Abu Dhabi-based food and beverage company Agthia is expanding further in Saudi Arabia with a greenfield investment worth Dh90 million ($24.5m) that will be used to set up a manufacturing unit in the kingdom.
Capital expenditure spending on the new unit in the Red Sea port city of Jeddah is expected to start in the coming months, with sales expected to start in the second half of 2023, Agthia said on Tuesday in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.
The company’s board approved the investment related to the project during a board meeting.
“Agthia’s greenfield investment in the kingdom of Saudi Arabia would enable significant progress towards our long-term profitability target and our commitment to deliver on our growth strategy to become a regional leader by 2025,” said group chairman Khalifa Al Suwaidi.
Agthia, which is owned by Abu Dhabi’s holding company ADQ, is transforming its operations under a new five-year growth strategy in its push to become the region's top food and beverage company in the next three years.
The company completed a number of acquisitions last year to expand its operations in the Mena region.
They include the world’s largest date processing and packaging company Al Foah, Kuwait’s Al Faysal Bakery and Sweets, Jordan’s Nabil Foods, Egypt-based meat processor Ismailia Investments, better known as Atyab, and snack maker BMB Group.
“This investment will allow us to further drive the growth of our protein vertical while offering the right product quality compliant with local regulations,” said Alan Smith, chief executive of Agthia Group.
“The site design will also give us the capacity and flexibility to meet future market growth potential and will eliminate any future replacement cost in case of expansions.”
Agthia manufactures, distributes and markets a range of food and beverage products, including popular regional brands such as Al Ain Water and Al Foah dates.
The company’s assets are located in the UAE, Saudi Arabia, Kuwait, Oman, Egypt, Turkey and Jordan.
The company will continue to look for new businesses to acquire in 2022, Mr Smith said in an interview with The National earlier this year.
Agthia has Dh1.5bn worth of “firepower” for the purchase of companies in the Middle East, Africa and Pakistan.
However, it “really depends on whether they meet the criteria that we set out in terms of being accretive, being at the right price, being in the right categories and in the right markets”, Mr Smith said.
Agthia reported a 64 per cent jump in its first-quarter profit to more than Dh82m as revenue rose by 58 per cent.