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August 25, 2016updated 10 Apr 2021 5:30pm

Mezzan Holding takes 70% stake in Al Safi Food Co.

Kuwait-listed food group Mezzan Holding has acquired a 70% stake in Saudi food maker Al Safi Food Co. 

Kuwait-listed food group Mezzan Holding has acquired a 70% stake in Saudi food maker Al Safi Food Co.

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The deal will provide Mezzan Holding with a local platform to manufacture and distribute food products in Saudi Arabia, a market where the group already has operations.

Al Safi is a food manufacturing company set up by Saudi Arabian conglomerate Al Faisaliah Group in January 2014 and which started operations in May 2015. The Al Faisaliah Group will hold the remaining 30% stake in Al Safi.

Mezzan Holding CEO Garry Walsh said: “The acquisition marks our real entry into the Kingdom’s food manufacturing and distribution sector. Though the company was acquired while in a start-up mode, it has a high turnaround potential and will immediately provide a new platform for both margin growth and distribution scale, in addition to complementing our activities in other markets and contributing to the group’s bottom line starting from 2018 and beyond,” Walsh said.

The tie-up will result in a capital injection of SAR90.8m (US$24.2m) for Al Safi, including planned capital expenditures. Further financial details were not disclosed. The acquisition is expected to be accretive to earnings in 2018, Walsh said. 

Mezzan said Al Safi already has over 70,000 square metres of land on a long-term lease. The company plans to invest in food manufacturing facilities in Saudi Arabia to serve the domestic and neighbouring markets. 

The group’s strategy in Saudi Arabia will see it streamline operations by lowering operating expenses and rationalising SKUs; introducing more Mezzan-manufactured products to capitalise on cross-selling opportunities; and building more local production, Walsh said. 

Al Safi Food Company, which will be renamed Mezzan Food Company, will have the right to manufacture, market and distribute food products in Saudi Arabia. The company was also awarded exclusive rights to continue to manufacture, market and distribute Al Faisaliah Group’s bakery and snacks line, as well as the exclusive rights to import, manufacture, sell and distribute all Mezzan Holding brands.

Mezzan Holding operates in seven countries through 29 subsidiaries. It generates approximately 75% of its revenues through retail-based activities.

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How is technology having an impact on Consumer buying behavior?

As the world rapidly becomes more connected, it is important for brands to understand the impact that improved technology is having on consumer purchasing behaviors. To react effectively, brands must know how to engage with increasingly digitally savvy consumers. GlobalData’s latest Trend Tracker report provides an analysis of Digital Lifestyles – one of GlobalData's top consumer trends for 2022. The report includes an overview of how digital lifestyles are evolving, including the significant impact that the COVID-19 pandemic had on accelerating digitalization, and how this trend is emerging across different Consumer sectors. Key features included in the report:
  • A breakdown of the trend’s prominence across sectors
  • Insights into consumer online penetration, preferred electronic devices and engagement
  • The key drivers and challenges impacting the digital lifestyles trend
  • A spotlight on key innovations set to reshape the consumer landscape
  • Analysis of what’s next for digital innovations and how brands can leverage the trend
Download this report to keep in touch with the more digital consumer.
by GlobalData
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