Profits double at food producer

ABU DHABI // Emirates Foodstuff and Mineral Water Company (Agthia), the parent of Al Ain Mineral Water, almost doubled its net profit last year. The food and beverage group, based in Abu Dhabi, said revenue last year rose 48 per cent to Dh854 million (US$232.5m), up from Dh579m in 2007, while net profit increased to Dh72.5m from Dh38.1m. "This performance is attributed to higher volume, pricing and the inclusion of the frozen vegetable and tomato business [which was] acquired in Jan 2008," said Ilias Assimakopoulos, the chief executive of Agthia. Agthia subsidiaries include Al Ain Vegetable and Tomato Paste, and Grand Mills for Flour and Feed. Mr Assimakopoulos said Agthia had not yet felt the impact of the slowing global economy. "However, the credit crunch might possibly impact our ability to borrow funds in the future to finance our expansion or acquisition plans." Last year's pace would be difficult to match, but Agthia still expected strong growth in the coming year, he said. Although sales in other segments of the retail market have been hampered by the global financial crisis, analysts say the food sector in the UAE is poised for growth. Lyndsey Anderson, the head of food and beverage research for the UK-based Business Monitor International (BMI), said per capita food consumption in the Emirates would increase 18.8 per cent by 2013. "Growth in the UAE is still impressive, in spite of the rapid development the industry has undergone and the level of disposable income growth that the country has enjoyed," she said, adding the growth would be driven by higher volumes and by customers switching to premium brands. Masafi, the food, juice and mineral water company, also reported strong results for last year. The company said last month that net profit rose 36 per cent, while net revenue jumped 35 per cent to Dh378m. The demand for fresh fruit and vegetables is also increasing, with imports in Dubai rising almost 40 per cent to more than $1 billion since 2007, according to a research report last year commissioned by Planet Fair, a local expo organiser. The growth stems from Dubai's population growth of mostly expatriates hungry for foods from their home countries, according to the organisers of World of Perishables, the first regional exhibition for fresh fruit and vegetables to be held in Dubai next month. BMI forecasts the grocery retail sector in the UAE will grow more than 80 per cent in the next five years. The latest addition to the UAE's supermarket offerings will be a 10,000-square-metre hypermarket in Abu Dhabi by the French retail giant, Carrefour. The anchor store, announced on Sunday, will be built as part of Deerfields Town Square, a Victorian-themed mixed-use development scheduled for completion next year. The high-end grocery chain, Waitrose, has also entered the UAE market in its first venture outside of the UK. In the past four months, the retailer has opened two stores in Dubai - one in Dubai Mall and the other in Dubai Marina Mall. In June last year, RAK Holding unveiled plans to open its own grocery store chain, called Near Buy. Kamal Vachani, a director of Al Maya Group, which has 22 supermarkets across the UAE, said sales continued to be strong and the company planned to add at least three stores this year. "As far as supermarkets are concerned, there are no slow trends yet," he said. "And if all goes well, we think we should be able to do well this year." aligaya@thenational.ae