Savola Group , the Middle East's largest sugar refinery, has teamed up with Turkish and Saudi partners to bid for six sugar mills being sold by the Turkish government. Savola's food business unit Savola Foods has set up a joint venture with farmers' union Turkey Tarim Kredi and the local Nesma Holding Company, Savola said in a statement posted on the Saudi bourse's website. Savola Foods, 90 percent owned by Savola, and Turkey Tarim Kredi will hold 40 percent each of the venture while Nesma will hold 20 percent, it said. Savola Foods and its partners will make their bid on Nov. 19, a senior executive at Savola said. “Turkey is at the heart of Savola's expansion drive. The plants we are targeting are sugar mills that process sugar beet, they can produce 500,000 tons per year but right now they produce only 300,000 tons,” he said. If successful, the bid would open access for Savola's sugar business to its second-most populous market after Egypt. Savola Foods has a 750,000 tonnes per annum sugar refinery in Egypt and owns a 1.2 million tonnes per year sugar refinery in the Saudi city of Jeddah on the Red Sea coast. Savola Foods plans to develop the six units and orient some of their output to foreign markets, the executive said. Savola has a total sugar refining capacity of 2 million tons per year which places it ahead of its closest regional competitor, the UAE-based Al-Khaleej Sugar Co which has a refining capacity of some 1.1 million tons per year. Laurent-Patrick Gally at Dubai-based Shuaa Capital said the news would have “a minor positive” impact on Savola's share price. “Expanding outside of the Gulf region is part of Savola's stated expansion strategy in the food sector, where its sugar business is a major component alongside edible oil,” Gally said. “Having local sugar production capabilities provide an edge to local sugar producers when sugar importers are subject to import duties, (since) sugar is typically a highly regulated market,” he added. Savola Foods is the world's largest manufacturer of branded cooking oil. In 2007, Savola bought Turkish edible oils firm Yudum Food from National Bank of Kuwait's investment banking unit for SR200 million.
