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UAE’s Agthia Working on New Acquisitions in Egypt, Expansion in Saudi Arabia

Agthia Group said it is working on a new acquisition in Egypt, in addition to expanding in Saudi Arabia. (Agthia)
Agthia Group said it is working on a new acquisition in Egypt, in addition to expanding in Saudi Arabia. (Agthia)
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UAE’s Agthia Working on New Acquisitions in Egypt, Expansion in Saudi Arabia

Agthia Group said it is working on a new acquisition in Egypt, in addition to expanding in Saudi Arabia. (Agthia)
Agthia Group said it is working on a new acquisition in Egypt, in addition to expanding in Saudi Arabia. (Agthia)

The UAE Agthia Group said that the total value of the acquisitions it carried out in 2021 exceeded AED2.3 billion ($626 million), adding that it is working on a new acquisition in Egypt, in addition to expanding in Saudi Arabia.

Alan Smith, CEO of the Agthia Group, said the group aims to expand geographically, most notably in Saudi Arabia and other markets, such as Egypt and Pakistan, noting its acquisition of 60% of the Abu Auf Group in Egypt.

He stated that Agthia will invest nearly AED90 million ($24.5 million) in its expansion plans in Saudi Arabia to establish a new industrial facility within the premises of Al Nabil Food Industries in Jeddah.

Smith stressed that the group is expected to start investing in the construction of the new facility in the coming months.

According to the Emirates News Agency (WAM), the investment spending process on the new factory is scheduled to continue until 2025.

The initial investment at this stage is estimated at AED65 million ($17.6 million), Smith said, adding that expanding in Saudi Arabia is considered a strategic investment in the GCC’s largest market.

Agthia could carry out its planned acquisitions in line with its long-term strategy, he remarked, underlining the group’s ability to finance further acquisitions, which will go ahead if they meet its strategic criteria.

On the group's plans for H2 2022, Smith said its focus will remain on integrating the companies’ businesses, bolstering their work, and achieving the maximum and optimal benefit from mergers, some of which may include secondary investment plans aimed at boosting the efficiency of the group’s operations.

He pledged to continue to fulfill the group’s promises towards diversifying its business, and creating opportunities for growth.

Agthia’s net profit attributable to shareholders grew to AED118 million in H1 2022, a 74% increase relative to H1 2021, despite the challenging global inflationary environment.

This performance reflects the impact of the group’s recent acquisitions, as well as its cost optimization efforts as part of its five-year growth strategy.

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Saudi Arabia's Digital Advertising Boom: Addressing Economic Leakage, Boosting Local Content

A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
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Saudi Arabia's Digital Advertising Boom: Addressing Economic Leakage, Boosting Local Content

A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
A digital advertising event recently held in Riyadh (Asharq Al-Awsat)

Saudi Arabia’s digital advertising sector is experiencing rapid growth, but a significant portion of its revenues is leaking to foreign platforms. To maximize the impact on the national economy, experts are calling for strategies to curb this outflow and redirect it to local channels.

The importance of retaining digital ad revenues lies in the substantial size of this market. It is estimated that approximately $1 billion in ad spent is lost annually to foreign platforms, representing a considerable loss to Saudi Arabia’s economy.

Dr. Ebada Al-Abbad, CEO of Marketing and Communications at Tadafuq, a Saudi digital advertising network, told Asharq Al-Awsat that the problem stems from the fact that although advertisers, products, and audiences are often local, the largest share of financial gains goes to foreign platforms. He estimated that 70-80% of the $1.5 billion spent on digital advertising in Saudi Arabia in 2022 went to global platforms such as Google and Facebook. This results in the national economy losing nearly $1 billion annually from this sector alone.

Al-Abbad noted that government agencies in Saudi Arabia also contribute to the outflow. He explained that public sector spending on digital advertising, intended to raise awareness among citizens and residents, frequently ends up on foreign platforms. Government spending makes up about 20-25% of the total digital ad market in the Kingdom, meaning hundreds of millions of riyals leave the country annually, weakening the local digital economy.

Al-Abbad argues that Saudi Arabia needs strong local digital ad networks to keep this revenue within the national economy. These networks would help create jobs, drive innovation, and promote cultural diversity in digital content. Developing local platforms would also enhance Saudi Arabia’s digital sovereignty by ensuring that data remains within the country and is not controlled by foreign entities.

Moreover, local networks would reduce dependence on international platforms, ensuring that the economic benefits of digital advertising remain in the Kingdom, he said, stressing that this would align with Saudi Arabia’s broader Vision 2030 goals, which emphasize building a robust, diversified economy driven by local industries and digital transformation.

Globally, the digital advertising sector is growing rapidly. In 2022, worldwide spending on digital ads reached $602 billion, and it is projected to hit $876 billion by 2026. In the Middle East and North Africa (MENA) region, the digital ad market grew to $5.9 billion in 2022, with Saudi Arabia’s market accounting for over $1.5 billion.

In other countries, the digital ad sector plays a crucial role in boosting national economies. For example, in the United States, the digital advertising industry contributed $460 billion to the GDP in 2021, about 2.1% of the total. In the UK, the sector accounted for 1.8% of GDP in 2022. This shows how important digital advertising can be in driving economic growth.

One of the key challenges facing Saudi Arabia’s digital ad sector is the dominance of global platforms like Google and Facebook, which control 60% of the global digital ad market, Al-Abbad told Asharq Al-Awsat. This dominance results in a significant outflow of revenue and allows these platforms to control digital data and content. He warned that this could undermine Saudi Arabia’s national sovereignty over its digital economy.

To counter this, he emphasized that Saudi Arabia needs to build competitive local networks that can retain a larger share of the market. This will not only keep more revenue in the country but also strengthen the Kingdom’s control over its digital data and content.