RAFHAN MAIZE PRODUCTS CO LTD.

MUHAMMAD AQEEL KHAN
Research Associate
July 23 - 29, 2007

A CORN REFINER WITH GLOBAL REACH

Rafhan Maize Products Co. Ltd., the No. 1 producer of Corn refining products in Pakistan, is an affiliate of Corn Products International, Including USA. Corn Products International, founded in 1906, is one of the largest corn refiners in the world and its operations span 5 continents with more than 22 countries with subsidiaries, joint ventures and alliances. Rafhan's affiliation with a global company enables to guarantee quality products, consistent supply and unequaled service.

BUSINESS OPERATION

Rafhan Maize Products Co. Ltd. started its operations in 1953 as a pioneer maize processing industry in Pakistan. From relatively modest start, the operations of Rafhan Maize have now grown into one of the largest agro-based industry in Pakistan. The company is listed on Karachi Stock Exchange with ISO-9002 Certification having principal activities are to produce corn oil, industrial starches, liquid glucose, dextrose, dextrin, gluten meals and other corn related products. The Company also manufactures a wide-range of co-products such as gluten feeds, meals, germ cake and hydrol. The brand and products of the Company are PENETROSE, AMISOL, TEX-O-FILM, and CERELOSE Dextrose and MOR-SWEET high maltose syrup.

DISTRIBUTION OF SALES

2006

PERCENT

Material & Services

71.00%

Dividend & Retention

13.20%

Employee Cost

8.70%

Taxtation

7.10%

GROWTH PATTERN

On its six years road to success, Rafhan Maize Products Co. Ltd achieved sales of Rs.6,127 million in 2006 against Rs.5,194 million last year; an impressive increase of 18%. The profit after tax improves to Rs.809 million against Rs.615 million of the last year; indicate that the customers full confidence on companyís product and services, record increase of 31.54%. The earnings per share were improved by 32%.

LAST SIX YEAR FIANCIAL HIGHLIGHTS

Rs. In million

2006

2005

2004

2003

2002*

2001

Net Sales

6,127

5,194

4,534

4,031

4,390

3,126

Cost of Sales

4,556

3,997

3,259

3,001

3,329

2,345

Gross Profit

1,571

1,198

1,275

1,030

1,061

781

Sales - %

26%

23%

28%

26%

24%

25%

Operating Profit

1,321

978

1,101

893

916

681

Sales - %

22%

19%

24%

22%

21%

22%

Profit Before Tax

1,252

953

1,050

848

834

586

Profit After Tax

809

615

670

521

527

347

Capital Expenditure

122

302

448

415

239

121

Earnings Per Share - Rupees

87.62

66.57

72.51

56.43

57.06

37.62

Dividend Amount

647

323

286

259

259

134

* Data for 15 months

PRODUCER OF HIGH QUALITY PRODUCTS

Rafhan Maize produces high quality food ingredients and industrial products. All these products have leading market position and are being used in more than 50 types of industries in Pakistan and export markets in the region. Rafhan Maize native starch and its chemically modified derivatives are used in different industrial and consumer products. Rafhan Maize Gluten Feeds, Corn Germ Cake and Prairie Gold Maize Gluten meal are nutritious, high protein products which are used by feed formulators for livestock and poultry feeds.

TEXTILE SUPPORT PRODUCTS

Rafhan Maize products are being supplied as essential raw material to the textile, paper, corrugation, confectionery, bakery, pharmaceuticals, chemicals, tobacco, foundry, beverages, syrups and squashes, processed foods, poultry/cattle feeds and other Food and non-Food industries.

The Technical Center at Rafhan Maize holds one of the most sophisticated laboratories in Pakistan. The Center is responsible to develop new products and modify the existing range to cope with the changing requirements of customers and overcome the functional problems connected with application of products in different industries.

CONTRIBUTION TO AGRICULTURAL DEVELOPMENT

The development of spring maize crop (March-June) as a second crop of maize (corn) by Rafhan Maize is a great contribution in the agricultural growth. Rafhan Maize plans to further strengthen Contract Maize Farming Programme to give boost to the local farmers to produce high yielding varieties of maize and enhance their earnings.

FIRST QUARTER FINANCIAL REVIEW

Rafhan Maize Products Co. Limited recorded profit after tax of Rs.291,853 mn. (EPS Rs.31.60) during 1Q07 compared to Rs.1,66,426 mn. (EPS Rs.18.02) during the same period of last year, showing an improvement of 75.37%. The company witnessed a significant growth of 29% which was mainly due to the 28% and 35% increase in local and export sales respectively, resulting in an increased to Rs22, 050m and Rs1, 355m over the last year. Due to the entry of new players in the market, the company has become calm in the sales and promotions of its product which has resulted in a 71% declining in operating expenses. Financial charges during the year have significantly increased to Rs.1, 279m in 2006 from Rs.1, 184m in 2005 showing an increase of 8.02%.

RS. IN THOUSANDS

2007 JAN - MAR

2006 JAN - MAR

% CHANGE

Sales Revenue

1,774,607

1,458,760

21.65

Cost of Good Sold

1,225,564

1,125,333

8.91

Gross Profit

549,043

333,427

64.67

Distribution and Selling Exp

46,603

20,650

125.68

Administrative expenses

38,339

35,629

7.61

Operating profit

464,101

277,148

67.46

Finance cost

1,279

1,184

8.02

Other operating expenses

33,162

19,393

71.00

Other Income

17,783

7,153

148.61

Profit before taxation

447,443

263,724

69.66

Taxation

155,590

97,298

59.91

Profit after taxation

291,853

166,426

75.37

Earnings per share

31.60

18.02

75.36