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Dairy firm in UAE says market battle eases sharply
Feb 8th, 2001
After the excesses of the past few years, dumping and price cutting in the UAE dairy industry have eased sharply, according to a senior Al Rawabi official.

"It's definitely a better situation now than what it was earlier. Things are under more control after the dairy producers came together to form the association for the UAE," General Manager Ahmed Eltigani said. "But I will not say the overall situation is excellent."

A similar association of dairy producers has also been set up in Qatar, and another is being formed in Oman. Eltigani, however, declined comment on whether the UAE association's efforts at enforcing a minimum price for dairy products was proving effective. His company claims 28 per cent of the UAE market.

Meanwhile, Al Rawabi will commission its new feedstock plant in Dubai by April. Investment in the facility was Dh25 million, and production capacity is an estimated 30 tonnes a day.

A team from Al Rawabi will conduct a feasibility report on an agro-based facility in Sudan. The company is also considering expanding its dairy and juice capacity from the current 150 tonnes. "We have to make a choice between bringing in cows from America, Australia or South Africa.

We cannot do so from Europe after the authorities' restrictions on dairy cows from there." The company, which earned revenues of Dh150 million last year, has a current herd of about 4,000 cows. According to Al Rawabi, its average yield is 8,000 litres a year against the average 4,500 litres a day for the UAE dairy industry. It has just introduced its juice range in Kuwait and Saudi Arabia.

There are no plans to do the same with the dairy products. "Competition will be too difficult given the subsidies that Saudi producers are getting. It will not be economical for us to be there," said Eltigani. Al Rawabi shareholding is distributed between the Dubai Government, the Arab Authority for Agriculture Investment and Development (AAAID), GIC and leading business groups in Dubai.
Source: The Gulf News 

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08 February 2001 05:11:20 PM

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