The confectioner has 104 branches across the Kingdom and a catering unit.
Quality of sweets
The company is owned jointly by Dubai-based NBK Capital Partners, the private equity arm of National Bank of Kuwait, and Dr. Saleh Bin Nasser AlFarhan, who founded the company in 1995.
According to reports, Savola Group wants to increase the quality and variety of its sweets through the unconfirmed acquisition.
The Group, which owns supermarket chain Panda, announced its 2016 financial results earlier this year, declaring SAR25bn ($6.67bn) revenue compared to SAR25.1bn ($6.69bn) in 2015.
It claimed the lack of growth was mainly due to the underperformance of the retail segment, exacerbated by the macro environment in Saudi Arabia.
However, Rayan Fayez, CEO, Savola Group said its underlying business remains strong and it is well positioned to benefit from long term trends in the market.
“We operate largely in defensive sectors with leading market shares across growth markets which benefit from a young and growing population, growing middle class and increasing household consumption,” he said.
“The dip seen in 2016 is a reflection of the need to reconfigure our operating model in retail, a task we have embarked on to ensure we reap the benefits of both the defensive nature of the segment we operate in and our scale.”
According to Euromonitor’s report ‘Confectionery in Saudi Arabia’ in December 2016, chocolate manufacturers kept their activity levels high as demand for chocolate confectionery continued to soar.
This was despite the slowdown in the Saudi economy owing to falling oil prices globally and a record $98bn budget deficit in 2015.
The slowdown affected many food and beverages categories but chocolate growth remained strong because of the Saudi population’s strong indulgence in chocolate, the report said.
ConfectioneryNews has contacted Savola Group and is awaiting comment.