Matco Foods

Initial Public Offering

Strictly Private & Confidential

October 2017
Upcoming IPO: Matco Foods Limited
Transaction Overview

Matco Foods Limited (“Matco” or the “Company”) is in the process of raising capital through listing on Pakistan Stock Exchange (“PSX”). The Company has
applied at PSX and is expected to commence marketing for its capital raising process post approval of PSX and the Securities and Exchange Commission of
Pakistan (“SECP”)

The proceeds of the IPO would be used for enhancing the capacity of its existing Rice Glucose and Rice Protein plant from 10,000 MT to 30,000 MT per
annum

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Key Company Highlights
STRONG MANAGEMENT TEAM
The Company has over 50 years of experience
in rice industry. The Directors of the company
have in-depth knowledge of the sector which
has enabled Matco to cement its linkages and
foster new ties with the industry players.
INVESTMENT BY IFC
International Finance Corporation (“IFC”), a
World Bank Group Company , has a 20% stake
in the Company assuring strong credentials &
potential for growth in Matco
STRONG CORPORATE GOVERNANCE
The Company is in compliance with the Code of
Corporate Governance. This has enabled the
company to be managed in a manner that fits the
best interest of all stakeholders.
DIVERSIFICATION
Matco has recently diversified its operations into
other higher margin products such as Rice
Glucose/Syrup and Rice Protein for striving future
business growth of the Company
ONE OF THE LARGEST RICE EXPORTER
Matco is one of the largest rice exporters from
Pakistan. Its products are available in 60+
countries worldwide with a global portfolio of
150+ customers.
BLUE CHIP STICKY CLIENT BASE
Matco serves some of the largest corporations
globally who have steady supply chain process and
do not switch suppliers easily
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Matco Foods Limited

Opportunity to invest in a leading rice exporter of Pakistan with strong future prospects
Matco Foods Limited Financial Snapshot
1. Matco is one of the largest rice exporter from Pakistan; it is engaged in PKR in millions 2013 2014 2015 2016 2017
production of rice and rice related products which are available in 60+
Income Statement
countries worldwide. Its products include conventional and organic rice in
steam and parboiled form. Matco also produces rice flour, gran Revenue 6,289 8,160 6,089 5,578 6,134
flour(basin), salt and other allied products. EBITDA 539 524 614 345 641
2. The Company operates five rice processing and milling plants, including Profit after Tax 131 177 98 4 269
paddy drying, storage, husking, processing and packaging facilities Balance Sheet
3. Matco has also recently diversified into other rice products i.e. Rice Total Assets 5,844 7,408 7,448 6,907 8,235
Glucose and Rice Protein
Shareholder’s Equity 2,237 2,930 3,018 2,885 3,143
─ The current production capacity for Rice glucose and protein is
10,000 MT and 1,000 MT per annum respectively Total Liabilities 3,604 4,478 4,430 4,022 5,092
Major Products Major Clients Ownership Structure

IFC
20%

Ghori Family
80%
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Company Overview
Matco Foods Limited Key Stats

1. Matco is primarily engaged in processing and export of rice and rice related
134,700 MT
products Processing Capacity
Per Annum
2. The Company was setup by Mr. Sarfaraz Ali Ghori in 1964 as a supplier of rice
processing plant and machinery to Government of Pakistan and Other Five (5) Processing
Processing Plants
Companies Plants

3. Matco’s flagship brand “Falak” is available in more than 40 countries

worldwide, while other private label brands are exported to over 60 countries Experience 50 Years
worldwide
4. Today the Company is a leading agribusiness in South Asia, with over 50 years Corporate Customers >150
of experience in the rice industry and global portfolio of 150+ customers
5. In 2012, International Finance Corporation (“IFC”) invested PKR 458 million in
the Company IFC Investment PKR 458 Million

6. The Company’s rice processing facilities are spread over 1,000,000 sq. feet
with 5 rice processing and milling plants which includes paddy drying, storage, No. of Export
>65
husking, processing and packaging facilities in Karachi and Sadhoke Countries

7. The Company has an annual rice processing capacity of around 134,700 Metric
tons Employees 500+

Long Term: A-
Credit Rating
Short Term: A-2

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Products

Matco’s main strength and focus is on Basmati rice which only grows in Pakistan and India and is considered the most premium variety of rice in the World.
Matco also sells some other products like pink salt, rice bran oil, rice flour, besan, etc. Matco is also the sole distributor of Signature Snacks for Pakistan

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 Processing Facilities
Presently Matco’s rice processing facilities are spread over 500,000 sq. feet at 4 separate locations (Matco I, Matco II, G-205 and Matco Small Packaging) in
the port city of Karachi

Jacobabad
Shikarpur
Ghotki
Larkana Sukkur

DaduNaushahro Feroze
Khairpur

Shaheed Benazirabad
 Rice production capacity – 94,290 MT of raw rice per
G-205 Sanghar
annum
 Small packaging unit 5MT/hr
Matco I Hyderabad Umerkot
 Matco G205 – 15MT/hr
Matco II Karachi City
Badin Tharparkar
Thatta
Small Packaging unit

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Processing Facilities Cont’d

Matco has installed another state of the art rice husking/parboiling plant on 15 acres of land in Gujranwala, the world renowned rice cultivating district of
the country, popularly known as Basmati Bowl of Pakistan

Attock
Rawalpindi
Chakwal Jhelum
Mianwali Gujrat
Sialkot
KhushabSargodha Gujranwala Narowal

Bhakkar Chiniot Sheikhupura

Lahore
Jhang Faisalabad
Layyah Toba Tek Singh
Kasur
 Rice processing capacity – 40,410 MT per annum
Okara
Sahiwal
Dera Ghazi Khan Khanewal  Rice storage capacity - 32,000 MT
Muzaffargarh Vehari
Multan
Bahawalnagar  Paddy drying capacity - 25 MT/hr
Rajanpur  Parboiling capacity - 100 MT/day
Bahawalpur
Rahim Yar Khan  Milling capacity - 20 MT/hr (2 lines)

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Global Export Sales
Matco is one of the Pakistan’s leading rice exporting company with exports to over 60 countries around the world. The Company’s Falak brand is prominent
in more than 40 countries, a feat achieved in 15 years through an extensive network of more than 65 distributors internationally.

Customers Country
Rice Growers Limited T/A SunRice Australia
Riviana Foods Pty Ltd Australia
Herba Rice Mills Spain
East West Foods Pvt. Ltd Sri Lanka
Comilla Jahra Foodstuff Co. W.L.L Bahrain
Ostindo International Pty Ltd Australia
Unikai United Arab Emirates
Alam Supermarket Llc United Arab Emirates
Fineway International Trade. Llc United Arab Emirates
Euricom Spa Italy

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 Falak’s Brand Awareness
Matco’s Flagship brand “Falak” is one of the Pakistan’s leading rice brand with market presence across all major localities and stores in Pakistan. Falak rice is
available in over 4,000 retails shops in 36 cities all over the country

Below are the results of a rider survey conducted by Nielsen in November 2014 on the request of Matco Foods Limited on branded rice market in Pakistan. Nielsen
Survey was focused on 6 premium rice brands and their awareness in different cities of Pakistan. The focus group was asked whether they knew about the presence of
following rice brands in the Pakistan market.

Falak Awareness in Karachi Falak Awareness in Lahore Falak Awareness in Islamabad / Rawalpindi
73% 56% 54%
89%

27% 21% 24% 16%

20%
15% 18%
4%
0% 0% 0% 0% 0% 0%

FALAK GUARD NATIONAL REEM KALAAR MUGHAL FALAK GUARD NATIONAL REEM KALAAR MUGHAL FALAK GUARD NATIONAL REEM KALAAR MUGHAL

In Karachi, 89% of the people in focus In Lahore, 21% of the people in focus In Islamabad/Rawalpindi, 56% of the
group were aware about the presence of group were aware about the presence of people in focus group were aware about
Falak in the market. Falak in the market. the presence of Falak in the market.

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Expansion of Rice Glucose Project
Rice Glucose / Rice Protein Expansion Cost Rice Glucose / Rice Protein Plant Capacity

1. Matco has recently diversified its operation with domain specialized 30,000
products i.e. Rice Glucose and Rice Protein with a capacity of 10,000
MT and 1,000 MT respectively. (Phase I of expansion plan) 20,000
2Q FY 2019 30,000
2. The Company plans to further expand Rice Glucose / Rice Protein
production capacity by installing an additional unit of capacity 10,000
20,000 MT, bringing total capacity of Rice Glucose plant to 30,000 10,000
MT by FY2019. (Phase II of expansion plan) -
MT FY 2018 FY2019
3. Proceeds from IPO will be utilized for the Phase II of expansion of
Rice Glucose Plant. Expansion of Rice Glucose / Syrup and Rice protein plant is expected to be
completed by end of November FY 2018
4. The company has already acquired 10 acre land for expansion of Rice
Glucose and Rice Protein project Rice Glucose USP
5. Matco has also started selling rice glucose in local market to various The Rice Glucose has the following properties:
end users in confectionary industry.
1. Hypoallergenic - relatively unlikely to cause an allergic reaction
6. This is forward vertical integration for Matco and value addition is
easily available in the form of by-product of Matco i.e. broken rice 2. Gluten-free – It is free from Gluten which may cause inflamation

3. Label Friendly

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Financial Summary
Audited Forecast
PKR in millions 2014 2015 2016 2017 2018 2019 2020
Revenue 8,160 6,089 5,578 6,134 7,803 9,627 11,245
Cost of Goods Sold (7,279) (5,194) (4,939) (5,169) (6,593) (8,176) (9,550)
Gross Profit 881 895 639 965 1,210 1,450 1,695
EBITDA 524 614 345 641 781 1,012 1,207
Financial Charges (333) (294) (204) (212) (192) (214) (192)
Profit before Taxation 254 160 38 342 440 602 797
Profit after Taxation 177 98 4 269 350 492 669

Non Current Assets 2,000 1,928 1,830 2,176 2,545 2,765 2,591
Current Assets 5,408 5,520 5,077 6,059 6,258 7,006 7,541
Total Assets 7,408 7,448 6,907 8,235 8,803 9,771 10,132
Total Equity 2,930 3,018 2,885 3,143 4,237 4,729 5,398
Non Current Liabilities 228 239 315 499 445 400 356
Current Liabilities 4,250 4,191 3,707 4,593 4,120 4,642 4,377
Total Equity and Liabilities 7,408 7,448 6,907 8,235 8,803 9,771 10,132

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