Matco Foods to belisted in September

KARACHI: Matco Foods, Pakistan’s largest rice exporter, is going for listing in the stock market in September this year to raise funds for its new plant in Karachi.

Faizan Ali Ghori, director, Matco Foods, in an interview with The News said that funds to be received through Initial Public Offering (IPO) of Matco Foods in September would be invested on a new plant in Karachi.

Matco Foods has major stakes in Basmati rice. Being the largest Basmati exporter of Pakistan, it exports to around 65 countries. “Our brand ‘Falak’ is the largest selling Basmati brand from Pakistan,” he said. Matco processes around 100,000 tons of Basmati per year. It has also been financed by World Bank’s institute IFC.

Ghori, who is also a member executive council of Rice Exporters Association of Pakistan (REAP), said Matco was also going in the business of other foods, as seller of imported biscuits, wafers, rice flour, gram flour, oil, pink salt, etc, since Pakistan has one of the highest consumption to GDP ratio in the world.  

He said the company was investing in the new business of organic rice glucose and organic rice protein products, which would be used by other companies, mostly in their baby products. “Majority of glucose is extracted from corn, but in Europe and the US, corn syrup is being replaced with rice,” he said. “Since rice is not genetically modified, it is least likely to cause allergy.”

Matco’s plant would have capacity of 10,000 tons per year of rice glucose and rice protein, and the plant would start operations this month at a preliminary investment of Rs350 million.

Another plant of this type would be established at Port Qasim in the next phase, where a land of 10 acre has been purchased and further funds would be generated from the IPO. “In the next phase, we will develop dextrin (powdered) glucose,” Ghori said.

Talking on Federal Budget 2017-18, he said overseas financing for warehousing would be beneficial for non-Basmati exporters, especially those who export to African countries, where Pakistan’s IRRI rice was mostly consumed as staple food. “People can establish their warehouses there and get financed,” he said. “We will have advantage in Kenya market with it.”

This was a proposal of REAP, which was incorporated in the budget. Besides African countries, China is also a big market for IRRI. “Last year, Pakistan exported 0.5 million tons to China but this year it (China) is importing from Vietnam and other countries,” he said.

Matco processes Basmati in all four types; unrefined brown rice, refined Basmati, parboil (sela) and steamed Basmati. “We are using latest technology and have imported machines from Japan and Germany,” Ghori said.

He said alarmingly seed development was not here, so yield was too low. Hybrid seeds provided 90 to 100 maunds per acre in the world while our production was at a maximum level of 60 maunds. “No new variety of Basmati was developed after late 80s,” he said. “A famous Basmati variety 1,121 was developed in India and smuggled in Pakistan.”

Matco exports around 80 percent of its production and sells 20 percent in the local market. However, it is planning 50 percent sales in the local market in the coming 5-6 years, as “People here are saving their time of rice cleaning and more people are going towards processed and cleaned rice,” he said.

He suggested that Pakistan should focus on seed development, as plant scientists in India were doing, but regretted that the Rice Research Institute was not developing any seeds on commercial level. “Our yields are lowest per acre,” he said. “Mechanical transplantation should be here.”

He said REAP has been suggesting the government to allow it to use Export Development Fund to use on farmers’ education and research.

Matco is growing organic rice in Punjab while lands in Golarchi, Sindh is under conversion, as it takes three years to land for the conversion for organic plantation. “We have received USDA and EU organic certification,” he said. “Last year Matco exported 300 tons of organic rice.”