The Emirati Agthia Group is exploring new investment opportunities in Egypt over the coming period, alongside exploring a number of investment opportunities in the Middle East.
Group CEO Mubarak Al-Mansoori said the Egyptian market is an attractive sector for investment and benefits from 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 1.1 billion which will enable the implementation of many acquisitions in the coming period, noting that the company can also borrow up to AED 1.5 billion as net debt yielded about 2.4 times earnings at the end of the first half (1H) of this year.
He also explained that the group’s acquisition strategy is based on the study of available acquisition opportunities and not on the markets, adding that the group has a number of criteria in the companies it aims to acquire, including brand strength, population density of the country it is intended to enter, as well as future growth opportunities.
With changing consumer behavior around the world, being selective with 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 is particularly focused on the frozen food sector and the healthy snack sector, noting that Agthia acquired Al-Foah, which is the largest producer of dates in the world, exporting its products to 45 countries around the world.
The group has also already made a number of acquisitions in 2021 for more than AED 2.3 billion and recently acquired a roughly 60% stake in Egyptian Abu Auf.
In addition, Al-Mansoori said the company’s strategy for the rest of 2022 is based on integrating and improving the activities of the group’s subsidiaries, stressing that the company is looking to develop small spending plans. capital to improve its operations.
He pointed out that the focus on improving the level of integration between the activities of the group companies will achieve the best possible returns at the current stage to strengthen the presence of food products in the markets where it is located, stressing that the group is working on the integration of activities between Atyab and Nabil Foods, which operate in the frozen meat sector.
Furthermore, he said that Agthia exported 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 meat sector, and that the group aims to increase this share in 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 a good experience in the Egyptian market, and the challenges facing Agthia are similar to the challenges of all economies in the world, which are represented by inflation, changing consumer preferences and uncertainty about future food prices.
He pointed out that the group is capable of meeting challenges and developing appropriate strategies to deal with them.
“In our view, Egypt has enormous potential and a large consumer market, and the acquisitions we have made in Egypt to date reflect enormous potential for expansion and significant opportunities to consolidate our presence in the country,” he said.
Regarding 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 to face these challenges, especially in the face of pressures of the agricultural business sector with a focus on developing our consumer offerings.
He added that Agthia manages its logistics operations with a flexibility that allows it to cope with inflation caused by the high cost of production, while insuring against recent geopolitical challenges by expanding its coverage to ensure that the company is immune to any fluctuation.
In addition, Al-Mansoori stressed that the group’s priority is to provide resources to continue production, as much of the group’s success last year was due to the efforts of the supply chain team and the measures it has taken to improve costs and capacities. .
He also said the group typically uses global initiatives to provide resources – particularly wheat from other countries like India – to combat over-reliance on a single market in anticipation of any impact on the conditions of the Russian-Ukrainian war, emphasizing that the group has a strategic stock for the rest of the year.
In addition, the CEO believes that the main challenge facing the group is the continued availability of the product on the market for 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 chilled food, snacks, consumer trade and agricultural trade.
The company achieved a net revenue of AED 2 billion in the first half of 2022.
Revenue from the meat and chilled and frozen food division was AED570 million, with strategic acquisitions of two meat companies in Jordan and Egypt last year contributing around AED493 million. AED.
Both companies posted double-digit sales growth compared to the same period last year, driven by an increase in sales volume and prices.
Meanwhile, revenue from the snacks division amounted to AED417 million, while revenue from the water, beverages and other food divisions amounted to AED475 million.