Volume-led growth: Agthia doubles down on product innovation and protein production investments
Agthia recently announced its H1FY2024 financial results, reporting a 14.7% year-on-year growth in revenue to AED2.53bn (US$) and a 31.8% year-on-year growth in net profits to AED190mn (US$).
“We are very pleased that this growth has largely been driven by volume (i.e. sales and new product innovations), and just 3.5% from pricing,” Agthia CEO Alan Smith told the floor at the firm’s H1FY2024 financial results presentation.
“Over AED92mn (US$) in revenue was generated from strategic product innovation in this time across all of our major categories.
“For example in Snacking we launched a new organic dates range and chocolate-coated nuts and the Abu Auf snack brand also launched instant coffee jars and espresso beans as well as savoury popcorn, crackers, protein bars and more.
“Our Protein and Frozen business launched a new range of chickens strip products under the Nabil brand in Jordan, as well as several new Al Ain-brand RTH products, pizza and pasta sauces in the UAE.
“Other important developments have included a 32% growth in our new plant-based water bottles, as well as a 48% growth in glass bottles and 27% growth in recycled PET bottles.”
Agthia also recently opened a new AED90mn (US$25mn) Protein facility in Jeddah, Saudi Arabia in July 2024 in hopes of capitalising on the rising demand for protein products in the region.
“We consider this facility as an important landmark to enable our growth for the future,” Smith said.
“The build-up area for this is around 6,600 square metres and the facility is expected to produce 6,500 to 8,700 tons per annum, covering around 50 of our protein SKUs.
“The plan is to strengthen our footprint in the KSA (Kingdom of Saudi Arabia) market, to cater to strong local demand and leverage our strong QSR relationships there to drive the growth of our key protein vertical.”
The firm previously had also highlighted its plans to move from a UAE-centric strategy to a more international one in hopes of building a stronger global presence by 2025, and updated that it is leveraging its Egyptian platform to build up its export capabilities.
“One of our key strategic pillars around our Egyptian platform is exporting, in order to [provide some] insulation from foreign currency impacts – and in the first half of the year, we drove AED50.7mn of export revenue from Egypt, which is 53.6% up on the same period last year,” he added.
“We view this Egypt platform as a competitive advantage, and brands are doing well here despite the macroeconomic volatility – Aryab grew 5.8%, Abu Auf grew 40.1% and Al Ain Egypt grew 75.5% in AED terms.”
Snacking exports
Overall, the firm is still seeing its Snacking business to be its fastest-growing profits generator, particularly with its dates products, so there is no intention to slow down in this area either.
“If you look at our business unit that's growing the fastest [and is the] most profitable, it is our snacks platform that's helping us in that space, driven by the continued growth in our dates business,” he added.
“And our dates business really has been around about increasing our geographic footprint, so [a major strategy is to] increase our level of exports.
“So we're growing various markets very fast such as India, Indonesia, Malaysia, Bangladesh, the Muslim Market in the Far East and so on - but we're also at the same time expanding into new markets whether that be Europe, the US, Brazil, or even into Mexico.
“There are many new opportunities, new markets and in many cases new categories in these markets that give us an opportunity to improve the uh the overall mix in the business.”
