Aujan and Coca-Cola a global force

Aujan Industries, one of the biggest drinks companies in the Middle East, expects to achieve US$1 billion (Dh3.67bn) of sales this year as it expands worldwide through its partnership with Coca-Cola.

Kadir Gunduz, the chief executive and president of Aujan Industries, believes the deal with Coca-Cola will raise the company's profile as he targets more than 17 per cent growth in sales from $850 million last year to $1bn this year.

"We are confident that we will achieve that," Mr Gunduz told The National ahead of the Gulfood conference opening in Dubai today. "The main driver of that growth will be organic growth in our existing markets. We are growing in the GCC and will continue that growth," he said.

Coca-Cola invested nearly $1bn in Aujan in December for a 50 per cent stake in the business, making it one of the biggest investments of its kind in the Middle East.

Aujan produces Rani juice drinks and Barbican, a non-alcoholic malt drink. It also holds regional rights to make and distribute Vimto,a cordial popular during Ramadan. Almost 120 million cases of drinks were sold last year in the Middle East.

The Gulf is becoming an increasingly attractive prospect for global food companies as population growth, job creation and increasing wealth per capita spur demand for consumer goods.

At Gulfood this week, international and domestic food companies are expected to sign fruitful deals.

"Because the deal sizes are so large, we will be talking about hundreds and hundreds of millions of dollars of deals signed [at Gulfood]," says Mark Napier, the director of the Dubai World Trade Centre and organiser of Gulfood.

Mars, one of the world's biggest food manufacturers, last week announced that it would invest $60m in a new manufacturing facility in King Abdullah City, Saudi Arabia, with an additional $150m planned over the next 10 years.

On the same day last year that Coca-Cola invested in Aujan, Carlyle Group, one of the world's biggest private-equity companies, bought into the Saudi group that franchises Domino's Pizza and Wendy's restaurants. Aujan is increasing the capacity of its existing factories in Dammam, Dubai and Iran, investing a total of €100m (Dh482.9m), Mr Gunduz said.

He added that the deal with Coca-Cola would allow the company to sell its brands beyond the 70 countries in which they are currently sold, as well as helping to finance two more factories in the region.

Aujan aims to have its brands available in 100 countries within two years and is currently looking at additional production facilities in Iraq and North Africa, most probably Egypt, said Mr Gundaz.

"This [Coca-Cola] deal will take our brands to the global platform," he said. "With Coca-Cola's distribution network, we see good opportunity for our brands. We believe that this deal will only accelerate our growth."

Aujan is not looking to bottle and distribute Coca-Cola in the region at the moment, Mr Gunduz said.

He added that given long-term cost pressures, all food companies were trying to manage the volatile fluctuations in commodity prices worldwide.

"Obviously a few years back there were violent fluctuations. The [commodities] have never been stable," he said.

The price of sugar, a major cost for a company such as Aujan, has decreased 19 per cent since July, according to the IMF. Mr Gunduz said prices of Aujan's brands would remain stable for the foreseeable future. "We are under cost pressure, but we try to manage that pressure as much as we can.

rjones@thenational.ae

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