DOHA: Qatari company Baladna, which is creating a dairy industry in the desert to help the country to cope with a boycott by other Arab states, is planning an initial public offer of its shares (IPO) to raise funds and bring in strategic investors, sources familiar with the matter said. The privately-owned firm has chosen QNB Capital, the investment banking arm of Qatar National Bank, to arrange the IPO for the first half of 2018, said the sources, who declined to be named because the matter isn’t public. One source said the IPO might value the company, which flew 3,400 cows into Qatar during the initial weeks of the boycott to address a shortage of fresh milk, at about 2 billion riyals ($550 million). However, the sources said the valuation process had not been completed. Baladna and QNB Capital declined to comment. The IPO plan underlines one way in which Qatar is seeking to strengthen its economy in the face of the boycott by building up domestic companies to develop local production of key goods and services. Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic and trade ties with Qatar in June. This closed Qatar’s border with Saudi Arabia, across which most of its fresh food had been imported, and disrupted shipping routes through the Gulf. In response, the Qatari government has been giving logistical and other support to companies such as Baladna to foster domestic production. Qatar’s 2018 state budget, released this week, includes a plan to award 29 billion riyals of contracts to support growth in the private sector. Baladna, owned by Qatari businessmen Moutaz and Ramez Al-Khayyat, is looking to bring in a mix of strategic, institutional and retail investors with the IPO, one of the sources said. The listed firm would hold assets including Baladna’s farm, the milk production business, and the bottling operation, the source said. Qatar’s stock market was hit hard by the global financial crisis at the end of the last decade, and there have been only three IPOs since 2010. Qatari conglomerate Investment Holding Group was the latest, in August this year. Following its initial airlift of cows, Baladna plans two sea shipments – each of 3,300 animals – into Qatar by February, its chief executive told Reuters last month. Another consignment of 3,000 cows is on the cards but not yet ordered. To cope with the harsh climate in Qatar, where the temperature can approach 50 degrees centigrade in summer, Baladna’s cows are housed in sheds that are cooled by fans and jets of mist. Published in Daily Times, December 17th 2017.