Agthia will pursue mergers and acquisitions within the Mena region and Pakistan, seek to improve financial performance and expand into new product categories in its push to become the top regional food and beverage company by 2025.
The company is transforming its operations under a new five-year growth strategy that is built on three strategic pillars: growth, efficiency and developing capability, Agthia said on Monday.
The strategy is designed to extend the group’s market leadership and provide significant value for stakeholders.
The Abu Dhabi-listed company – which is part of one of the region’s largest holding companies, ADQ – is involved in the manufacture, distribution and marketing of a range of food and beverage products, including popular regional brands such as Al Ain water and Al Foah dates.
“The Agthia strategy over the next five years will focus on improving the efficiency of our existing businesses and pursuing new scalable opportunities in our region,” said group chairman Khalifa Al Suwaidi.
The company has made a number of acquisitions in recent months as it vies to expand its footprint and add new verticals to its business.
Its recent acquisitions include Kuwait's Al Faysal Bakery and Sweets, Jordan's Nabil Foods and the world's largest date processing and packaging company, Al Foah.
The company is also buying a majority stake in Egypt's Ismailia Investments, which makes frozen chicken and beef products, the company said.
Agthia is looking to save Dh200 million ($54m) through “synergy extraction as well as simplification of its existing and acquired businesses”, as part of its growth strategy.
"We will follow a disciplined expansion plan focused on the acquisition, integration and scaling of new businesses and create a more effective way to serve and innovate, as we continue to engage with our partners and key customers to leverage their insights in building a stronger portfolio," Alan Smith, chief executive of Agthia, said.
The company will finance new deals through a mix of debt and equity, its chief financial officer Ammar Al Ghoul told The National.
Agthia has cash reserves of Dh700m, as well as a borrowing capacity of more than Dh1 billion to finance any new acquisition, he said.
“Debt currently on the balance sheet of Agthia is less than the cash we have on the balance sheet. That, as a matter of fact, ... increases our borrowing capacity.”
If necessary, the company will also tap bond markets, Mr Al Ghoul added.
Agthia is looking at the possibility of divesting some of its “non-scalable assets” as part of its future growth strategy, according to Mr Smith.
It will sell businesses that "will be a hindrance to delivering best value to our shareholders and investors”, he later told an online media briefing, without saying which assets it plans to sell and when.
The Abu Dhabi-listed company, which reported a 1.1 per cent growth in its 2020 revenue to Dh2.06bn, is bullish on business growth prospects in Saudi Arabia, the Arab world’s biggest economy.
“We are already present in Saudi with our water business, [operating] out of Jeddah," Mr Smith said. "We will continue to focus on how to grow that business and will continue to look at [new business] opportunities.”