Reem Rice Mills (Private) Limited (“Reem Rice” or “the Company”) is a private limited company incorporated in Lahore in 1994.

The Company represents a joint venture between two prominent Middle Eastern conglomerates, the Al Ghurair Group of the UAE and the Al Muhaidib Group of Saudi Arabia. Initially focused on export markets, Reem Rice has recently expanded its operations to serve the domestic market in Pakistan. Over time, the Company has progressively developed its capabilities, exporting premium-quality rice to various countries across the Middle East and Europe.

Reem Rice is primarily engaged in the production of high-quality basmati rice varieties sourced from the natural paddy cultivated in West Punjab. The Company offers an extensive range of rice products, beginning with the procurement of paddy directly from local farmers, which is subsequently processed into refined, premium-grade head rice. Its products are marketed under both premium and popular brand portfolios. Operational capabilities include a 10 metric ton per hour milling facility, complemented by an additional 5 metric ton per hour rice-to-rice processing plant.

The ownership of Reem Rice Mills (Private) Limited is equally divided between the Al-Muhaidib and Al-Ghurair Groups, each holding approximately a 50% stake through their respective investment arms. A nominal shareholding is held by individual investors.

Reem Rice is wholly owned by these two well-established Middle Eastern conglomerates. The current ownership structure is stable, with no anticipated changes in the near term, thereby ensuring continuity and governance consistency.

The Al Ghurair Group, based in the UAE, is a diversified conglomerate with significant interests across food production, resource trading, real estate, construction, energy, and mobility sectors, among others. The Al Muhaidib Group (AMG) similarly operates across multiple industries including food and consumer goods, industrial infrastructure, real estate, and financial investments. Notably, Mayar Foods—a flagship company within AMG—is a leading distributor and marketer of rice, recognized as a premium rice supplier in the Kingdom of Saudi Arabia.

Both groups demonstrate financial standing characterized by substantial equity bases and diversified investment portfolios. This financial resilience underscores the sponsors’ capacity to provide continued support to Reem Rice if required.

The Company’s Board of Directors consists of five members, with representation divided between the two principal shareholders: two directors from the Al-Muhaidib Group and three from the Al-Ghurair Group. Currently, there are no independent directors on the board, which may limit the scope for enhanced governance oversight.

All directors bring extensive expertise and diverse business experience, each with over two decades of involvement in senior leadership roles across various international corporate entities.

The Board convenes quarterly in compliance with regulatory requirements. These meetings typically see strong attendance, and minutes are meticulously documented, reflecting positively on the Board’s operational effectiveness. Additionally, the Board has established an Audit Committee to reinforce governance standards.

The Company’s financial statements for the year ended August 31, 2024, were audited by M/s. PKF F.R.A.N.T.S., Chartered Accountants, listed in Category ‘B’ of the State Bank of Pakistan’s Panel of Auditors. The auditors issued an unqualified opinion, affirming the accuracy and reliability of the financial disclosures.

Reem Rice maintains a well-structured organizational framework, segmented into six core departments at the first tier: (i) Plant Operations, (ii) Accounts & Finance, (iii) Human Resources & Administration, (iv) Information Technology, (v) Sales, and (vi) International Business. Each department operates with clearly defined roles and responsibilities, with all department heads reporting directly to the Chief Executive Officer.

The Company’s overall management is led by Mr. Khalid Farooqui, Chief Executive Officer, who brings approximately 27 years of relevant industry experience. The CEO is supported by a team of highly qualified professionals and holds accountability for all key strategic and operational decisions.

Leveraging the expertise of its experienced management team, Reem Rice is effectively strengthening its market position and expanding its footprint beyond Pakistan. The management’s functions are clearly articulated and aligned with the Company’s strategic objectives. Formal management committees, including Sales & Operations, Procurement, and Human Resources, convene regularly to address routine operational matters.

The Company has implemented the SAP business platform to enhance the accuracy, efficiency, and timeliness of its reporting processes.

Reem Rice adheres to a balanced and environmentally conscious growth strategy. The Company is committed to sustainable development principles, prioritizing the minimization of environmental impact while maintaining responsibility towards social stakeholders.

Rice is among the five major crops of Pakistan and is the second main staple food, after wheat. The segment contributes 2.5% in agriculture value addition and 0.6% in GDP. Pakistan cultivates both Basmati and Non-Basmati rice, most of which is exported. Rice is grown in most of Sindh and Punjab. Sindh specializes in producing long-grain white rice such as IRRI-6 and IRRI-9, while Punjab produces world-class Basmati rice. Pakistan locally consumes Basmati Rice, which is considered a premium category across the globe. Local consumption includes approximately 90–95% Basmati rice and ~5–10% Non-Basmati rice. Major players in rice exports include Pakistan, India, Thailand, and Vietnam. Pakistan remains in direct competition with India, while Thai and Vietnamese rice are considered premium and higher-priced. Rice sector exports rose by ~62.0% YoY to ~6.0mln MT in FY24 (FY23: ~3.7mln MT). Exports of Basmati rice stood at ~0.8mln MT (FY23: ~0.6mln MT), forming ~13.3% of total rice exports, while exports of Non-Basmati rice stood at ~5.2mln MT in FY24 (FY23: ~3.1mln MT), forming ~86.7% of total rice exports.

Reem Rice is one of the leading names in the country’s rice exporters market.

During FY24, the topline of the Company clocked at PKR~3,749mln (FY23: PKR3,100mln), registering a positive growth of ~21%, reflecting robust volumetric growth and price competitiveness, especially in exports. Export sales made up ~91.6% (FY23: 72.3%) of total revenue, amounting to PKR~3,432mln (FY23: PKR2,243mln), while local sales stood at PKR~329mln (FY23: PKR865mln), showing a notable shift in revenue mix toward exports.

The Company’s gross margin improved to ~17.5% in FY24 (FY23: ~13.3%, FY22: ~6.3%). Operating profit margin also rose to ~8.9% (FY23: ~5.1%), reflecting enhanced cost control and operating efficiency. However, the net profit margin deteriorated to ~-10.5% in FY24 (FY23: ~-4.1%), primarily due to higher finance cost amid rising interest rates and working capital financing pressure.

Reem Rice’s management envisage sustainable footing in the international markets by investing in new technology and machines to add value to the rice supply chain. Going forward, the Company intends to tap new export markets, expand brown rice SKUs, ensure synergies with parent group companies for adding rice from Pakistan to groups’ international brands, and expand its distribution network all across Pakistan.

The Company's capital needs are primarily driven by inventory and receivable financing, largely funded through STBs. During FY24, gross working capital days increased to approximately 110 days (FY23: ~80 days), primarily due to higher inventory buildup. This increase is considered a temporary phenomenon resulting from the Red Sea crisis, which disrupted international trade and caused halts in operations at Pakistani ports. Average inventory days rose to ~61 days (FY23: ~34 days), while net working capital cycle extended to ~98 days (FY23: ~74 days), in line with elevated export volumes and extended customer credit terms.

In FY24, the Company’s free cash flows from operations (FCFO) stood at PKR~307mln (FY23: PKR~352mln). The interest coverage ratio declined to ~0.5x (FY23: ~0.9x) due to rising finance costs. The core-debt coverage ratio also fell to ~0.1x (FY23: ~0.3x), indicating increased financial stress from a liquidity standpoint.

Reem Rice continues to operate with a highly leveraged capital structure, with the ratio rising to ~135.2% as of FY24 (FY23: ~127.4%). Total borrowings increased to PKR~3.5bln (FY23: ~PKR2.2bln), mainly short-term in nature. The equity base remained negative at PKR~1,019mln (FY23: ~PKR556mln negative), further pressuring financial sustainability. Despite revenue growth and margin expansion, debt-driven expansion and limited internal cash retention continue to constrain capital structure flexibility.