Savola Group, Saudi Arabia's largest food product company by market value, said it plans to build a second sugar refinery in Egypt to meet rising demand in the most populous Arab nation and the Middle East. Both plants will increasingly rely on locally produced beetroot to make the sugar, rather than more expensive imports of raw sugar, Savola Chief Executive Officer Sami Baroum said in an interview here. “We want to take advantage of the competitiveness provided by local beetroot in countries like Egypt,” Baroum said. “Instead of buying raw sugar, we will buy beetroot. This will cater for both a second plant we are planning in Egypt and the plant we already have there,” he added. The existing 750,000 tons per year Egyptian refinery, a joint venture with firms including Tate & Lyle, will supply Egypt and other Middle Eastern countries. Baroum declined to give any further details about the planned second plant. Savola in May started preliminary operations of its Egyptian facility from which it expects to start making a profit in 2010. “Usually, sugar start-ups break even in the third year,” Baroum said. “You have to expect losses of 50-70 million riyals in the first year, 20 to 25 million riyals in the second year, and then it prints money in the third year.” Earlier, Savola reporteda net profit of SR250,4 millions compared to SR137, 4 millions in the past fiscal year, an increase of 82.2 percent. Baroum attributed this remarkable increase to the excellent performance of the group's various sectors within and outside the Kingdom especially its operational divisions in the international branches besides the distinguished performance of the Group's portfolio in the first quarter. He pointed out that the group's overall revenues during the same period have mounted to SR3 billions against SR2.25 billion in the first quarter of the year 2007, registering an increase of 33.3 percent. __
