The two firms will invest US$30m-50m in the JV over the next two years, and are aiming to reach their US$400m sales target within four years. The venture will operate in all six GCC countries, along with Egypt, Iran, Lebanon, Jordan, Iraq and Syria.
“Seafood plays a special role in our consumer’s diet. 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,” said Maaraf Abderrahim, CEO of business development at Savola.
Thiraphong Chansiri, president and CEO of Thai Union Group, said: “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.”
The new enterprise, which a statement from Thai Union described as “a joint venture of equals” will focus on the popular John West brand in the Middle East. It will produce ambient, chilled and frozen seafood products, along with ready meals.
Major growth potential
Savola and Thai Union estimate the 12 markets covered by the JV have a seafood market of more than US$3bn, with strong growth expected throughout the region. The companies said just three markets – Saudi Arabia, Iran and Iraq – had seafood sales of more than US$2bn in 2014, and had seen growth in the market of more than 4% annually for the last five years.
Thai Union is the largest processor of tuna in the world, and owner of brands including John West and Chicken of the Sea. It also produces shrimp, sardine, mackerel and salmon products, and operates more than 20 factories around the world.
Last year Thai Union reported sales of US$3.8bn, with a profit of around US$142m. The company is aiming to more than double its business in the next few years, with a target of US$8bn in sales by 2020.
Savola is one of the largest food producers in the Middle East, with operations across the region. Last year it reported sales of around US$3.9bn.