Joint venture announced for the Middle East
Cheng Niruttinanon, executive chairman of Thai Union Group and Bader Aujan, CEO of Savola Foods Company signed the joint venture agreement at Savola Foods’ headquarters in Jeddah, Saudi Arabia
Seafood processor, Thai Union, and the largest manufacturer of consumer goods in Middle Eastern markets, Savola Foods Company, have announced a joint venture to bring sustainable, innovative, and quality seafood products to Middle Eastern consumers.
The joint venture will benefit from the sourcing, processing, and R&D capabilities of Thai Union, and sales, marketing, and distribution expertise of Savola Foods Company. The joint venture will also leverage deep consumer and marketing expertise of both partners, including marketing the John West brand in the Middle Eastern markets.
The product lines for the joint venture will include all seafood products, including ambient, frozen, chilled seafood, as well as ready-to-eat meals. The joint venture will operate in 12 Middle Eastern markets: Saudi Arabia, United Arab Emirates, Oman, Kuwait, Bahrain, Qatar Jordan, Lebanon, Syria, Iran, Iraq, and Egypt.
“The Middle East region is one of the fastest growing seafood market globally. It is a well-established seafood culture with increasing per capita consumption. We are very excited about this opportunity”, said Thiraphong Chansiri, President and CEO of Thai Union Group.
The Middle Eastern markets to be served by the joint venture are estimated over US$3bn, with substantial growth expected over the next few years. Based on reported statistics, the core Middle East markets such as Iraq, Iran and Saudi Arabia alone reported seafood sales in excess of US$2bn in 2014 and have experienced average growth of over 4% over the last five years. It is anticipated that the joint venture will be able to capture a significant share of that market, and accordingly, the annual sales revenues within the next three to four years are expected to be in excess of $400m.
Thai Union and Savola Foods Company together plan to invest US$30-50m over the next two years into the joint venture.
Thai Union operates over 20 factories across Asia, Europe, Africa, and North America. It is active in several seafood categories including tuna, shrimp, sardines, mackerel, and salmon and owns leading global brands such as John West, Chicken of the Sea, Petit Navire, and Mareblu.
Savola Foods Company is one of the largest food companies in the Middle Easternmarkets, focusing on mass consumers foods, including edible oils, sugar, and pasta. The company operates strong food brands, such as, Afia, Alarabi, Ladan, and Yudum.