JEDDAH, 25 November 2007 — Afia International Company, a subsidiary of Savola Company, purchased Turkey’s leading edible oil company Yudum — owned by National Bank of Kuwait —the Saudi company said at a press conference in Jeddah.
The Saudi company has acquired 100 percent of Yudum’s shares for SR200 million ($53 million) in cash, said Sami Baroum, managing director of the Savola Group.
He added that the entry to the Turkish market would further widen the geographical footprint of the group’s edible oil business that extends throughout the Middle East, North Africa and Central Asia.
The Saudi company’s edible oil brands are the market leaders in the Gulf, Levant, Egypt and Iran, and are in leading positions in emerging markets such as Kazakhstan, Morocco and Sudan.
Yudum’s over all sales in 2006 reached SR370 millions with a net profit of Sr25 million. The company owns market leading corn and sunflower oil brands Yudum and Sirma. The company’s market share is around 25 percent of the Turkish edible oil market of branded sunflower and corn oils. The acquisition of Yudum will also enable the group to enter into the olive oil business, as Yudum also possesses an olive oil refining capacity of 20,000 tons per year.
The Turkish market is considered one of the largest oil and fat markets in the Middle East region with a volume of more than one million metric tons in 2006. The Turkish edible oil consumption per capita is also one of the highest in the developing countries.
Baroum added that with a population of 72 million, growing at annual rate of 1.4 percent and GDP growth of 6 percent, the group’s entering into the Turkey represents a promising opportunity and strategic move with the intent of making it a springboard for further international expansion. He added that this investment would result in increasing the company’s edible oil sales volume to 1.4 million metric ton per annum and in turn further entrench the group’s leading position in the industry.
“Afia International Company is already the highest volume producer of branded edible oils in the world,” Baroum said.
The transaction is subject to approval of Turkish government’s regulations.
The Turkish firm operates two plants producing about 120,000 tons of sunflower, olive and maize oils for the local market, NBK said in June.
Yudum holds a 25 percent domestic market share in sunflower and corn oil, said Swicorp, which acted as financial adviser for Savola.
Savola has earmarked SR18 billion rials for expansion in North Africa and Central Asia, Baroum said in June, citing Turkey among his target countries.
Afia has an annual turnover of more than $400 million and its products account for around 70 percent of the Saudi edible oil market.
Savola has indefinitely postponed an initial public offering in Afia, which was initially planned in 2007.
