Baladna Food Industries (BFI) is eyeing export markets like Libya, Kuwait, Jordan, Mauritania and Iraq as part of its strategy to expand its footprint in the international diary sector.
BFI, whose exports now constitute mere 0.8% of revenues, is already in the process of executing its entry strategy in those markets, said the initial public offering (IPO) prospectus of Baladna, the holding firm of BFI, which began exporting in April 2019 to Yemen, Afghanistan and Oman.
The exports are part of BFI's long-term strategy of extending its footprint beyond Qatar in a range of long-life products (both dairy and non-dairy), it said.
In early 2019, BFI developed a plastic packaging factory to support its in-house plastic packing requirements and potentially sell packaging materials to external parties. The resultant import substitution of bottles and caps has resulted in lower costs of packaging and more consistent stock availability.
The plant has been scoped to have sufficient spare capacity to allow for both external sales in Qatar and exports, it said, adding “BFI has studied potential export markets for packages, beginning with Kuwait. As of September 2019, BFI is in contact with potential customers in Kuwait.”
Baladna had witnessed oversubscription to its IPO through which it had offloaded 75% stake, including 23% to such "strategic" investors as General Retirement and Social Insurance Authority (10%), Hassad Food (5%), Al Meera Consumer Goods (4%), and Mwani Qatar and Widam Food (2% each). The offer comprised 1.43bn new shares at QR1.01 a piece (including listing fees of QR0.01).
BFI, in the prospectus, had said it is increasingly tapping the Horeca (hotels, restaurants and cafe) sector, including airlines, as part of expanding its revenue, in view of the saturation in the retail segment with more than 90% market share.
Stressing that in 2019, BFI increased its sales channels from almost purely retail channels to include Horeca channels, including airlines, it said "the Horeca market presents an opportunity for BFI to increase its revenues domestically."
On the basis of developments in the fiscal period ended June 30, 2019, the founders and senior management expect higher revenue growth to be in the range of 150%-170% for the fiscal year ending December 31, 2019 compared to the fiscal year ended December 31, 2018.
In the medium term, the company currently targets annual comparable revenue growth of 20%-30% and 3%-10% for fiscal year 2020 and fiscal year 2021, respectively, for BFI, driven primarily by the planned launch of new products lines, segments and expansions into new markets.