Press Release
VIS Upgrades Entity Ratings of Matco Foods Limited
Karachi, January 01, 2026: VIS Credit Rating Company Limited (‘VIS’) has upgraded the entity ratings of Matco Foods Limited (‘MFL’or ‘the Company’) at ‘A-/A2’ (A Minus/ A Two). The medium to long-term rating of ‘A-’ signifies good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. The short-term rating of ‘A2’ denotes good likelihood of timely repayment of short-term obligations with sound short-term liquidity factors. Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on January 06, 2025.
Matco Foods Limited (MFL) or ('the Company') was incorporated on April, 1990 in Karachi as a private limited Company and listed on Pakistan Stock Exchange Limited on February, 2018. The Company business primarily engages in the processing and export of rice and associated products. The Company also provides a complete line of corn starches and corn based animal nutrition products. In addition, Matco also provides a wide variety of culinary and convenience food items. MFL is selling its products under the brand name ‘ Falak’ and private labelling including brand names: Amber, Areej, Bahar, Everyday, Falak, Fiza, Rojan, Sevan, Sunbul, Rice glucose, Rice protein, Maltodextin, Dextrose monohydrate and cornstarch. The Company's products include predominantly basmati rice, rice glucose, rice protein, rice maltodextrin, corn starch, Himalayan pink salt, and other gourmet salts, spices, dessert mixes, and many more. The Company's operations span five rice processing and milling plants, incorporating paddy drying, storage, and husking facilities situated in Sadhoke, Punjab, and Karachi, Sindh while the Corn Starch plant is located in Faisalabad, Punjab. The Company also has 100% ownership of JKT General Trading FZE, a United Arab Emirates-based subsidiary registered with the Government of Sharjah. The subsidiary's business involves the purchase and sale of processed rice. Matco Foods also has a 49% ownership in Barentz Pakistan Private Limited which is engaged in the business of processing and export of rice, glucose, protein and flour, manufacturing, general trading, exports/imports and other related activities. During the year, the Board approved the separation of two divisions — the Corn Starch Division and the Falak Foods Division — into wholly owned subsidiaries, namely Matco Corn Products (Private) Limited and Falak Foods (Private) Limited. Additionally, Matco Marketing (Private) Limited was renamed Falak Foods (Private) Limited (FFPL) to serve as the dedicated entity for the Falak Foods Products Division.
The assigned ratings reflect Matco Foods Limited’s (MFL) sound market position in Pakistan’s rice export sector, governance strength supported by experienced sponsors and International Finance Corporation (IFC), and improving profitability. Historically, earnings were diversified across rice exports, corn starch, and ‘Falak’ branded foods, which supported higher margins and resilience during rice market volatility. However, the ongoing carve-out of corn starch and ‘Falak’ businesses will concentrate MFL’s operations in lower-margin rice exports, resulting in the loss of historical margin advantage and increased sensitivity to commodity price and export demand fluctuations. Financial risk is marked by high leverage and gearing, which constrain profitability. In FY25, profitability and debt coverage improved, supported by cost efficiencies, margin gains, and operational optimization. Assigned ratings are underpinned on planned deleveraging through equity injection and internal cash generation, alongside efforts to improve gross and net margins in core operations. The successful execution of the carve-out, margin stabilization, and continued balance-sheet strengthening will be key for ratings, going forward.
For further information on this ratings announcement, please contact on 021-35311861-64 or email at info@vis.com.pk
Applicable Rating Criteria:
Industrial Corporates
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf