• Home
• /
• Corporate
• /
• Business

Al Rawabi to go public in 2 years

Dubai - Dairy products company plans to float 40% stake on Dubai Financial Market

 Al Rawabi Dairy Company plans to float around 40 per cent of its shares on the stock market in the next two years, its top executives told Khaleej Times.
In 2010, the dairy company had announced plans to launch an initial public offering (IPO) but the plan was postponed. Six years ago, the company was valued at Dh1.6 billion, 55 per cent of which was slated to go public.
"We were planning an IPO six years ago. We did the due diligence and strategic planning but the financial markets came down. We then thought it's not a good time. Now, we are planning it again," vice-chairman Abdulla Al Qubaisi said.
Responding to a question about the timing of the IPO and its size, Al Qubaisi said: "May be two years from now or in 2018. The IPO size will be reasonable." Later on, he disclosed that the IPO size could be 30 to 40 per cent of the company. The IPO will be floated on the Dubai Financial Market.
Last week, the diary company had announced an investment of Dh80 million to increase production and market reach in 2016.
"We are mostly investing in automation and the purpose is to produce faster and deliver faster," chief executive officer Dr Ahmed El Tigani said.
Customers want fresh milk and the new investment in automation will minimise the processing time from around 90 minutes to 15 minutes, Dr El Tigani informed.
"The company is based in Dubai and a majority of outlets are 30 minutes away from our factory. So, fresh milk will be delivered within an hour," he explained.
Al Rawabi produces 175,000 litres of fresh juice products and 325,000 litres of dairy products daily, he said.
"The aim is to double the turnover from 2015 levels by 2020 and reach a customer base of over 15,000 stores by the end of 2016 from the current 12,500."
Talking about the company's expansion plans, the chief executive said: "We are planning to go to Nigeria, Morocco, Tunisia, Algiers and Libya by the end of this year." African markets are huge and the company has great expectations from Nigeria and Ethiopia because of the population size, he said.
The company already has operations in Oman and Qatar. Al Rawabi plans to enter Saudi Arabia and Bahrain soon. The CEO said exports currently account for around 40 per cent of its production.
- abdulbasit@khaleejtimes.com