(Reuters) – Juhayna Food Industries, one of Egypt’s largest dairy product and juice makers, will form a joint venture with Denmark’s Arla Foods that will be 51 percent owned by Juhayna and managed by Arla, Juhayna said on Thursday.
The venture, ArJu Food Industries, will add cheese, butter and infant formula to Juhayna’s existing product lines, the statement said.
The companies did not disclose the value of the deal or any financial details. It aims to start sales in Egypt in October.
Safwan Thabet, Juhayna’s chief executive, said the deal would help the company expand into other regional markets.
“Arla already has a strong presence in the Gulf, especially Saudi Arabia, and is looking to enter North Africa and we at Juhayna will benefit from entering those markets with them,” he told Reuters by telephone.
Food is seen as a fast-growing sector in the most populous Arab nation of 90 million people and the move was conditionally welcomed by analysts.
“Our initial reaction … is positive from (Juhayna’s) perspective,” NAEEM Brokerage wrote in a research note.
“However, with detailed information as to the size of capacities to be added, amount of capex etc, still to be disclosed, we are yet to have a clearer picture on the valuation impacts,” it said. (Reporting by Shadi Bushra and Ehab Farouk; Editing by Mark Potter and David Holmes)