The Savola Group’s two new edible oil subsidiaries in Morocco and Sudan are expected to start commercial operations in early 2004, the company announced.
Both ventures are beginning with small financial commitments from the Group, whose total sales turnover surged 8 per cent in 2002 to SR3.62 billion ($965 million) from SR3.35 billion in the previous year. The group’s net income was SR208 million, up 5.7 per cent over 2001.
In addition to edible oils, the Group’s holdings are spread across the retail division, the sugar division and investments in Al Marai, Herfy Food, Saudi Arabian Glass Company (Sagco), Savola Packaging System Company (SPS) and ACI (investment portfolio). The retail division accounted for 42 per cent of the sales turnover, edible oils 29 per cent, sugar 20 per cent, packaging four per cent and others five per cent.
New venture Savola Morocco, whose share capital is $5 million, has a Savola shareholding of 51 per cent with the remaining 49 per cent owned by a Moroccan investor. Production at the company is expected to reach 45,000 tonnes of edible oils per year.
The Savola Sudan project will be implemented in stages, the first phase starting with $2.5 million as initial capital and $1.4 million as operating capital. In the second phase, the company will likely install an oil refinery but only after the Savola Edible Oils Board evaluates the results of phase 1.
The Morocco and Sudan ventures expand the edible oils division where Savola Edible Oils, Saudi Arabia, an operation fully owned by the Savola Group, is clearly the giant with sales in the kingdom amounting to SR642 million in 2002 against SR546 million in the previous year, an improvement of 17.6 per cent.
In subsidiaries abroad, Savola Sime Egypt, rebounded from a weak 2001 to post a profit of SR12.5 million in 2002.
The other foreign subsidiary, Savola Jordan, increased its sales from SR41.5 million in 2001 to SR73.4 million in 2002, a 77 per cent surge.
Savola sold its shares in United Food Industries Corp in 2002 as part of a strategic move.
The Retail Division, fully owned by Savola, witnessed strong growth in 2002 with sales increasing by 22 per cent to SR1.5 billion. It is now operates the largest retail food chain in the Middle East.
The Sugar division, through United Sugar Company (USC), increased its capacity to 805,000tpy in mid-2003
In packaging, the company increased profits by 44 per cent in 2002 and export sales grew 49 per cent. The Savola Group operates its packaging business through its wholly owned subsidiary SPS, which owns plastic factories in Jeddah and Riyadh.
One of the important investments of the Savola Group is the 40 per cent shareholding it has in dairy company Al Marai, which has announced an ambitious expansion programme.
The Group also owns 70 per cent of Herfy, a leading fast food chain in Saudi Arabia. Another investment, the glass company Sagco, showed a 24 per cent surge in sales to SR187.4 million from SR151 million in the previous year. The Group has a 51 per cent share in Sagco.
