December 23, 2021 (MLN): With all the groundwork ready, Al-Shaheer Corporation Limited (ASC) is all set to formally launch its frozen meat brand “Chef One” by Jan-22, expected to generate a volume of around 160-200 tons per month, the management of the company informed during a recent corporate briefing.
The delay in plans was due to increasing dollar parity which caused replacement and operational costs to increase.
“The market is saturated with respect to nuggets etc. with a clear leader that has amassed that position over decades. So, to make your way, one has to do product differentiation,” the company CEO Kamran Khalili told Mettis in an interview.
The management further disclosed that it has set a target to acquire 3.6% market share (2,000 tons) in the launch year as the company is on its toes to make the product available at all locations as per demand, and for the major arrangements have been made such as the procurement of freezers.
All types of meat products – chicken, beef, seafood – would be offered under the said brand wherein the company has divided them into core, innovator and disruptor categories. The range will not be limited to just snacking items, he added.
The management targets 300/165tn for chicken and value-added products line, and expects skewness to converge to 60/40% for existing bonus/chef-one business line and contribution margins for the new business segment of 45% by growing at CAGR of 5% and overall margins improving to 30%, the key takeaways covered by foundation securities cited.
To note, the company had reported profitability of Rs127mn (EPS 0.42) in 1QFY22, compared to the same period last year profit of Rs79mn (EPS 0.26), up by 60% YoY. The company’s turnover for FY21 clocked in at Rs5.4bn, showing a 37% YoY increase. Net sales consist of 20/80% domestic/exports.
Product-wise, export sales have skewed towards beef in recent years, from 75/25% to 97/3% for beef and mutton respectively. This reduction in mutton export was mainly due to a surge in prices.
The major export destinations for the red meat segment are UAE and Saudi Arabia which are expected to grow by 5-10%. Meanwhile, unlocking the Egyptian market could provide significant growth potential, as Pakistan has been granted approvals from Egypt’s Veterinary Quarantine Department.
In addition, the management expects successful negotiations with China that would provide a gateway to the Chinese population.
With regards to rupee depreciation, the company management sees that falling domestic currency is beneficial for the company due to its high exports, however, other players in the industry increase their trade discounts that erode the benefit.
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