Riyadh, July 19 - Saudi Arabia's Savola Group said on Saturday it would invest 6.5 billion riyals ($1.7 billion) by 2010 to expand after it said it would buy 80 percent of Pakistan's third largest edible oil maker.
Savola will target core activities, that include food, retail, plastics and real estate, for its expansion, the kingdom's largest food product company said in a statement.
The planned acquisition of Pakistan's Agro Processors, which Savola announced earlier on Saturday, will be a prelude for more deals in South Asia focusing on food products, it said.
It has also finalised a partnership agreement with the local private Al-Muhaidib Group, which will help Savola boost its existing sugar business and add the trade of rice to the activities of a newly set-up Savola Foods, it added.
Savola's shares are down more than 10 percent this year to last week's close, outperforming the main index <.TASI>, which has dropped almost 20 percent. But they were trading up more than 5 percent at 1205 GMT on Saturday.
Savola is the world's largest maker of branded cooking oil and the Middle East's largest producer of refined sugar with an annual production capacity of 2.6 million tonnes, which it plans to increase to 5 million tonnes in the next five years mainly by building new refineries chiefly in Egypt and Turkey.
It posted a 66.3 percent drop in second-quarter net profit after a one-off gain from an asset sale bolstered profit a year earlier and an operating loss of 57 million riyals linked to the start-up in June this year of a 750,000 tonne per year sugar refinery in Egypt.