Agthia set to enter KSA's retail wheat flour market

Abu Dhabi - In an interview with Khaleej Times, the chief executive said Agthia has the total capacity to mill 310,000 metric ton of wheat flour and 85 per cent this production capacity is currently utilised, he said.

Abu Dhabi's food and beverage giant, Agthia will make forays into the lucrative Saudi Arabian retail wheat flour market this year.
"We are planning to market wheat flour into the Kingdom, which is one of the biggest market in terms of volumes," said Iqbal Hamza, chief executive officer of Agthia, which is listed on Abu Dhabi Securities Exchange.
In an interview with Khaleej Times, the chief executive said Agthia has the total capacity to mill 310,000 metric ton of wheat flour and 85 per cent this production capacity is currently utilised, he said. The company will put into use 15 per cent idle capacity and export into Saudi Arabia, which is 46,500 metric tonnes.
And once the company is close to utilising this installed production capacity, the food production company will expand its manufacturing capacity in 2018, the chief executive said.
The food company is working on several new products to be launched in the coming quarters for the customers in the domestic market. The products range includes water, beverage, dairy and bakery.
"Agthia's Al Ain Water plant is also running on full capacity," Iqbal Hamza said, and to meeting the growing needs of the market, the second production line would be ready towards the second quarter next year. The food and beverage company has a budget of Dh200 million for capital expenditure, which is not consumed fully as yet. However, for the next year, the allocation has been substantially increased to Dh250 million, he said, to buy-out more companies and carry-out expansions at the existing facilities within the country, he said.
The company is looking for buyouts within the country, on priority where he believes there were some white spots to be captured in Northern Emirates.
"We are looking for some more acquisitions. They are one of our main growth drivers," he said. Hamza said the company is looking at opportunities in the water, dairy and juice segments of the business, where it wants to expand its market share. He won't say whether any potential company is being negotiated or shortlisted. "We keep on looking for the right and synergistic target at right price," chief executive said. Last month, the beverage maker acquired Al Bayan Water's bottling plant in the Northern Emirate to enter into five gallon bulk water containers market.
The company currently ranked sixth in terms of market share in the business. With the acquisition, the company will boost its share to second biggest stake holder in the business. Apart from this enhanced market share will come, the company infrastructure in the area as well as in Oman to benefit Agthia which wants more presence there, he said. Al Bayan's manufacturing capabilities in the Northern Emirates and Oman with an established brand and sales and distribution infrastructure, coupled with Agthia's manufacturing expertise, sales and marketing knowledge, and its iconic brands, will help unlock the growth potential of the combined business, the chief executive said.
The Al Bayan acquisition, is a strategic fit, and complimentary to its business in Abu Dhabi. "This acquisition is part of "Agthia's plans to be the top three players in the UAE by 2020, in the category it has chosen to play," the chief executive said.
Last week, Agthia's revenues rose 12 per cent year-on-year to Dh1.4 billion for the nine-month period. The net profit was Dh179 million, an increase of 19 per cent year-on-year.
- haseeb@khaleejtimes.com