The company bought Al Bayan Purification And Bottled Water, along with Shaklan Plastic Manufacturing, and the Omani firm Al Manal Purification And Bottling Mineral Water, for undisclosed amounts. In a stock exchange filing, Agthia said it expected to close all three deals this month.
Acquisition boosts five-gallon market share
According to media reports, the acquisitions will propel Agthia, which owns the Al Ain and Alpin bottled water brands, to second place in the five-gallon bulk water market. Currently the firm controls around a quarter of the UAE bottled water sector.
“We are very excited to merge our strengths with those of Al Bayan. As a major player in the five-gallon bottled water segment in the UAE, Al Bayan is an excellent strategic fit for Agthia, further consolidating our leading position in the UAE water market,” said Agthia group CEO Iqbal Hamzah.
“Al Bayan’s manufacturing capabilities in the Northern Emirates and Oman with an established brand and sales and distribution infrastructure, coupled with Agthia’s manufacturing expertise, sales and marketing knowledge, and its iconic brands, will help unlock the growth potential of the combined business,” he added.
Drive to the north
Although based in the UAE, Al Bayan has a factory in Oman, and will allow Agthia to expand beyond its current Abu Dhabi-based production base, as well as acquire new customers in the UAE and Oman.
“The Al Bayan Group has grown strongly in the last few years and has diversified business interests. The move to sell our water business across UAE and Oman, is an integral part of our business strategy as it will help focus our efforts towards growing our retail and hospitality businesses. We are pleased that our water business will thrive under the ownership of the Agthia Group,” said A. K. Mansoor, chairman and managing director of Al Bayan.
Agthia chairman Dhafer Ayed Al Ahbabi said: “Al Bayan is a natural fit for Agthia and it complements our portfolio of water brands. This acquisition will further reinforce our leading position in the bottled water category in the UAE, and is a demonstration of our commitment to deliver sustainable profitable growth for our shareholders.”
In 2014 Agthia added new production lines to its Al Ain water operation, increasing capacity by 62% and reducing plastic consumption in the process. In the first six months of this year, the firm saw a 30% increase in sales of Al Ain five-gallon bottles, partly driven by a new online ordering service.
In its first-half results, Agthia recorded 11% sales growth and 20% profit growth compared to the same period last year.