Agthia boss tackles ‘turnaround’ snags

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AGTHIA faces crippling raw material costs.

Emirates Foodstuff & Mineral Water Company PJSC (AGTHIA) plans to become a key player in the packaged fruit and vegetable market, as part of its drive for profit growth.

CEO Ilias Assimakopoulos said the Abu Dhabi-based company acquired Al Ain Vegetable Processing & Canning Factory last month based on its strong brand equity among UAE nationals, its manufacturing capabilities and "ample room for growth."

"We plan to deliver cost savings from integration synergies, as well as build on the existing platform to enhance our competitive position by strengthening and improving our product offer," he said.

"However, we are also facing the challenge of maintaining profitability despite the ever-rising raw and packing material prices coupled with local inflationary pressure. With such a diverse and rapidly evolving population, another key challenge is to keep on being relevant to your target group."

Assimakopoulos said the acquisition of the tomato paste and frozen vegetable brand, to be added to AGTHIA's portfolio as a standalone division, was a strategic move to enter the category, "not only in the UAE, but internationally."

"It also offers us the platform to expand into other food and beverage segments," he said.

He admitted the company will consider expansion into other "profitable, fast growing categories," to expand its reign in the packaged fruit and vegetable sector, and revealed the company's two-tier strategy of financial and strategic turnaround has been developed in a bid to become the best food and beverage company across the emirates.

"We have been quite successful accelerating our sales and profit growths, which can be seen in our year to date September results, which delivered 29% and 22% respectively, and the outlook for 2008 is positive.

"We have also executed initiatives for strategic turnaround including new product development, acquisitions and diversification to further improve our sales and profitability to deliver superior, sustained return to our shareholders," he added.

Prior to the latest acquisition, the group was focused entirely on Al Ain Mineral Water and Grand Mills for Flour and Feed, the latter concentrating largely on bakeries in the foodservice channel. He said Al Ain's teams for water - currently holding a 22% market share in the UAE - and vegetables are currently working in close partnership with retailers to roll out "relevant promotions," maximise display and enhance visibility and category exposure.

The firm's marketing campaign for its Al Ain Mineral Water brand using the tagline ‘Enjoy the change' tagline at the end of the last year achieved considerable success.

The move resulted in increased volume sell-through, growths in market share across the UAE, and increased Spontaneous and Top of Mind consumer awareness.

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