Al Ghurair Investment considers acquisition of food company Mena to strengthen its portfolio

Al Ghurair Investment, the holding company controlled by the Al Ghurair family, is looking to acquire more food-related businesses in the wider Middle East and North Africa region to expand its portfolio, the managing director said of the group.

One of Dubai’s oldest family-owned businesses, the group is exploring several buying opportunities but has yet to make a decision, John Iossifidis said. The National.

“We are always open to looking for investment opportunities,” he said. “There is always something going on… something being considered but there is nothing in preparation at the moment in terms of agreement.

Although the group’s interests include engineering in the mobility and energy sectors across more than 20 operating companies in a diversified portfolio, the food and grain crushing businesses are “primarily areas of interest. in terms of inorganic growth, ”according to Mr. Iossifidis.

“We are looking to expand, especially in the GCC and Mena region if and when opportunities arise.

“The group is financially strong and we have had no difficulty finding the capital for the opportunities that we have really identified.

AGI, along with its consortium partners Al Rajhi Holdings Group and UAE-based Masafi, finalized the acquisition of a flour mill in Saudi Arabia earlier this year.

The deal to fully acquire Third Milling Company from the Saudi Grains Organization was worth around $ 200 million, according to reports. In June, AGI also purchased Jebel Ali Edible Oil Company, a multi-seed crushing plant, from Dubai Investments Industries for an undisclosed amount.

AGI’s subsidiary, Al Ghurair Foods, has an annual capacity of over 1.5 million metric tonnes and operates silos with storage of 230,000 metric tonnes for its wheat milling operations alone. Its associated companies also own and operate an oat mill, rice mill, animal feed factory and one of the largest poultry farms in the United Arab Emirates.

Mr Iossifidis, who served as managing director of sharia-compliant lender Noor Bank from 2017-2020 before joining AGI, is optimistic about the growth prospects of the food sector and related businesses with the accelerated pivot to food security in the world. ‘whole region of Mena.

“We see the region as a whole focusing a lot more on food and food security,” he said. “Investments and the continuation of the [growth options] in food and food security is [also] consistent with the UAE’s strategy as well… its future plans and is aligned with the UAE initiative ($ 82 billion) ”.

The GCC imports between 80 and 90 percent of its food needs, according to UK think tank Chatham House. Improved food security is one of the top priorities for the United Arab Emirates, the second-largest Arab economy, which aims to reach the top spot in the World Food Security Index by 2051.

Food consumption is expected to increase at a compound annual rate of 2.3% to reach 52.4 million metric tonnes by 2025 in the GCC, with more emphasis on domestic production. Consumption will be driven by Saudi Arabia and the United Arab Emirates, accounting for more than 76% of the total share by 2025, according to a report from Alpen Capital.

Evolving from a small commercial enterprise in the 1960s, AGI is now an umbrella company in sectors such as energy and refining, engineering, trading, real estate, food, construction and construction. Its ventures arm includes the group’s printing and publishing, retail, education, automotive services, foreign exchange, travel and mobility businesses.

In recent years, AGI has also focused on affordable housing in the Deira, Bur Dubai and Al Barsha areas of Dubai. “The number of units has actually doubled in recent years, to over 5,000 units,” said Mr. Iossifidis.

The group is investing heavily in digitization, cloud operations and AI capabilities to bring one of the UAE’s oldest family businesses into its next phase of growth, Iossifidis said.

“What has changed in the wake of the pandemic is the drive to digitize, the drive to innovate and the drive to embrace sustainability. There has been a strong push for digitization and automation as well as the use of data [for more informed decision-making]. “

AGI, which employs more than 28,000 people, plans to generate at least 25% of its revenues and profits from “new businesses and initiatives” by 2025, Mr. Iossifidis said.

The company pursues a “three-horizon” approach to growth. The first step is the expansion of existing businesses. The second is to strengthen its small businesses to better compete with the biggest players in the market, while the third deals with expansion through “pure experimentation” in areas where it is not present at the moment.

Agricultural technology and vertical farming is “something we’re looking at, but it’s not something we’ve actually invested in yet,” Mr. Iossifidis said.

At least three of the group’s subsidiaries are also studying 3D printing options to strengthen its engineering, construction and subcontracting activities, he added.

The company also plans to transform its mobility business and increase the percentage of e-hailing trips for its Al Ghurair Cars Taxi, one of the largest taxi service providers in the country.

“Even today, 80 percent of the business is still online and 20 percent is online. In 2025 we see it closer to 50-50 and in 2030 we see it is the other way around: 20% street calls and 80% electronic calls, ”Iossifidis said.

“So you have this evolution and you have the VE [electric vehicles] and clean energy requirements… our strategy is being developed and revised as to where we want to go for this business.

Update: September 23, 2021, 6:28 a.m.

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