“We were pleased with our overall performance given some of the macro-economic challenges across the markets we operate in as we highlighted earlier in the year.” said Garry Walsh, chief executive of Mezzan, which also manufactures FMCGs and pharmaceuticals.
“Our consumer staple portfolio demonstrated its resilience in these market conditions, while new business, distribution gains, and market share gains in some of our key businesses in Kuwait, Jordan and Qatar added to the growth momentum.”
Walsh said that a joint-venture with Saudi Arabia’s Al Faisaliah Group was “making good progress”. The deal will give Mezzan access to the Gulf’s biggest food and consumer market when it is finalised next month, as planned.
In June, the Kuwaiti conglomerate announced that it was in talks with the leading Saudi diversified business group for the foray into Saudi’s food manufacturing and distribution sector.
The joint-venture will enable Mezzan Holding to manufacture, market and distribute food products in Saudi Arabia, and award it exclusive rights to continue to manufacture, market and distribute Al Faisaliah’s bakery and snacks products line, as well as the exclusive rights to import, manufacture, sell and distribute all Mezzan brands.
Under the terms of the joint-venture, Mezzan will acquire a 70% stake through a capital increase in a food and beverage manufacturing and distribution entity, Al Safi Food Company, currently owned by Al Faisaliah, which will retain the remaining 30% stake.
The transaction is expected to close in four weeks subject to satisfying certain precedent conditions and obtaining regulatory approvals. Mezzan’s investment in the JV is expected to be worth between KWD7m and KWD7.7m (US$23m-26m).
Following the second-quarter results announcement, Walsh predicted a stronger second-half to the year as new business comes on stream.
“We will continue to invest prudently in our brands and infrastructure to ensure we deliver quality products to our customers and consumers, while continuing to insist that we spend wisely as we seek to maximise shareholder value,” he added.