Agthia (AGTH.AD) signed a distribution agreement with General Trading Company (GTC), a unit of the Olayan Group conglomerate, to distribute Agthia’s retail flour products in Saudi Arabia, as per an announcement made on 29 February 2016. Agthia had planned to enter Saudi for some time for especially for flour given that it’s a 300ktpa retail market versus 50ktpa in UAE and its excess UAE capacity (utilisation at c85% with room to ramp up). GTC runs a nation-wide distribution network – Agthia expects shipments to start by end-March 2016,  initially targeting modern trade (too early for volume guidance). GTC will handle all distribution (and will make a distributor margin) and will bear inventory risk. The investment banks on the country’s decision to ban the local cultivation of wheat by end-2016 (phasing out since 2008) to conserve water consumption. On another note, the company’s board of directors has proposed the distribution of AED0.13/share in cash dividends for FY2015 (total of AED75mn), coming in slightly below our DPS estimate of AED0.15 for the year. The dividend implies a payout ratio of 32.5% (in line with the company’s average run rate) and a yield of 2.1%. We did not expect a significant uptick in payout given the company’s significant investments in capacity expansions and acquisitions in 2015. (Company Disclosure, Bloomberg, Nada Amin, Hatem Alaa)