Abu Dhabi-headquartered Gulf Capital, one of the largest private equity firms investing from the GCC to the rest of Asia, has sold its strategic stake in Middle East Glass (MEG) – the largest glass containers manufacturer in the Middle East and the second largest in Africa – to MENA Glass Holdings Ltd., the majority shareholder of the business. MEG serves several high-growth, consumer-facing, and resilient industries, including F&B and pharmaceuticals, and is currently one of the top five exporters in Egypt.
MEG operates three state-of-the-art facilities with 17 production lines and six furnaces, with an operating capacity of over 3,85,000 tonnes per annum. It grew its global footprint by increasing the number of export markets by around 3x to over 25 countries, serving blue chip clients both locally and in export markets.
During Gulf Capital’s holding period, MEG doubled its production capacity, added new production lines, secured a $100 million debt financing, increased its export markets threefold, and grew its key clients by 21x. MEG increased its revenues and profitability by more than 3x each, while increasing its profit margins by 50% during Gulf Capital’s ownership period.
Dr. Karim El Solh, Co-founder and CEO of Gulf Capital, says, “MEG is a true example of our ambitious ‘buy-and-build’ strategy and our deep focus on operational improvements. 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.”
With funding provided by Gulf Capital, MEG led the consolidation of the industry and completed two strategic acquisitions of Wadi Glass and Misr Glass Manufacturing (MGM). The company also secured a $100 million debt financing from International Finance Corporation (IFC) to help fund an ambitious capital expenditure programme to optimise its processes using the latest manufacturing and waste reduction technologies.
“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,” adds MEG Chairman Abdulgalil Besher.
Asaad Salhab, Senior Operating Partner at Gulf Capital, explains, “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. The investment in MEG and the implementation of the value creation plan is a great example of Gulf Capital’s deep focus on operational improvements and growth.”
Glass is expected to outgrow other packaging solutions given the more sustainable business practices that continue to be implemented in the industry. As an environmentally friendly, fully recyclable, and reusable material, glass provides a more sustainable, environmentally friendly alternative to other packaging solutions.
