CAIRO — One of Egypt's top dairy makers, Arabian Food Industries Co.(Domty), plans an initial public offering (IPO) on the Cairo bourse this year, or early in 2016, its vice CEO said. Mohamed El Damaty said the dairy and juice company had been encouraged by Egyptian foodmaker Edita's listing of 30 percent of its shares in April, which was heavily oversubscribed. He did not say what size Domty's IPO would be. The company has paid-in capital of 50 million Egyptian pounds ($6.6 million). Food is seen as a fast-growing sector in the most populous Arab nation of about 90 million people and is drawing growing investor interest. As well as Edita's IPO, cheesemaker Arab Dairy drew keen foreign interest before being bought eventually in March by Egyptian financial services firm Pioneers Holding. "The offering will be during the last quarter of this year or the first quarter of 2016. It will be through raising the company's capital and selling part of the current shareholders' shares," El Damaty told Reuters. "The (offering) size is not determined yet. EFG-Hermes and Akanar are the offering advisors," he added. El Damaty's family owns 70 percent of the company which was founded in 1989, and a Saudi investor owns the rest. Domty is the latest in a flurry of IPOs, mergers and rights issues on the Cairo exchange since late last year, as economic reforms introduced by President Abdel Fattah Al-Sisi have lifted investor confidence, which slumped during four years of political and economic turmoil since the Arab Spring uprising. Domty has two factories in the 6th October district near Cairo, and plans to start producing yoghurt and cartoned milk, alongside its cheese and juice products. "We need to be on the stock market to finance the coming period's expansions. This is suitable timing, especially after the success of Edita and Juhayna's offerings." Juhayna Food Industries, one of Egypt's largest dairy product and juice makers, listed part of its shares on the Egyptian Stock Exchange in 2010. Stock market gains Egypt's stock market closed flat on Wednesday, as the benchmark EGX30 index inched up 0.01 percent, recording 8,556.55.1 points and a turnover of LE 418.4 million, the Egyptian Exchange data showed. Meanwhile, the small and mid-cap EGX70 index and the broader EGX100 index rose by 0.39 percent and 0.22 percent, respectively. Foreign and Arab institutions were net sellers, recording net flows of LE9.1 million and LE32.1 million, respectively, while local institutions were net buyers, recording net flows of LE42.3 million. The EGX market capital gained LE1.59 billion ($209 million), hitting LE488.73 billion, compared to LE487.14 billion on Tuesday. Meanwhile, Dubai-based electronics retailer Sharaf DG will open its first store in Egypt in the second half of next year, the company's CEO Nilesh Khalkao said. “In 2016, we will open our first store, spanning 18,000 square feet in Mall of Egypt,” he said. Apart from Egypt, Sharaf DG is planning to enter the Saudi market and is studying options on how to set up its operations there. “We have plans to open in Saudi and it will mostly be in Riyadh and Jeddah. It is a different market and we have to be very careful,” said Khalkao. “The biggest challenge in Saudi is how do we bring in the talent because you need to have people based there, we cannot run Saudi operations based here. A lot of brands from the UAE have tried to enter and have failed. You need to have proper technology, a team and a good marketing campaign that appeals to the Saudi population.” Khalkao said that it will be too early to comment on specifics when asked if Sharaf DG will be partnering with other local firms for its Saudi venture. In 2015, Sharaf DG will be opening three new stores in Sohar, Ras Al Khaimah and the Shindagha area of Dubai. The retailer, which competes with firms such as Jacky's, Jumbo and Emax, currently has four stores in Bahrain and one each in Oman and Qatar. — SG/Agencies
