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| | Group Major Achievements |
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Highlights About Savola Evolution:
Savola began life in 1979 as an edible oils company with SR 40 million capital and 200 employees, importing and refining raw vegetable oils under the name of Saudi Vegetable Oils & Ghee Co. Today, Savola's capital has grown to SR 5 billion with market capitalization of
SR 24,950.00 Mn
and employees number more than 18,000 employees (inside KSA & Overseas), however the total number of Saudi forces in the Group and its subsidiaries reached 5,500 employees approximately (which represents 40% of the total workforces in KSA).
The early days were inauspicious. Faced with intense competition from the strong presence of multinationals in the Saudi market, the business struggled and very nearly foundered. But the response to development challenges greatly contributed to the company's survival, and its current strong position follows a long journey of efforts by great men who left no stone unturned to get there. Praise is due to all founders, board members, executives, managers, and employees at all managerial and operational levels for their remarkable contributions to this great enterprise. We take this opportunity to pray for those who have passed away, and express our thanks to the company's past and current management teams.
The early response to adversity was to compete hard and compete intelligently, taking a close look at areas where advantage could be gained. Seeking a competitive edge led to focus on market research and on commodity research - at the time virtually unheard of business tools in Saudi Arabia.
By talking to consumers, researching their likes, dislikes, and desires, Savola was able to develop products that matched market demand. The very act of asking consumers about their preferences gave Savola a distinct competitive advantage.
From inception, Savola realized that raw materials account for about 70 percent of end product total cost. Therefore, Savola focused on procuring raw materials based on advanced methods of commodity research that helped in securing better purchase contracts, enhancing Savola's competitive advantages against international companies.
Since then, these principles have been integral to Savola's business management - not only in the original edible oils operation, but in subsequent diversification to additional food products, plastics, retail, and real estate.
Establishing plastics production in 1991 was a natural development for the edible oil business. Having the company's own facilities would ensure continuity of high-quality packaging supply. However, the subsequent development of the packaging industry in the Kingdom meant local plants became more reliable for securing the greater part of the company's needs. Consequently, Savola sold a number of its packaging activities such as corrugated cartons, glass, and tin plate printing. Savola retained the Plastics sector, which has always remained a promising prospect for growth. Over the years, the Plastics sector has grown to be a leading producer in the Kingdom, supplying several industrial businesses in Saudi Arabia and abroad, with Savola off-take now accounting for only 4.0 percent of its annual production.
Sugar business began in 1994 by establishing a refinery of 500,000 tons annual production in Jeddah, now expanded to over 1.2 million tons with exports and distribution across all GCC countries and the entire Middle East region. The Group has also commissioned a 750,000 ton cane sugar refinery in Egypt, the capacity of which increased during 2010 to reach 800,000 tons. In addition to cane sugar, Alexandria Sugar Company (ASC) was established with 180,000 tons annual production of sugar-beet roots. Building on its success in Saudi Arabia, the Foods sector operations expanded to Egypt, Algeria, the Levant, Iran, Morocco, Turkey, Sudan, and Kazakhstan. The sector continues to expand through exploring new regions and adding new products to its range.
Retail operations began in 1998 with the acquisition of the Panda Azizia United group of stores, specializing in food and groceries. Already running a flourishing food business, Savola could now extend its value chain from production to retail point of purchase. Retail operations grew to 181 stores by the end of 2012. The acquisition of Panda came with a significant real estate component - 10 shopping malls where Panda was the anchor tenant. As retail and real estate are different business propositions, each with its own specialized business drivers, Savola separated the two operations to form a 100 percent-owned Real Estate Division. Kinan International Real Estate Company was subsequently established to own and operate the mall properties, with Savola retaining a 29,99 % holding and the balance being taken up by new investors in 2006.
Also part of the Panda takeover in 1998 was the Herfy group of fast-food outlets, of which Savola controls 70 percent, with the balance held by the founder and managing partner. Herfy is now being floated as a publicly listed company, a move that will see Savola retaining a diluted share of 49 percent but realizing more cash for expansion of the Group's principal operating areas.
Also part of the Panda takeover in 1998 was the Herfy group of fast-food outlets, of which Savola controls 70 percent, with the balance held by the founder and managing partner. Herfy is now being floated as a publicly listed company, a move that will see Savola retaining a diluted share of 49 percent but realizing more cash for expansion of the Group's principal operating areas.
Al Batool International, established in April 2003 and 100 percent owned by Savola, operates retail franchises for international cosmetics and fashion brands, and is another Savola initiative aimed at creating opportunities for young Saudi entrepreneurs to run their own businesses.
Historically, in a period when private equity funds did not exist in the Saudi market, acquisition and subsequent sale of companies and investments formed a major part of Savola Group activities, contributing significantly to profits through dividend income and capital gains accruing on disposal. But Savola's current development focus is on core businesses where it has a large and growing competitive advantage. Savola sold most of its ancillary or low-revenue investments to apply the funds to growing its core businesses. It is still seeking to exit other non-core investments at the proper time and price. The Group acquired additional shares in Almarai for a total cash consideration of SAR 2 billion. As a result, the Groups shareholding has increased from 29.95% to 36.52%.
With 30 years of success and experience across diverse business sectors, the Savola Group is now uniquely positioned for a new phase of focus and organic growth. As a result of this corporate maturity, Savola adopted corporate governance standards in 2004, not only for legal compliance but as an ethical commitment in keeping with the Group's corporate culture, aiming at enhancing Savola's corporate ethics of Honesty (Amanah), Conscientiousness (Taqwa), Caring Justice (Birr), and Personal Control (Mujahadah). Corporate social responsibility is a key part of Savola's management policy, evident through its support for 'Savola Bridges' community service programs. Saudization is a continuing priority, with Saudi nationals comprising a significant and growing proportion of the total workforce, numbering around 5,500 out of the 14,500 employees in Savola and its subsidiaries in the Kingdom. Savola's workforce abroad is over 3,500, with efforts continuing to recruit more young Saudi nationals.
Corporate Culture
Savola Group adopts a firm corporate culture through its 'Balanced Way' approach based on time-honored principles and values, namely:
Amanah (Honesty)
Responsibility towards our shareholders, through maximizing profits and commitment to transparency and disclosure of the company's performance.
Birr (Caring Justice)
Responsibility toward colleagues, through developing capabilities, motivation, guidance, sharing of ideas.
Taqwa (Contentiousness)
Responsibility to our customers and the community at large by providing high-quality products and services at reasonable prices, acknowledging our suppliers' and stakeholders' rights, as well as contributing to the development of communities where we operate through the 'Savola Bridges' CSR programs.
Mujahadah (Personal Control)
Mujahadah is the drive within us towards self-improvement and progressively increasing self-discipline, so as to realize our full potential and achieve greater distinction and excellence.
This brief introduction provides a summary of milestones that Savola has passed over the past 30 years & above, from inception in 1979. This latest year was a particular landmark in the history of Savola, one that distinguished our significant journey with high performance and remarkable achievements. More details are available in the Board of Directors' Report for this & the past years, which also are available in this website.
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