Savola, Thai firm sign joint venture deal

October 2015

Thai Union Frozen Products, the world’s largest canned tuna maker, has said it has signed a joint venture agreement with a subsidiary of Saudi Arabia’s Savola Group to tap the Middle Eastern seafood market, according to a Reuters report.

The move by the Thai seafood company to expand into Middle East, one of the world’s fastest growing seafood markets, came after its planned acquisition of Bumble Bee Seafoods faced potential delays due to an antitrust investigation in the US.

Thai Union and Savola Foods Company together plan to invest $30 million to $50 million in the joint venture over the next two years, the Thai firm said in a statement.

The joint venture will use Thai Union›s flagship John West brand to market in the Middle East countries and is expected to gain market share with a target annual sales revenue of over $400 million within the next three to four years, it added.

Savola Foods, which sells mass consumers foods such as edible oils, sugar and pasta, generated revenue of $3.9 billion in 2014.

The Middle Eastern market is estimated to be valued at over $3 billion, Thai Union said. The core markets such as Iraq, Iran and Saudi Arabia alone had seafood sales in excess of $2 billion in 2014 and had average growth of over 4 per cent in the past five years, it said.

The company said it was on track to achieve a sales target of $8 billion in 2020, despite the delay in the Bumble Bee deal. Thai Union said it is keen to invest in growing markets in Africa, Canada and Asia.

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