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Tuesday, May 30, 2023

Emirati food group Agthia eyes Egypt as export hub

Logo for United Arab Emirates food and beverage group Agthia. (social media)


United Arab Emirates food and beverage group Agthia is considering Egypt as a post-acquisition export hub as part of a regional growth strategy, Agthia Group Chief Executive Alan Smith said on Wednesday.

Agthia, which is majority-owned by the Abu Dhabi government through state investor ADQ, aims to become one of the leading players in the food industry in the Middle East by 2025.

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“Our intention [in Egypt] Now it’s really about taking those acquisitions, consolidating them and unlocking the potential there, and seeing how we can build Egypt as an export hub,” Smith told Reuters.

“We are currently exporting about 60 million dirhams ($16.3 million) from Egypt, but we want to speed up exports because we think there is more potential,” he said.

Last year, Agthia acquired a 60% stake in Egyptian snack company Abu Auf as part of a five-year market diversification and growth strategy. In 2021, it acquired a majority stake in Egypt’s Atyab Meat Company.

Agthia has about AED1.5 billion firepower to spend on acquisitions this year, Smith said.

Turkish companies with export potential are also on Agthia’s radar, he said.

“We obviously want to balance foreign exchange risk between volatility in the Turkish economy and the opportunity to use it as a manufacturing base for exports,” he said.

Agthia’s acquisition strategy is focused on the Middle East, North Africa and Pakistan, but Smith said political and economic turmoil has made Pakistan less attractive.

Agthia reported a net profit of AED 247 million in its audited 2022 results released on Tuesday, up 14 percent from last year.

In 2022, the group’s net income will increase by 33% year-on-year to AED4.07 billion.

“In 2020, about 10-12% of our revenue came from outside the UAE. Last year, it was 51%,” Smith said.

Agthia’s board approved a cash dividend of 8.25 percent of share capital, equivalent to AED65.3 million, down from AED130.6 million in 2021.

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