Gulf Capital sells strategic stake in Middle East Glass to MENA Glass Holdings

03 Sep 2024 --- Gulf Capital, a private equity firm based in the Gulf Cooperation Council (GCC) region, has sold its stake in Egypt-listed Middle East Glass (MEG) to the majority shareholder of the business, MENA Glass Holdings. This sale has reportedly positioned MEG as the largest glass packaging manufacturer in the Middle East and the second largest in Africa.

MEG serves a variety of industries including F&B and pharmaceuticals. It is said to be a key player in the global market, emerging as one of the top five exporters in Egypt.

During the holding period, Gulf Capital’s support enabled MEG to double its production capacity. The company expanded its facilities to operate 17 production lines and six furnaces, with an operating capacity of over 385,000 metric tons per annum. The company also saw a tripling of its export markets, now serving over 25 countries, and an increase in its client base, growing key clients by 21 times.

Dr. Karim El Solh, co-founder and CEO of Gulf Capital, says: “MEG’s transformational journey of value creation was possible through a true partnership for growth with MEG’s management team and the majority shareholder. We worked together with the team to implement a clear operational improvements strategy that saw the company grow its business not only through several mergers and acquisitions but also organically by expanding into new geographies and sectors.”

“In the last fiscal year, MEG achieved all-time high revenues and profitability. As a thematic investor, Gulf Capital’s investment in MEG was underpinned by sustainability trends and by the rise in recycling awareness in the region. We are thrilled to have been part of MEG’s journey along with its distinguished leadership and strong management team, and we wish them all the best as the company embarks on its next phase of growth.”

Strategic investment

Under Gulf Capital’s ownership, MEG consolidated its position in the industry through the acquisitions of Wadi Glass and Misr Glass Manufacturing. The company also secured a US$100 million debt financing package from the International Finance Corporation, which supported a comprehensive capital expenditure program aimed at optimizing its manufacturing processes with new technology and reducing waste.

As a result of these efforts, MEG more than tripled its revenues and profitability while also enhancing its profit margins by 50%. The company’s global footprint and market influence have grown substantially, making it a vital player in both local and international markets.

Abdul Galil Besher, chairman of Middle East Glass, adds: “Our partnership with Gulf Capital and the support we received from its investment team and operating partners across our operations have enabled the company to accelerate our growth and strengthen our market-leading position regionally. MEG today is firmly positioned as the leading glass container manufacturer in the Middle East and North Africa.”

“The disciplined execution of our value creation plan by MEG’s management team has allowed the company to expand its market-leading position in the region with record high operating metrics and overall profitability, all while being the only glass manufacturer in Egypt that undergoes cullet treatment and therefore resulting in lower levels of waste. It has also established a solid ground for future growth,” says Asaad Salhab, senior operating partner at Gulf Capital.

Glass packaging for sustainability

Glass, as an environmentally friendly and fully recyclable material, is poised to outgrow other packaging solutions due to the increasing implementation of sustainable business practices. It also remains a trusted choice for health-conscious consumers in the packaging industry for its reusable properties.

By increasing closed-loop recycling and using refillable glass packaging, the carbon emissions from single-use glass production can be reduced.

Tawfik Laham, CEO of Middle East Glass, asserts: “Gulf Capital played an active role in enabling MEG to achieve its goals of becoming the largest glass container manufacturer in the region.”

“As an active shareholder, Gulf Capital has worked alongside management and the majority shareholder on several strategic initiatives, which resulted in an even stronger customer base in our target markets, product and sector diversification and a more flexible production capacity.”

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