The Organic Meat Company – a brief profile

The Organic Meat Company (TOMC) is a halal meat processor whose exports constitute more than 95% of total sales. The company provides best quality of raw lamb, goat, sheep, cow, buffalo and bull meat to their customers around the world while following stringent hygiene policies and halal standards. The company was incorporated in 2010 and established its slaughtering and meat processing facility at Gadap with two key products, which includes fresh chilled beef/mutton and fresh boneless beef. Since its inception, the company became a great success story as it continued to increase its production capacity and exploring new product lines, enabling it to contribute 8% to the country’s meat exports. Exports by majority of the local peer companies are in the Middle East region. However, the exporting destinations of the TOMC are Middle East, Far East, China, and CIS countries, which gives them additional advantage over peer companies.

Past Financial Performance

During last five years, company sales grew at CAGR of 28% from PKR 962mn in FY15 to PKR 3.3bn in FY20E. This is primarily due to continuous expansion in capacity and exploration of new markets to increase the global footprint. Likewise, bottom-line of the company grew significantly at a 5-yr CAGR of 44% due to depreciation of PKR against regional currencies which directly increased gross margins of TOMC while efficient procurement of animals also reduced cost of goods (COGS); 93% of costs are related to animal procurement. However, the only challenge is liquidity as the company has to purchase raw materials (livestock) on advance payment basis from suppliers while it receives payment in 3-4 months from its customers. To manage the liquidity position, company is largely dependent on short term borrowing which is currently over PKR 700mn. (AHL Research)

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