Food and beverage company Barakat Quality Plus will invest Dh25 million for a second factory in Dubai Industrial City (DI) as the economy appears to be improving and consumer demand surges, according to the company’s top executive.
Barakat produces cut vegetables and fruits, ice cream and fruit juice, which are distributed in the UAE and Oman. It is part of Barakat Group, which is also the parent company of Barakat Vegetables and Fruits. It imports fruits and vegetables from Europe, South Africa, South America, Egypt, Turkey and Spain.
Construction of the second DI factory, or Phase 3, will commence by the end of the year and will double production of cut vegetables from 40 tonnes a day to 80 tonnes, according to Michael Wunsch, managing director of Barakat Quality Plus.
“There’s high demand now, and in view of upcoming government projects and hotel projects which are coming in the next five to six years, we have to expand,” Wunsch told Gulf News in a phone interview on Wednesday.
Work on the factory is expected to be completed by next year. The existing factory in DI, or Phase 2, was completed in 2012 with an investment of Dh35 million.
Barakat’s first factory, or Phase 1, is in Jebel Ali Industrial Area 2 , where production of cut fruits and juice is done. Production of cut fruits will shift to Phase 3 once it is completed, with a capacity of 15-20 tonnes a day.
“When Phase 3 is completed, we will have a total investment of Dh70 million,” Wunsch said.
Barakat’s new factory will be financed through Barakat’s own funds and banks. Wunsch did not say which banks will provide the financing, except to say that the company normally borrows from Emirates NBD, Mashreq Bank and HSBC.
Barakat posted a revenue of Dh150 million in the first half of the year, up 10 per cent over the same period in 2013. Wunsch expects revenue to reach Dh300 million by the year-end.
Meanwhile, Barakat is in talks to buy a piece of land in the UAE by next year for a mushroom farm, Wunsch said. Currently, the company imports mushrooms from Holland and Oman.
Barakat’s products are distributed to hotels, supermarkets and mini-markets at petrol stations. The company’s hospitality clients account for 70 per cent of its revenue, while supermarkets and mini-markets at petrol stations make up 30 per cent.
Barakat’s sales have dropped 30 per cent in Ramadan compared to previous months due to slow demand from hotels, according to Wunsch. By Eid, though, he expects sales to increase as demand picks up.
The company is looking to expand its operations to Qatar, Wunsch said, without stating a timeframe.