Bangkok, Thailand-headquartered Thai Union, a major packer of valued added seafood products ranging from frozen shrimp and ready-to-eat fish-based dishes to canned tuna, sardines and mackerel, and Savola Foods Company, a major multinational food commodity group serving the Middle East, North Africa and Central Asia, have announced a joint venture to market sustainable seafood products in the region. Together they plan to invest $30 million to $50 million over the next two years to expand business in the regions.
The Thai Union Group operates more than 20 factories across Asia, Europe, Africa and North America that produce brands including John West, Chicken of the Sea, Petit Navire and Mareblu. The company is the world’s largest processor of tuna.
Savola Foods, a closed joint stock company and a subsidiary of the Savola Group (listed on Tadawul, the Saudi stock exchange), is the Kingdom’s largest food products company and among the largest food suppliers of edible oils, sugar, pasta and other staples in the Middle East. It generated revenues of SAR 14.59 billion (approximately $3.9 billion) in 2014 through the sale of a myriad of brands including Afia, Alarabi, Ladan, and Yudum.
The joint venture will benefit from the sourcing, processing and R&D capabilities of Thai Union coupled with the sales, marketing, and distribution prowess of Savola Foods. It will also leverage consumer and marketing expertise of both partners, including distribution of the John West brand in the Middle Eastern markets.
Cheng Niruttinanon, executive chairman of the Thai Union Group, and Bader Aujan, chief executive officer of Savola Foods Company, shake hands after signing the joint venture agreement at Savola Foods’ headquarters in Jeddah, Saudi Arabia.
Frozen, chilled and ambient seafood as well as ready-to-eat meals from Thai Union will be marketed in Saudi Arabia, the United Arab Emirates, Oman, Kuwait, Bahrain, Qatar, Jordan, Lebanon, Syria, Iran, Iraq, and Egypt.
Thiraphong Chansiri, president and ceo of the Thai Union Group, commented: “The Middle East region is one of the fastest growing seafood markets globally. It is a well-established seafood culture with increasing per capita consumption. We are very excited about this opportunity.”
Markets in the Middle East, Gulf and North Africa to be served by the joint venture are estimated to be worth over $3 billion in business per annum, with substantial growth expected over the next several years. Saudi Arabia, Iraq and Iran together had combined seafood sales in excess of $2 billion in 2014 and have experienced average growth of over 4% during 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 top $400 million.
Maaraf Abderrahim, chief executive officer of business development at Savola Foods, commented: “Seafood plays a special role in our consumers’ diets. Yet, the product offer in the market appears to be rather basic. We are very pleased to join hands with Thai Union and are committed to bringing best-in-class products to the market.”
