Savola Group Company: SWOT Analysis & Company Profile by BusinessReview

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									Savola Group Company

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Savola Group Company: SWOT Analysis &
Company Profile


Reference code: BRCP095CP10-Q4

Published: Oct 2010




Business Review
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Savola Group Company - SWOT Profile                                                 Page 1
Savola Group Company

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Savola Group Company - Company Overview

Savola Group Company (Savola) is one of the leading food companies in Saudi Arabia. The company, along with its
subsidiaries is engaged in the production and marketing of vegetable oils and setting up related industries, besides dairy
products, snack foods and packing materials. In addition, the company is also involved in real estate related investment
activities and development of agricultural products. It offers vegetable oils, snack foods, edible oils, sugar, noodles, pasta,
dairy products, and packing materials through three reportable segments namely, Manufacturing/ wholesale, Retail, and
Investment and other activities. The company is principally active in four key sectors namely, foods, plastics, retail, and
real estate. Savola is headquartered in Jeddah, Saudi Arabia.


Financial Performance

The company reported revenues of (Saudi Riyals) SAR 17,917.20 million during the fiscal year ended December 2009. Its
revenue increased at a compounded annual rate of 31.20% during the period 2007-2009 with a year on year increase of
29.63% over fiscal year 2008. During the fiscal year 2009, its operating margin was 4.04% as against an operating margin
of -1.57% during the fiscal year 2008. Moreover, during the fiscal year 2009, the company’s net profit margin was 5.31%
as against a net profit margin of 1.46% during the fiscal year 2008.




Savola Group Company - Key Facts

Savola Group Company, Key Facts

                                  Floor 8, Saudi Business Center,
                                                                    Ticker Symbol, Stock         2050 (Saudi Arabian Stock
Corporate Address:
                                  Jeddah, , 21424, Saudi Arabia     Exchange                     Exchange)



Telephone                         + 966 2 6573333                   No. of Employees             16,267



Fax                               + 966 2 6484119                   Financial Year End           December



URL                               www.savola.com                    Revenue (in SAR Million)     17,917.20


                                  Consumer Packaged Goods ,
Industry                                                            Revenue (in USD Million)     4,777.92
                                  Retailing


                                  Kazakhstan, Turkey, Algeria, Egypt, Iran (Islamic Republic of Iran), Jordan, Lebanon, Morocco,
Locations                         Saudi Arabia, Sudan, United Arab Emirates, British Virgin Islands

Source: Annual Report, Company Website, Primary and Secondary Research




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Savola Group Company - SWOT Profile                                                                                     Page 2
Savola Group Company

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Savola Group Company - Business Description

Savola Group Company (Savola) is the second largest company in the Saudi Arabian industrial market and ranks 12th
among the top 100 companies in Saudi Arabia. The company, along with its subsidiaries, is engaged in the manufacturing
and marketing of vegetable oils and setting up related industries, retail outlets, dairy products, snack foods and packing
materials, exports and imports, commercial contracting, trade agencies and development of agricultural products. Savola
employs around 16,000 people.

The company offers a wide range of edible oils, sugar, plastic, herfy products, and manages real estate and franchising
operations through three reportable segments, namely, Manufacturing/ wholesale, Retail, Investments and other activities.

Under the Manufacturing/wholesale segment the company manufactures, wholesales and markets a wide variety of food
and related products. During the fiscal year 2009, the segment contributed 55.8% towards the total revenues of the
company, generating SAR 9,997.11 million, an increase of 29.8% over the previous year.

Further, under the Retail segment the company retails food and related products. During the fiscal year 2009, the
segment contributed 44.2% towards the total revenues of the company, generating SAR 7,920.09 million, an increase of
29.4% over the previous year.

Savola operates its businesses in four core sectors, namely, Foods, Retail, Real Estate, and Plastics. In addition, the
company manages a franchising unit, which has exclusive rights in Saudi Arabia for ten international brands of fashion
wear from different countries.

Savola operates in the Food sector through its 95.19% owned subsidiary, Afia International Company (AIC). AIC manages
entities such as Afia International Company (Egypt), Savola Behshar Iran, Savola Kazakhstan, Savola Morocco, Savola
Edible Oil – Sudan, Afia Jordan Company, and Algeria-Green Field Project. Through these entities, AIC offers branded
edible oils in Saudi Arabia, Levant, Egypt and Iran. The Food business also includes operations of United Sugar Company
(USC), a wholly owned subsidiary of Savola Foods Company. USC is the third biggest sugar refinery in the world, with
production capacity of 1.2 million MT per annum. USC sells sugar in the Middle East through its three retail brands,
namely, Al Osra, Ziadah, and Safaa. As a whole, the Food business manages around eleven plants in eight countries and
sells its products in more than 30 countries across North Africa, the Middle East, and Central Asia region.

Savola manages its Retail business through its 80% owned subsidiary, Azizia Panda United Co. The company manages
around 113 retail stores, which include supermarkets under Panda Stores brand and hypermarkets under HyperPanda
Stores brand across Saudi Arabia. Savola offers a wide range of private label and branded products through its retail
stores. The company manages its warehousing operations through a central warehouse located in Riyadh. The central
warehouse is the largest in the Middle East, with a covered area of 72,500 square meters and could be expanded up to
92,500 square meters.

The company is also involved in the Plastics sector through the Savola Plastics Division. The company manages its
Savola Plastics Division through Savola Packaging Systems Company (SPS), a 100% subsidiary of the company. SPS is
engaged in the production of packaging products. SPS manages various subsidiaries, which include Al-Sharq Plastics
Company (ASP) and New Marina Plastic Company (NMP) and sells plastics to 22 Arab, European, Asian and African
countries.

The company operates its Real Estate business through its 30% owned subsidiary, Kinan International Real Estate
Development Company (Kinan). Kinan manages more than 10 malls across Saudi Arabia. About 45 million people visited
its malls during 2009.

Savola also engages in Franchising operations through its 100% subsidiary, Al Batool International Company. Its
Franchising unit has exclusive rights for ten international brands of fashion wear in categories of cosmetics, leather goods
and ladies casual wear.

Geographically, the company operates under four segments, namely, Saudi Arabia, Egypt, Iran, and Other countries.
During the fiscal year 2009, the Saudi Arabia segment contributed 66.0% towards the total revenues of the company,
followed by Other countries contributing 12.2%, Egypt 11.7% and Iran 10.2%.

Recently, the company issued 8.71 million shares to acquire Alhokair Group's 7% minority position in Azizia Panda
United.




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Savola Group Company - SWOT Profile                                                                                Page 3
Savola Group Company

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Savola Group Company - Major Products and Services

Savola Group Company is engaged in the manufacturing, wholesale, marketing, and retail trading of food and related
products. The key products and services offered by the company include the foll
								
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