RIYADH: Agthia Group PJSC, one of the leading food and beverage companies in the Middle East and North Africa region, is eyeing a 50 percent annual revenue increase by 2025 through expansion and acquisitions, a top official said.
In an exclusive interview with Arab News, Alan Smith, CEO of the Abu Dhabi-based company, said that purchases have played a crucial role in elevating Agthia Group’s net revenue growth to 4.07 billion dirhams ($1.11 billion) in 2022, a 33 percent rise compared to 2021.
With eyes on further growth, the company now wants to see an annual revenue of 6 billion dirhams by 2025.
“If you go back to 2020, we basically doubled our business in two years from 2 billion dirhams to 4 billion dirhams. I think, interestingly, during that time, we completed six acquisitions as well, which has been a big part of our growth strategy. If we look at the growth in 2022, then a significant proportion of that growth came from our acquisitions,” said Smith.
In 2022, Agthia Group’s net profit also rose 14 percent to 247 million dirhams, while the total assets of the firm stood at 6.8 billion dirhams as of December 31, 2022.
Smith added: “We have just had to adjust our guidance to investors, which we discussed with them yesterday evening. We’ve given an indication that we expect the business to add another 2 billion dirhams of revenue over the next three years, by 2025. So certainly we’re continuing to see the opportunity with the portfolio of businesses we have to continue what has been a pretty exciting growth story.”
According to Smith, the company has successfully diversified its portfolio, which helped the firm’s net operating income grow 39 percent year-on-year to 351 million dirhams.
“We have diversified now into four verticals. So, we used to operate just in our agri vertical, and water and food. Now, we have added snacking and we have added protein. Both of those businesses grew around 75 percent last year,” said Smith.
He added: “The 75 percent growth in snacking came from a combination of the acquisition plus an acceleration organically. So, organically, we grew in snacks around 13 to 14 percent last year.”
Smith further pointed out that Agthia Group has steadily expanded its business outside the UAE over the past two years.
“Back in 2020, 90 percent of our revenues were coming from the UAE. Now, 51 percent of our revenue, in terms of sales, is coming from outside of the UAE. So, we have really diversified our business base,” said Smith.
Smith further pointed out that Agthia Group is very interested in increasing its footprint in Saudi Arabia, a market he described as “super important.”
“We have recently announced that we are building a protein facility in Jeddah. That protein facility represents an investment of between SR80 to SR90 million ($21.31 to $23.97 million). It is actually being built adjacent to our water facility in Jeddah,” said Smith, who went on to say the total business of Agthia Group in Saudi Arabia could be approximately 300 to 350 business dirhams.
He also revealed that the construction works of the protein plant in Jeddah is expected to be completed by the end of this year, and it will be operational by the first quarter of 2024.
Talking about the workforce in the protein plant in Jeddah, Smith said that the facility demands expert help and the company could use talents from Jordan and Egypt to ensure right quality standards.
“We need to leverage the expertise we have in our protein network. But, certainly, we will obviously be very keen to make sure, as we already have in our Al Ain water facility in Jeddah, the right level of Saudization,” he continued.
Smith went on and said that Agthia Group was agile even as inflation exerted pressure on the company’s agribusiness.
He added that amid last year’s inflationary pressure, the company had to ensure it had enough goods, along with improving its operations and product formulation.
“Our number one focus during that period was to make sure that we had supply. We were quite agile in terms of looking at different supply options. We increased our inventory coverage to make sure we always had the ingredients to keep producing and supply in the market. We manage the inflationary pressures through a combination of a few things. One, obviously pricing,” said Smith.
According to Smith, inflationary pressures started softening in the fourth quarter of 2022, and the company is always trying to be competitive in the market.
Smith added that the ultimate aim of Agthia Group is to emerge as the leading regional food and beverage player, and noted the company has a clear strategy to expand its portfolio beyond the UAE.
“We are pretty excited about the future we need. Obviously, it is going to require a lot of work. But I think we have the right team, we have the right capability in the organization. I think we have a track record of having proven what we can deliver on this growth ambition,” he said.