Abu Dhabi’s Agthia to increase production of Al Ain Water

The Abu Dhabi food and drinks company Agthia is set to increase production of its bottled water and open a new baked goods facility in the second quarter of this year as it strives to keep up with demand for its existing products and entice customers with new lines.

Agthia, which was founded in 2004, has an agri-business division that produces flour and animal feed, and a consumer business division that produces and distributes Al Ain Water, Capri Sun juices and Yoplait dairy goods.

The company has invested about Dh750 million in the past seven years into its factories, transport vehicles, manpower and quality control, according to Fasahat Beg, general manager of the consumer business division.

The water and juice are produced in Al Ain and the yoghurt in Abu Samra, and the baked goods plant will be in Al Wathba.

“We cannot keep up with demand right now,” Mr Beg said at the Gulfood show in Dubai this week. “We have new, long-term manufacturing strategy that is being put into place right now.”

The new facilities will increase capacity by 60 per cent to 52 million cases of bottled water a year from 32 million cases today. Total investment in the expansion amounts to almost Dh90m. As well as supplying its water to retail customers, Agthia also supplies the Government, municipalities, major airlines and hotels.

The Abu Dhabi Government owns a 51 per cent stake in Agthia and as a result the company is involved in helping it meet its food security targets.

“The Government has identified a number of commodities and products in which they want to hold inventories,” said Mr Beg. “Bottled water is one.”

Agthia has also invested as much as $16m in its new baked goods factory. “We started building that nine months ago and hopefully, by mid-year, we will be supplying the market,” Mr Beg said.

Agthia’s basic bottles of water, juice sachets and yoghurt cost about Dh1 each and Mr Beg would like government-controlled prices to increase by as much as 7 per cent to keep pace with rising costs of raw materials and investment.

“We are managing to insulate ourselves and still delivering very good results but part of that is being quite frugal in terms of costs,” he said. “We are still continuing to lobby the Government in terms of taking some price increases, which are absolutely necessary. They have to increase; not exorbitantly but in line with what we are experiencing in economic costs of business perspective.”

lgutcher@thenational.ae

Follow us on Twitter @Ind_Insights