Hana Water holds 10% market share, expects to go public in few years: MD

Ahmed Al Theyab, managing director of Hana Water

Hana Food Industries Co. (Hana Water) maintained its growth in the last three years, despite the challenges of labor market restructuring and the negative impact of COVID-19 in 2020, managing director (MD) Ahmed Al Theyab told Argaam in an exclusive.

The company is pushing ahead with its strategic plans to improve performance and profitability in Q1 2021.

Hana Water won the best three rankings across the Kingdom in the last decade, holding a 10% market share in the sector. Based on studies, water consumption ranges between 5.5-6 billion liters of bottled water, while the sector’s growth ranged between 2% and 3.4% in the last three years, Al Theyab noted.

Based on the latest statistics by the end of 2019, the number of bottled water factories in the Kingdom stood at 143 with different sizes and production capacities. Meanwhile, the total number of brands reached 301, along with 1,242 types of water bottles of different sizes.

Hana Water was established in 1981. The company’s factory is strategically located, as it has access to groundwater wells. The company’s factory is one of the largest bottled water facilities, having 14 production lines and a capacity of up to 90 million cartons annually. The factory uses the latest technology and offers full production services, including water processing, and manufacturing of bottles and packaging.

The company began operations in 2006 with SAR 4.32 million in capital as a limited liability company. It was converted into a closed joint stock company in 2008 with SAR 50 million capital. Hana Water increased its capital several times, reaching SAR 405 million in 2016.

“Despite market changes and challenges, we maintained steady growth rates. In spite of some changes in 2020 on the COVID-19 impact, we were back on the right track in the fourth quarter of 2020,” Al Theyab noted.

The company faced different challenges since inception, such as demographic changes in the Kingdom, and higher costs – suffered by all producers – especially the cost of raw materials, workforce and energy, the MD added.

The rise in costs led all companies to incur higher financial charges, he noted, affirming: “Hana Water did not raise its product prices, which are almost the same for consumers”.

Hana Water invested over the years in the best European production lines, and focused on placing its water factory into international rankings to become the region’s leading facility. The company owns the world’s fastest production lines. The capacity of some lines reached 140,000 bottles per hour, with a daily production capacity of 15 million bottles of all lines.

Al Theyab stated that Hana Water is targeting to sell its shares to the public in the capital market, explaining that the company has already started to prepare the data required for the share sale in the last years, but preferred to postpone the offering, in order to complete the restructuring of some core activities, which will in turn aggrandize the company’s value.

“We expect to reconsider plans for an initial public offering (IPO) in the next few years,” Al Theyab concluded.