving full plantation-level traceability, targeting a deforestation-free supply chain by 2025.
To ensure responsible sourcing for all major crops, we have developed a supplier database that tracks the origin, certification, and adherence to our supplier code of conduct, which aligns with global human rights and environmental benchmarks. Our use of satellite-based tools for monitoring deforestation allows us to identify potential risks and maintain oversight in critical sourcing areas.
This year, we are introducing our Responsible Sourcing Code for soy, sunflower, and wheat to assist suppliers in meeting sustainability benchmarks, resolving data gaps, and enhancing reporting practices. We aim for complete traceability in sourcing these crops, aligning with our ethical and environmental commitments.
Additionally, we are focusing on engaging suppliers, developing capacities, and exploring local sourcing opportunities to diminish our carbon footprint and bolster regional economies.
What specific technologies has IFFCO adopted to boost operational resilience and enhance supply chain agility
Digital transformation is key to fortifying our operations and improving agility across the value chain. We have integrated technologies such as AI, predictive analytics, and factory automation to facilitate smarter, quicker, and more sustainable decision-making.
AI plays a crucial role in refining demand forecasting, enhancing planning efficiency, and reducing waste. It also supports intelligent route optimization and waste management, aligning with our ESG targets.
Our predictive analytics capabilities enable us to adjust product formulations swiftly based on changing consumer preferences, while AI-driven innovations in packaging support more sustainable and efficient format solutions without compromising product quality.
Our advanced production facilities, fully automated and state-of-the-art, ensure consistency, speed, and quality at scale. Collectively, these digital advancements create an efficient and resilient food system prepared for future challenges.
Amid the evolving economic landscape in the Middle East, what significant changes have you noticed, and how is IFFCO adapting to stay future-ready
The economic landscape in the Middle East is undergoing substantial transformation, characterized by increased diversification, investments in digital infrastructure, and a heightened focus on ESG initiatives. At IFFCO, we resonate with these developments by embracing innovation, promoting sustainability, and enhancing operational agility.
Ensuring a sustainable energy supply is vital for us. Since 2021, we have launched more than 30 energy and renewable projects across the UAE, Saudi Arabia, Pakistan, Indonesia, Italy, Egypt, and Spain, which have helped us reduce emissions, lower operational costs, and mitigate price volatility.
This energy transition is fundamental to our ESG strategy. Our goal is to become a resource-efficient, climate-resilient, and socially responsible organization, embedding sustainability into everyday operations while contributing to the long-term health of both the community and the market.
Concurrently, we are investing in local manufacturing, digital advancements, and regional collaborations to maintain our competitiveness amid ongoing economic and geopolitical changes. For us, being future-ready means pursuing responsible growth that adds lasting value.
How do you reconcile operational efficiency with the long-term goals of sustainability, especially concerning sourcing, transportation, and packaging
There is a symbiotic relationship between operational efficiency and sustainability. Many of our significant sustainability initiatives arise from optimizing operations.
Regarding transportation, our fleet of nearly 1,100 vehicles accounted for about 7 percent of total emissions in 2024. We are setting targets to reduce this by at least 1.7 percent by 2030 through route optimization, eco-driving training, and local sourcing, aiming to cut down 600 tCO2e annually.
In the area of packaging, we are progressing towards a circular economy model, minimizing the use of virgin plastics, enhancing recyclability, and incorporating recycled materials.
Our objective is to ensure that all packaging is either recyclable, compostable, or made from renewable materials by 2030 while reducing virgin PET and HDPE usage by 15 percent.
Through smarter logistics, responsible sourcing, and sustainable packaging practices, we are establishing a business that is well-equipped to face future challenges while benefitting the planet and communities.
What are your main priorities for further enhancing IFFCO’s supply chain resilience and digital capabilities in the next three to five years
Our key priorities include advancing our digital and operational capabilities, broadening regional manufacturing, and fostering innovation that aligns with regional growth and sustainability objectives.
We recognize opportunities to evolve our portfolio and reach new consumer segments, supporting national food security goals.
Projects such as our manufacturing facility in Ghana and the Berbera Free Zone plant in Somaliland, in collaboration with DP World, will extend our footprint and facilitate faster, integrated supply chains.
By 2025, we aim to enhance our presence in high-growth markets such as the UAE, Saudi Arabia, Egypt, and Turkey, with increased attention on Brazil, Asia, and Europe. Our full acquisition of operations in Turkey contributes to establishing more localized and resilient supply chains.
With over 95 operational locations, more than 80 brands, and engagement in over 100 markets, we are poised for efficient scaling, leveraging digital technologies, and creating partnerships that generate long-term value.
The upcoming years will be crucial as we continue to shape an innovative, flexible, and sustainable supply chain.