Savola Group entered into a strategic partnership with Al-Muhaidib Company to strengthen further the former's international position and its accumulated experience in the edible oils and sugar sectors, and building on its strong presence in the Egyptian and Sudanese markets. A a memorandum of understanding to this effect was signed here on Tuesday between the two companies incorporating Savola Foods Company. Dr. Sami M. Baroum, managing director of Savola Group, announced in a press conference that this step aims to achieve international leadership and enhance the food security for Saudi Arabia to meet its basic food needs through a strategic partnership with Al-Muhaidib (a regional leading player with various business activities that include several activities in the agro foods sector). Considering the vast expertise of the two partners, Sulaiman Al-Muhaidib, chairman of Al-Muhaidib Company, said the agreement will help the two partners to leverage the potential synergies between their businesses and expand into new food businesses. The two partners will expand internationally in rice particularly in the Egyptian and Pakistani markets. Savola Group, the leading Saudi conglomerate owns 90.7 percent of Afia International Co., Afia being one of the leading worldwide branded edible oils companies with operations across the Middle East, North Africa and Central Asia region with sales amounting to 1.3 million tons. Also the group manages its shareholding in sugar sector through its subsidiary (Savola Industrial Investments Co. (SIIC), in which Savola owns 63.5 percent and Al-Muhaidib owns 36.5 percent). The later controls 64.8 percent of United Sugar Company (USC). USC, in Jeddah, owns the 3rd biggest sugar refinery in the world with 1.2 million tons capacity. It controls also the United Sugar Refinery Company in Egypt which has a refining capacity of 750 KMT. The Savola Group decided to combine its oils and sugar businesses under one umbrella - Savola Foods Company (SFC) - in order to leverage the potential synergies between the two food businesses and to expand into new ambient food businesses such as rice, canned foods and other basic foods. Baroum indicated that the Savola Group will increase its stake in the sugar business by acquiring the remaining shares in SIIC from Al-Muhaidib Co. and expanding into the rice business by taking Al-Muhaidib rice expertise into the international markets, against Al-Muhaidib taking shares in SFC with an ultimate shareholding of 80/20 between Savola and Al-Muhaidib. This will make SFC one of the leading basic foods players in the Middle East, North Africa and Central Asia region and position it rightly to implement Savola Group's ambitious strategy to enter new foods areas through Joint ventures, mergers and acquisitions of major players in this field. __
