Emirates Agthia studies new investment opportunities in North Africa

Emirates Agthia studies new investment opportunities in North Africa

The Emirati Agthia Group is studying new investment opportunities in Egypt during the coming period in conjunction with studying a number of investment opportunities in the Middle East.

CEO of the Group Mubarak Al-Mansoori said that the Egyptian market is an attractive sector for investment and enjoys promising investment opportunities, especially as it includes a consumer base that exceeds 100 million Egyptian citizens.

He added in an interview with Daily News Egypt that the company has a cash balance of AED 1.1bn that will allow the implementation of many acquisitions during the coming period, noting that the company can also borrow up to AED 1.5bn, as the net debt brought in about 2.4 times the profit at the end of the first half (1H) of this year.

He also explained that the group’s acquisition strategy is based on studying the available opportunities for acquisition and not based on markets, adding that the group has a number of criteria in the companies it aims to acquire, most notably the strength of the brand, the population density of the country it is targeted to enter, as well as future growth opportunities.

With the changing consumer behaviour of individuals around the world, being selective when it comes to opportunities has become necessary in order to meet the different and changing needs of the target audience, according to Al-Mansoori.

He added that the company focuses in particular on the frozen food sector and the healthy snacks sector, noting that Agthia has acquired Al-Foah, which is the largest producer of dates around the world, exporting its products to 45 countries around the world.

The group has also already executed a number of acquisitions in 2021 worth more than AED 2.3bn and recently acquired a stake of about 60% of the Egyptian Abu Auf.

Furthermore, Al-Mansoori said that the company’s strategy during the remainder of 2022 is based on integrating and enhancing the business of the group’s subsidiaries, pointing out that the company seeks to develop small capital expenditure plans to enhance its business.

He stressed that the focus on improving the level of integration between the group’s companies’ businesses will achieve the best possible returns at the current stage to enhance the presence of food products in the markets in which it is located, pointing out that the group is working on integrating activities between Atyab and Nabil Foods, which operate in the frozen meats sector.

Additionally, he said that Agthia exports its products to more than 45 countries, including Saudi Arabia, Libya, and the UAE, especially Abu Auf products, which recently opened four new branches in the UAE.

Al-Mansoori explained that Atyab is one of the pioneers in terms of market share in the frozen meats sector, and the group aims to work on increasing that share during the coming period by focusing on the Egyptian market in addition to exports.

In September 2019, the Emirati Agthia Group acquired 75% of the Ismailia Agricultural Investment Company (Atyab), which is engaged in the production of frozen beef and poultry in Egypt.

On the challenges he sees in the Egyptian market, Al-Mansoori explained that the group has good experience in the Egyptian market, and the challenges faced by Agthia are similar to the challenges in all economies around the world, which are represented in inflation, changing consumer preferences, and uncertainty regarding the future of food prices.

He stressed that the group is able to deal with challenges and develop appropriate strategies to deal with them.

“In our opinion, Egypt has huge potential and a large consumer market, and the acquisitions that we have made in Egypt to date reflect huge expansion potentials and important opportunities to consolidate our presence in the country,” he said.

On the impact of supply and supply chain disruptions on the group’s business, the CEO believes that the diversification of the investment portfolio is a major reason for facing these challenges, especially facing the pressures in the agricultural business sector by focusing on developing our consumer offerings.

He added that Agthia manages its logistics operations with flexibility that allows it to face the inflation caused by the high cost of production, while it has insured against recent geopolitical challenges by expanding its coverage to ensure that the business is immunised against any fluctuations.

Furthermore, Al-Mansoori pointed out that the group’s priority is to provide resources to continue production, as a large part of the group’s success last year is due to the efforts of the supply chain team and the measures it has taken to improve costs and capabilities.

He also stated that the group usually resorts to global initiatives to provide resources — especially wheat from other countries such as India — to combat excessive dependence on a single market in anticipation of any impact on the conditions of the Russian-Ukrainian War, stressing that the group has a strategic stockpile for the rest of the year.

Moreover, the CEO believes that the main challenge facing the group is the continuous availability of the product in the market to the public, and the consolidation of its presence in the 45 countries in which its products are present.

The group’s business is divided into four main sectors — frozen and refrigerated food, snacks, consumer business, and agricultural business.

The company achieved net revenues of AED 2bn in 1H 2022.

The revenues of the chilled and frozen meat and food division amounted to AED 570m, as the strategic acquisitions of two companies specialised in meat production in Jordan and Egypt last year contributed about AED 493m.

The two companies recorded double-digit sales growth compared to the same period last year, driven by increased sales volume and prices.

Meanwhile, revenues of the snacks division amounted to AED 417m, while revenues of the water, beverages, and other food products divisions amounted to AED 475m.

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