PACRA Maintains Entity Ratings of Reem Rice Mills (Private) Limited

Reem Rice Mills (Private) Limited (“Reem Rice” or “the Company”) is primarily engaged in the milling, reprocessing, and sale of rice for both domestic and international markets. It operates as a joint venture between two prominent Middle Eastern business groups — Al Muhaidib Group (Saudi Arabia) and Al Ghurair Group (UAE). The ratings incorporate Reem Rice’s strong sponsorship profile, underpinned by the sponsors’ ongoing strategic and financial support. The Company specializes in converting raw rice into finished, market-ready products. Punjab and Sindh collectively account for ~95% of Pakistan’s total rice production, with Punjab contributing ~50–56% and Sindh ~38–39%. During 9MFY25, rice exports modestly grew by ~5% on an annualized basis and stood at ~4.7mln MT (FY24: ~6.0mln MT). Total export value in this period recorded at USD 2,760mln (FY24: USD 3,932mln). Basmati rice exports contributed ~0.7mln MT in total exports in 9MFY25 as compared to ~0.8mln MT in FY24. Looking ahead, export volumes in FY25 may face some pressure following recent policy developments in India. In March 2025, the Indian government lifted its export ban on rice and eliminated the minimum export price requirement, increasing competitive pressures in international markets. This may affect the export performance of Pakistani rice producers. Nonetheless, long-term sector fundamentals remain stable, supported by sustained global demand. Reem Rice exports ~92% of its total volumes, with the remaining 8% sold in the domestic market. The Company’s export portfolio is currently concentrated in the Middle East; however, management is actively pursuing regional diversification by expanding into new markets, including Europe and the United States During FY24, the Company posted net sales of ~PKR3.7bln, marking a ~21% Y-O-Y increase (FY23: ~PKR3.1bln), supported by higher export volumes and improved product pricing. Gross margins improved to ~17% (FY23: ~13%) due to favorable portfolio mix. Operating profit remained stable at ~PKR 333mln (FY23: ~PKR 338mln). The Company recorded a net loss of ~PKR 394mln (Loss FY23: ~PKR 127mln) mainly due to finance cost at high borrowing rates in the country. As part of its high-margin products diversification strategy, Reem Rice introduced value-added products, including Nutri-grain flour and a premium health-focused rice range. The business revival plan is currently in progress, with several key milestones yet to be achieved. The Company also aims to strengthen its liquidity position through the reprofiling of its debt matrix. The financial risk profile is characterized by a stretched working capital cycle, low coverage ratios, and a leveraged capital structure, while this risk is partially mitigated by the implicit support from foreign sponsors.
The ratings remain contingent on the successful execution and rationalization of management’s strategies to strengthen the Company’s position in the global market amid a challenging business environment. Sustained revenue growth, improved profit margins, and a stable financial risk profile will be critical factors going forward. Furthermore, performance alignment with shared financial projections will remain important.

About the Entity
The Company was founded in 1994 as a joint venture between Al Muhaidib Group and Al Ghurair Group, manufactures and exports premium rice. The board includes 5 members. CEO, Khalid Farooqi, having three decades of notable experience of leading multinationals in FMCG sector, spearheads a team of skilled professionals.