The Abu Dhabi headquartered company, which manufactures and distributes the Agrivita portfolio of feed products, reported net sales of AED 259.7 million ($70.7m) in the first three months of 2014, up 11% on the same period last year.
Net profit was AED 58.8m, an increase of 35% year-on-year, resulting from higher volumes and improved margins.
“Performance across all animal feed categories was encouraging. The business saw strong sales and profit growth. Improvement in gross margin resulted from lower input costs, production efficiencies and favorable product mix,” said the leading Abu Dhabi feed producer.
Risk management boosting profit
Iqbal Hamzah, chief financial officer of the Agthia group, told FeedNavigator that savings were made through its feed and food inputs risk management team:
“Agthia has a commodity risk committee which meets once a month where we review market intelligence. This includes evaluating global weather, harvests and investment fund trends. Based on these findings we take decisions how much to buy, when, and from where.
So far, we have bought at advantageous prices compared to the market average.”
In terms of cost saving initiatives during the quarter, Hamzah said the agri-business unit improved its feed product formulation and further enhanced the efficiency of its production.
Government policy has also supported buoyant results Agthia’s feed division.
“We have seen a recent growth in the poultry industry driven by the UAE Government’s strategy of increasing self-reliance and decreasing imports,” said Hamzah.
The agribusiness division contributes about 63% of the group’s revenue, said the company in February as it rebranded its animal feed portfolio under the Agrivita brand. The feed products were previously sold as Grand Mills Animal Feed.
“Animal feed products are now marketed under the brand name Agrivita to identify and enhance Agthia’s continuous presence as a pioneer in the animal feed industry in the Gulf Region,” said the firm.
The company produces over 50 types of animal feed products targeting the poultry and ruminant sector including camels.
Agrivita said the rebranding was part of an aggressive strategy of consolidation in the local and regional animal feed market, and the group said it is working proactively with farmers on product development as well as on nutrition awareness programs.
UAE food security
Meanwhile a leading investor has warned the UAE not to make the same mistakes as other nations when it comes to food security.
Syed Tariq Husain, CEO of Emirates Investments Group, said that robust investment in agricultural research, and development from both the public and private sectors, are vital for the ongoing growth of food industries.
Husain said that the investments need to be made in research, science and technology to lay a foundation for improved agricultural productivity, reduced waste and a healthier and safer food supply.
"Countries such as Saudi Arabia have made mistakes in the past by investing in projects like wheat and cattle farming, which are highly water intensive and not sustainable," Husain said.
"We need to explore alternatives, for example investing in agricultural land abroad or leasing land to a professional who can manage it more efficiently with better practices."
Fish farming in the Gulf
The UAE region has recently seen investments in fish farming, as aquaculture proves to be the fastest-growing food industry sector in the Gulf, according to an agriculture industry expert.
“Aquaculture is the fastest growing food processing industry in the Middle East, with the most recent fisheries’ data indicating that farmed fish output across the region has grown five-fold in a ten year period, from 194,000 tonnes in 2002 to 1.1 million tonnes in 2011,” said Richard Pavitt, exhibition director at Agra Middle East, back in February.
Last year saw Emirates AquaTech launch the largest fish farm in the world.
The 56,000 square metre Emirates AquaTech Caviar Farm can produce up to 700 tonnes of sturgeon meat, and 35 tonnes of caviar, per year. The caviar will be marketed under the Yasa Caviar brand.
Emirates AquaTech chairman Mohammed Hazzam Al Dhaheri said: “Our inspiration was to contribute to [the Abu Dhabi rulers'] long term strategy set out in Abu Dhabi Economic Vision 2030 and to play a role in building of a sustainable, diversified and value-added economy.”