RIYADH, 26 February 2005 — Saudi book and office supply trader Jarir Marketing Co. aims to triple sales to SR2.4 billion ($640 million) in 2010 by expanding in the Gulf and into Egypt, its executive chairman said on Thursday.

Muhammad Al Agil told Reuters the projection assumed a modest 2 to 3 percent rate for economic growth in the company’s Saudi home market. He declined to estimate a rise in demand over the next five years.

“We are not growing because of the (oil price) boom, we have been growing since the 1980s ... It is just evolution and this country is virgin territory,” Agil said of his company which has risen to the middle ranks of Saudi Arabia’s listed firms with a market capitalization of nearly SR2.25 billion.

Jarir posted a net profit of SR120.6 million for 2004, up from SR108.8 million in 2003, and sales rose 24.5 percent to SR825.7 million last year, according to results reported earlier this month.

Agil said the company expected to hit SR1 billion in sales this year and increase earnings per share to SR30 from SR25 in 2004. He said sales could grow to SR2.4 billion in 2010. “It (our projection) is based on more stores and more products, you have to be careful about demand, it will plateau,” said Agil. “When you start looking at demographics you can overshoot.”

Return on equity was now near 40 percent, he said. “This is totally not typical in the retail business here ... many did not believe it,” Agil said.

Founded by five Agil brothers in 1974, Jarir was one of the first family-owned Saudi firms to invite outside investors to buy 40 percent of its shares via a private placement in 2000, when its ambitious projections raised eyebrows even at its investment bank. The brothers then offered about 500,000 of their shares to the public when the firm first listed on the Saudi Stock Exchange in 2003, retaining over 50 percent ownership, Agil said. The company’s shares closed on Thursday at SR468.0, close to a year high of SR478.5.

The company owns two brand labels which it markets via dealers, and operates 17 retail shops in Saudi Arabia and an outlet in each of Kuwait, Qatar and the United Arab Emirates.

By opening more stores in Qatar, Kuwait, Bahrain, Oman, the UAE and Egypt, Jarir plans to spread its risk by boosting the percentage of its turnover from overseas branches to between 30 and 40 percent of its revenues from 20 percent now.

The creation of the Saudi Capital Market Authority and the reduction of the Ministry of Commerce role in the stock market will encourage more and more Saudi companies follow Jarir and list shares, Agil said.

Unlike investor “trendies” putting most of their money in soaring Gulf markets, Agil said his own investment strategy focused on more modest, but safer, returns.

“Here in the Saudi market of today I have a little bit ... But we should not be surprised if we lose ... because it is a high valuation.”