Savola spreads itself into Iranian margarine market

23 July 2004
Saudi Arabia's Savola Edible Oils Company(SEO)has formed a joint venture with the local Behshahr Industrial Development Company (BIDC) to take over Iran's two biggest edible oil manufacturers, Behshahr Industrial Companyand Margarine Manufacturing Company. Under the agreement, SEO will invest IR 664,100 million ($76.8 million) in a 49 per cent stake in the new joint venture, known as Savola Behshahr Company (SBC). SEO will also hold management rights in the venture.

SBC will hold an 81.2 per cent stake in Behshahr Industrial Company and a 53.1 per cent share in Margarine Manufacturing Company. In 2003, the two companies together commanded a 40 per cent market share in the country, with revenues of over $300 million. Until now, despite being listed on the Tehran Stock Exchange, both have been semi-public sector companies, and this latest activity is seen as part of the privatisation process.

SEO, a subsidiary of the Savola Group, also has interests in Egypt, Jordan, Morocco and Sudan, and has a 70 per cent share in the Saudi market. SEO was advised on the Behshahr deal, its first transaction in Iran, by Geneva-based investment bank Swicorp.

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