Dubai-based dairy products and fresh juices maker Al Rawabi Dairy Company will expand into Bahrain and Kuwait, utilising the proceeds from its planned initial public offering, said its General Manager.
"We are planning to go to Bahrain and probably to Kuwait," said Dr Ahmed Eltigani, General Manager of Al Rawabi Dairy. "But we cannot go to Saudi Arabia because of the costs; we cannot compete with them. They have some kind of indirect subsidies such as cheaper electricity and fodder prices. We pay three times more for the fodder. For electricity, they [Saudi firms] pay only three fils while we pay 35 fils here. This is a big difference. We simply cannot compete with them."
Al Rawabi will raise Dh1.6 billion through initial public offering next year, offloading 55 per cent stake on the Dubai Financial Market.
In terms of revenues, he said the company has been growing 15-20 per cent year-on-year and sees its revenues growing from Dh400 million in 2009 to Dh420m this year.
"We are growing year-on-year 15 per cent and will continue to grow in terms of revenues and sales. We had Dh400m in revenues last year. This year, we are expecting it to be around Dh420m. Notwithstanding the decline in population, Al Rawabi will be able to achieve this target, because we have changed the strategy and introduced new products, which have no competition. This will push more market share for us," said Eltigani. When asked if local dairy product manufacturers are discussing the dumping by Saudi firms in the UAE with the Ministry of Economy, he said the ministry believes in offering opportunities to producers of all GCC countries.
"It's a policy for the whole country. They can't do anything. The good news for the local companies is that Al Rawabi is No1 in Dubai and the Northern Emirates.
By Waheed Abbas
© Emirates Business 24/7 2010
