Gozour

G ozour is a regional multi-category integrated agri-foods platform. The group includes three primary lines of business: agriculture, dairy, and dry consumer foods. Gozour Portfolio Companies include Dina Farms, Rashidi El-Mizan, Enjoy, Elmisrieen, El-Aguizy International and Mom’s Foods in Egypt as well as confectioner Al-Musharraf in Sudan, which owns biscuit and halawa factories and a flour mill.

In Egypt and the region, investment in the agri-foods sector is heavily fragmented. There are very few professionally managed, large-scale investments, which has left the arena wide open for well-financed players to introduce new levels of specialization and economies of scale to the market.

OPERATIONAL UPDATE

Dina Farms is Egypt’s largest private farm with 10,000 feddans and the country’s leading producer of fresh milk with an annual capacity of 64,000 tons (projected to rise to 73,000 tons per annum in 2012) and more than 13,000 head of cattle (of which 6,000 are milking cows). It is a key supplier of diverse fruit and vegetable products both locally and regionally. Dina provides milk to leading local producers of processed dairy products. In 2010, Dina Farms successfully launched a premium line of fresh milk products (centered around a new PET fresh pasteurized milk plant inaugurated in February 2010) and opened six retail outlets in the Greater Cairo Area with plans to grow to 12 outlets by 2012. The milk plant completed the doubling of its capacity at year’s end, which allowed it to add new SKUs to its existing product range. In January 2011, Dina Farms launched the single serve pack in addition to its leading 1-liter flagship pack. Yogurt production at Dina Farms has risen to 35,000 cups per day from 300 cups per day.

Confectioner Rashidi El-Mizan continued to lead the market in the halawa and tahina segments with market shares north of 60% and 80%, respectively, as well as a number-two position in the national jams market one year since the launch of that product line. In 2010 management was also able to rehabilitate the Musharaf plant in Sudan. Musharaf resumed commercial operations in March 2010 and is now the leading halawa brand in Sudan.

Elmisrieen is a popular manufacturer of a variety of cheese products that enjoy strong brand equity on the Egyptian market. The company executed its first TV campaign after being off air for more than 10 years, in addition to giving a facelift to the brand’s logo. This relaunch helped Elmisrieen to grow sales by more than 30%, with an improvement in profitability. Further growth is expected in 2011, despite the market slowdown.

Nile Company for Food Products (Enjoy), Egypt’s second-largest brand of dairy and juice products, which was acquired by Gozour in 2009, has successfully managed grow its top line by more than 25% and recorded a positive bottom line indicating that the turnaround of the company is proceeding comfortably. Management is focusing in 2011 on upgrading Enjoy’s production facility and insuring that the plant operates efficiently. Management is also working on optimizing Enjoy’s existing portfolio of products, with the aim on focusing on the most profitable and discontinuing products with low gross profit.

Gozour announced in November the appointment of Mohammed El-Rashidi as Chairman of the Group and the appointment of Hatem Noweir as Group Chief Executive Officer. Noweir’s main task is to drive strategic planning and the integration of Gozour assets with a view to realizing substantial operational and market efficiencies.

These efficiencies will be particularly important given the challenges now facing the industry as a result of the broader economic slowdown, although Management’s view is that the slowdown in sales of essential foodstuffs such as milk, cheese, produce and meat will be substantially less marked than the broader economic contraction.

As Citadel Capital builds Gozour into the first made-in-Egypt regional foods group, it remains on the lookout for further acquisitions and investment in all three lines of business.