Qatar Meat & Livestock Co., the best-performing stock on the QE Index last year, will seek funding for a 450 million-riyal ($124 million) project to raise poultry as the company ventures into new foods.
The company, known as Widam Food, is awaiting a government license to build a plant that will produce 22 million chickens a year for sale on the domestic market, Managing Director Ahmad Nasser Sariya Al-Kaabi said in an interview from his office in the capital Doha. The license is delayed because the amount of land and water required needs more study, he said.
If the license is granted, the company will consider funding methods including a capital increase, sharia-compliant bank loans or the issuance of Islamic bonds, he said.
Two years after the government said it would nationalize the company to improve its performance and then backed off on those plans, Widam’s profit has more than doubled, according to data compiled by Bloomberg. Net income rose to 20.7 million riyals in the first quarter from 9.3 million riyals two years earlier. The stock rose 85 percent last year, the biggest gain on the QE Index, which dropped 4.8 percent.
The government’s retreat “was a big push for us to improve in the years to come,” Al-Kaabi said.
Widam, which imports live lambs for slaughter and sale on the domestic market, also plans to expand into fish farming and will build a new 45 million-riyal plant for making processed meats including hamburger and sausage, Al-Kaabi said.
Australian lamb accounts for 80 percent of Widam’s meat imports, he said. The company imported about 1 million Australian sheep last year, and the meat is sold through the company’s retail outlets at prices that are subsidized by the government, he said.
Hassad Food Co., the agricultural investment arm of the emirate’s sovereign wealth fund, holds a 6 percent stake in Widam, Al-Kaabi said.
Hassad, which works to increase Qatar’s food security, purchased 40,000 hectares (154 square miles) of property in Austrialia’s Victoria state as well as 31,500 hectares of farmland in three locations of Western Australia last year to raise sheep and grow wheat and barley, Tom McKeon, chief executive officer of Hassad Australia, said last year.
“The role of Widam Food is to import from Hassad and distribute it in the country,” Al-Kaabi said.
Widam shares rose 2.6 percent to 63.2 riyals on the Qatar Exchange today, the biggest increase since March 27. The shares have gained 7.5 percent this year.