Diversified Savola Group is looking forward to lifting its profit levels and revenues through acquisitions and plant expansions.

One of its key initiatives is to assume full ownership of an Egyptian fertiliser company. Also in Egypt, Savola has invested in a sugar plant which is due to begin commercial production in August, while it recently expanded capacity at its Jeddah sugar plant and has indicated there will be a further capacity upgrade.
Savola has extended its successful edible oils business segment with a new plant in Algeria. It joins other edible oil plants in Saudi Arabia, Iran, Egypt, Jordan, Morocco, Kazakhstan and Sudan.
Savola expects the business initiatives to help it exceed net income levels of recent times.
The group posted a net income of SR137.5 million ($36.7 million) in the first quarter of 2007, a 1.3 per cent increase over the same period in 2006. The profit growth fell far short of the 12.7 per cent that was forecast by analysts in a Reuters survey. Operating profit climbed 20.2 per cent  to SR103.9 million.
The marginal increase in the quarter came on the heels of a 4.2 per cent drop in net profits for 2006, the company having registered a net income of SR1.15 billion against SR1.20 billion in 2005.  
As well as edible oils and sugar, the group has investments in the retail business through its Azizia Panda network, which has extended into the UAE; the fast food chain Herfy and in plastic packaging, among other areas.
Savola’s Egyptian sugar facility on the Gulf of Suez coast is a joint venture with companies including Tate & Lyle and has a designed capacity of 750,000 tonnes per year (tpy). In addition to the home market, the plant will supply Jordan, Lebanon and Syria. The president of Savola’s sugar division, Mohammad Hassan Ajlan, said recently that “the disappearance of EU sugar from this market is an opportunity for us.” The new plant has an assured market as the Middle East and North Africa region consumes about 13 million tpy of refined sugar, of which around half the volume is imported or refined from imported raw sugar. Egypt itself consumes 2.5 million tpy of which 1.5 million tpy is produced locally. The market there is growing at 50,000 tonnes every year. The plant, which cost $90 million, will export half its production.
In Jeddah, Savola’s sugar subsidiary United Sugar Company markets its products under the Osra brand and claims more than a 50 per cent share of the Saudi market. The plant’s capacity of 1 million tpy is being raised to 1.2 million tpy in the first phase and to 1.5 million tpy in the second phase.
Diversifying from its strong position in the food and retail industry, the Savola group acquired a 30 per cent share in Egyptian Fertiliser Company (EFC). By the end of 2006, the board expressed its intention to acquire the remainder of the shareholding and assume full ownership of the company, which is Egypt’s largest exporter of fertiliser. EFC recently doubled its capacity to 1.27 million tpy. The Savola board expects EFC to contribute SR300 million to the group’s coffers in the first year.