Dubai poultry firm Al Rawdah to expand into new markets

El Rashid Dafalla Mohamed, the chief executive of Al Rawdah, said there would be no price rise on their products next year when VAT comes into effect. Victor Besa for The National

The Dubai-based poultry company Al Rawdah expects to expand into Iraq and Africa, and increase production capacity as the UAE poultry sector prepares to absorb the cost of value added tax to be introduced next year.

Al Rawdah expects its turnover to rise between 7 to 10 per cent this year after increasing 8 per cent to Dh200 million last year, said El Rashid Dafalla Mohamed, the chief executive of Al Rawdah.

He was speaking on the sidelines of the 22nd edition of Gulfood, the annual five-day food industry exhibition in Dubai that ends tomorrow.

“There would be no price rise of our products next year as we expect to absorb the value added tax [VAT],” he said. “But we are saving by reducing our costs through more feed-efficient breeds of chicken, energy saving through the use of solar panels and water efficiency.”

The strong dollar could make Al Rawdah products more expensive in some of its export markets such as Jordan and Lebanon but as essential food items, the impact on the company is expected to be minimal, Mr Mohamed said. Al Rawdah markets eggs, fresh and frozen chicken, meat products and ready meals.

This year, the company, which is part of Emirates Rawabi Group, expects to enter Iraq, Sudan, Egypt and Ethiopia.

It has spent Dh25 million in upgrading its Dubai factory and already invested Dh60m in its Dh400m Liwa factory that is still under construction. Its new machinery in the Dubai factory would increase the production of its chicken meat products by 25 per cent this year.

Its Liwa factory would produce 30 tonnes per hour of animal feed by the end of this year, when the first construction phase is due to be completed. Half of the feed would be for chicken and the rest for large animals such as camels, cows, goats and sheep.

The Dubai-based Al Kabeer poultry brand also expects to tap into new export markets such as Lebanon and Jordan and introduce at least three new products in the next quarter, said Rishi Srivastava, the group marketing manager of Sahar Enterprises, which distributes its products under the Al Kabeer brand name.

It expects to open its processing plant in Jeddah in April to meet the demand of the growing Saudi market, especially during Haj and Umrah. The company imports raw materials and processes frozen chicken, meat, fish, vegetables and ready meals at its factories in Sharjah and Dubai. It also has a factory in Noida, India.

Plans for the 50 million riyals (Dh48.9m) Saudi factory, which has a production capacity of 2,000 tonnes, was first announced in 2012.

With VAT, Al Kabeer expects to absorb some of the price hikes while expecting the authorities to allow some increase in prices.

The UAE poultry market is expected to touch US$1.14 billion in sales next year, up from an estimated $1.06bn this year, according to the research company Euromonitor International. The poultry market includes fresh uncooked and unprocessed chicken, duck, goose, turkey and guinea fowl.

Among the top five companies in the UAE segment are Al Kabeer, Dubai-based Al Islami Foods, Kuwait’s Americana Group, BRF Brasil Foods and Dubai’s Freshly Frozen Foods.

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