Agthia Group, the Abu Dhabi-based food and beverage group, has announced that it plans to set up a joint venture with Anderson Hay & Grain Co, the number one hay exporter of the United States.
A new company will be formed once the legal process is completed, which will primarily be importing Anderson’s premium forage products for distribution in the UAE and the GCC.
In 2006, the Government of Abu Dhabi decided to gradually ban growing alfalfa and other animal feed grass to conserve the underground water reserves.
To augment the shortfall in local production, the government had entered the global hay importers market, awarding 600 thousand metric tons of hay to importers to be sourced globally. Over the years, the scheme has been extended to benefit farmers across the UAE, and importation of hay reached 2.5 million metric tons per year in 2016.
Launching their first premium forage product under Agrivita Marabe brand, Agthia announced their partnership at the AGRAME exhibition at International Convention Centre in Dubai.
The company said in a statement that the agreement underlines its commitment to support the local farming industry as well as the food security of the nation by providing superior quality feed solutions for the UAE's livestock.
Dhafer Ayed Al Ahbabi, Agthia chairman, said: “This partnership with Anderson Hay is another testament to our commitment to create value for our shareholders and to support our nation’s food security programs. Our combined strength will provide a solid supply and distribution alternative in the UAE and the GCC markets that would be difficult to achieve working independently.”
Mark T Anderson, CEO and president of Anderson Hay and Grain Co, said: “Anderson Hay & Grain is proud to be in the UAE and the Gulf in partnership with Agthia. Our joint venture will join two industry leaders, focused on quality products, strong relationships and customer service. We aspire to be the preferred forage provider to customers in the Middle East.”
Agthia reported net profit of AED254 million in 2016, an increase of 10 percent on the previous year, with net revenues rising by 8 percent to over AED2 billion. The Group’s animal feed business is the largest, representing 33 percent of total revenues in 2016.