● Mezzan Holding plans to invest in food manufacturing facilities in Saudi Arabia to serve Saudi and neighboring markets. The capital injection includes planned capital expenditures leading up to end of 2017.
● Al Safi Food Company is expected to contribute between 5% and 10% to Mezzan Holding top-line earnings in the next two years.
Kuwait - Mezzan Holding, one of the largest food, beverage, FMCG and pharma manufacturing and distribution companies in the Gulf, has completed its acquisition of 70% of KSA-based Al Safi Food Company today, effectively granting Mezzan Holding a local platform to manufacture and distribute food and beverage products in the Kingdom.
Based in Riyadh, Al Safi Food Company is a start-up food manufacturing company established by Saudi Arabia's Al Faisaliah Group in January 2014 and operated in May 2015. The Al Faisaliah Group, a leading diversified business group, will continue to be part of the Al Safi Food Company with the remaining 30% stake.
Mezzan Holding, a Kuwait Stock Exchange-listed company, acquired the 70% stake through a capital injection of SAR90.75 million (KD7.3 million). Mezzan Holding operates in seven countries through 29 subsidiaries and 7,500 employees, and generates approximately 75% of its revenues through retail-based activities. The capital injection includes planned capital expenditures leading up to end of 2017.
Mezzan Holding Vice-Chairman, Mohammed Al Wazzan, said, "Saudi Arabia represents a key growth market for our company. We look forward to grow our business in the Kingdom and serve Saudi households with high quality food products along our local partners, the Al Faisaliah Group."
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.
"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.
"By 2018, we expect our Saudi business to contribute between 5% and 10% to our top line, and to grow there as the new Saudi-based food manufacturing facilities that we have planned start production."
Al Safi Food Company, which will soon be renamed to Mezzan Food Company, will have the right to manufacture, market and distribute food products in the Kingdom of 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 was advised by Mohammed & Khlood Aldukheil Co. (MKD) and Abdulaziz H. Al Fahad & Partners. Al Faisaliah Group was advised by Abdulaziz I. Al-Ajlan & Partners in association with Baker & McKenzie Limited.
About Mezzan Holding:
● Operates in seven countries through 29 subsidiaries with 7,500 employees
● Distributes over 25,000 Stock Keeping Units (SKU), making it one of the largest operators in terms of SKUs, unit sales, market share and in terms of share of revenues of total consumer spending in consumer categories served by the company
● Active in various segments of the consumer staple industry supported by long-standing relationships with Johnson & Johnson, Olayan Kimberly-Clark, Reckitt Benckiser, General Mills, Arla Foods, Sara Lee and many other leading brands and manufacturers
● Serves over 100,000 meals a day in Kuwait, Qatar and the UAE through its catering business
● Leverages long-standing relationships with private and cooperative supermarkets
● Vertically integrated into complementary business operations, including packaging, catering, contract services and logistics
● Food services customers include multinational fast food chains, airline catering services and large food services companies
Mezzan Holding is a 70-year old company that was listed on Kuwait Stock Exchange in the second quarter of 2015 and has a current market capitalization exceeding US$1bn. The company is headquartered in Kuwait with direct operational activities in Kuwait, UAE, Qatar, Saudi Arabia, Iraq, Jordan, and Afghanistan.
About Al Faisaliah Group:
Al Faisaliah Group is a privately-held, multi-business group headquartered in Saudi Arabia and predominantly serving the Middle East with activities in over twenty countries. Founded in 1971, the Group holds leading positions in agriculture & food, healthcare, food services, pharmaceuticals, and electronics & systems. The Group is recognized by virtue of its strongly-held values, its professional management and its long-tenure strategic partnerships and joint ventures with leading global firms including Sony, Danone, Philips, and Accenture.
For more information, please contact:
Fawaz Al Sirri | Bensirri Public Relations | Tel: +965 666 22448 | Email: Fawaz@bensirri.com
© Press Release 2016