KARACHI: Nishat Group has completed its acquisition of Nishat Group Rafhan Maize, acquiring an overall controlling interest of 73.9 percent in the Rafhan Maize Products Company Limited, which is a major producer of maize products in Pakistan. The acquisition was made mainly from the shares of Ingredion USA, the majority stockholder of the company, as well as other minority stockholders.
Ingredion still holds a 20% share of the company after the deal, which is consistent with the long-term interest that Ingredion – the largest ingredient solutions provider in America – has in Pakistan and the entire region.
A Turning Point for Both Companies
According to Hassan Mansha, Chairman of Nishat Mills Limited, the acquisition of Nishat Group Rafhan Maize by the company was a turning point for both the companies. Hassan states that this deal proves the standing of the group as one of the most prestigious industrial houses of Pakistan.
“With our complementary strengths of Rafhan in corn refining and specialty starches and Nishat’s in energy, large-scale production, and experience in manufacturing, we are well-equipped to build value-added products, serve our customers throughout Pakistan, and generate exports to new markets,” Mansha said.
The Role of Rafhan Maize Products as an Input to Multiple Industries in Pakistan
Rafhan Maize Products occupies a unique place in the manufacturing industry of Pakistan. The company produces a range of industrial and edible starches and sweeteners, which are utilized by the food, beverages, paper, textiles, pharmaceuticals, and animal nutrition industries.
Nishat Scale Enhances Growth Prospects
Rafhan Maize’s merger with Nishat Group ensures the inclusion of the maize processor firm into the ranks of one of the largest industrial houses of Pakistan, which employs more than 75,000 people in sectors such as automobile, agriculture, power generation, textiles and garments, banking by way of MCB Bank, insurance, and hotels and hospitality. The scale and diversification of operations at this conglomerate offer opportunities for Rafhan Maize to grow rapidly through different means.
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Transaction Brings about One of the Biggest Changes of Control in Pakistan’s Corn Refining Industry
This is because the transaction marks one of the biggest changes of control in Pakistan’s corn refining industry, the Group added. As far as the Nishat Group-Rafhan Maize transaction is concerned, it has been completed and the Group added that its first priority would be the management changeover and to work with the existing management and staff of Rafhan on its strong foundations.
Dada Partners were also mentioned for being the Group’s financial advisers in the deal which they managed exclusively from inception to its successful completion. Cornelius, Lane and Mufti were the legal advisers while there were also brokers and financial institutions involved in closing the deal.
Strategic Justification of Export Ambition
Apart from being a consolidation move, the acquisition of Rafhan Maize is a reflection of the desire for exports in the future. In particular, Mansha identified that there were opportunities for developing exports to new regions and international markets as a key strategic objective of the merged company — one which was made easier by virtue of Nishat Group’s familiarity with international business dealings.
The combination of the continued 20 percent ownership of Ingredion maintaining a link to its international corn refining expertise and the industrial power brought in by Nishat makes Rafhan Maize enter into a new era with possibly its best ownership ever since its inception in Pakistan.
Nayab Fatima is a media professional specializing in fact-based journalism, research, and analytical reporting on technology, telecom, aviation, and automobiles.
