Savola’s capitalization reaches $1.3 billion
The Savola Group has reported that the company's market capitalization has reached five billion Saudi riyals ($1.3 billion). After capitalizing from reserves, the Group's capital has been raised to SR 800 million, while forecasts indicate that profits will reach 37 percent compared to a previous forecast of 30 percent.
It is also expected that Savola Group sales will reach four billion riyals with a net profit of SR 285 million by the end of this year. Chairman of Savola Adel M. Fakeih stated at a recent press conference that the Group is basing its growth strategy on the 555 plan, which targets five billion riyal sales with SR 500 million profits by the end of 2005.
Savola Group Chairman revealed that the retail section Panda will launch a chain of hypermarkets next year. Sales have doubled over the last three years to reach SR 1.5 billion with a net profit of SR 15 million, and are expected to increase to SR 1.6 by the end of 2003 and to SR 3.5 billion by the end of 2006. Fakeih also stated that Panda's market share is 10 percent of the Saudi market, and that Panda is aiming at achieving additional revenue through developing real estate owned by the group. The 50 branches of Panda were able to decrease purchasing costs to more than seven percent through by implementing effective purchasing policies.
Savola Edible Oils (SEO) division’s market share is 70 percent in Saudi Arabia, 26 percent in Egypt, and 23 percent in Jordan. Annual total sales of SEO have reached more than SR 1 billion and a net profit of SR 81 million. SEO's rapid growth rate amounted to 8.5 percent, which indicates that sales will continue to increase and reach SR 1.2 billion with a net profit of SR 86 million by the end of 2003.
SEO has launched two new projects, one in Morocco and the other in Sudan that will start production in 2004 and 2005 respectively. There is a great potential for expansion in the Middle East and North Africa and Savola Group plans an international future for SEO as a leading edible oils company.
The Group’s United Sugar Company achieved profits of SR 86.8 million last year out of total sales of SR 725 million. Indications are that sales will increase to reach 890,000 tons with a net profit of SR 95 million by the end of this year.
Established in 1979 with an initial capital of SR90 million, the Savola Group is a food processing and trading company focusing on edible oils and fats, sugar and food retailing. It operates manufacturing plants in Jeddah (Saudi Arabia), Egypt and Jordan, with investments also in Pakistan, Algeria and Sudan.
Savola's product range includes brands such as Afia, Al-Arabi, Lisa, Karam, Shams, Nakheel and Hala. The joint stock group operates 46 stores in Saudi Arabia. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
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