Kuwait-based food distributor Mezzan Holding has acquired a 70% stake in Al Safi Food Company for SAR90.75m ($24m).
This will allow the Kuwait-based company to manufacture and distribute food and beverage products in Saudi Arabia using Al Safi as a local platform.
Based in Riyadh, Al Safi Food Company is a food manufacturing start-up. It was established by Al Faisaliah Group which will hold the remaining 30% stake.
Following the deal, Al Safi will be renamed as Mezzan Food Company. It has been given exclusive rights by Mezzan to import, manufacture, sell and distribute all of its brands.
According to the agreement with Mezzan, Al Safi will also hold the right to manufacture, market and distribute its food products in Saudi Arabia. It will also continue to exclusively manufacture, market and distribute Al Faisaliah Group’s bakery and snacks range.
Mezzan Holding CEO Garry Walsh expects the new Saudi business to contribute 5-10% of the company’s net revenue by 2018.
Walsh also said: “Our Saudi Growth Strategy leading up to 2018 has three main priorities. Our first priority is to streamline operations by managing operating expenses, raw materials, and SKU rationalization.
“Our second priority is to introduce Mezzan-manufactured products from other countries, while raising the efficiency and production of Al Safi Food’s baked goods production.
“Our third priority is deploying the injected capital in expanding new product lines and build new factories to serve Saudi from within Saudi, and serve growing demand in Kuwait and neighboring markets through Saudi.”
Mezzan also operates in the UAE, Qatar, Iraq, Jordan and Afghanistan apart from Kuwait and Saudi Arabia through 29 subsidiaries.
The company deals in multiple segments that include food, beverage, consumer packaged goods and also into pharmaceutical manufacturing and distribution.