Engro purchases US-based firm’s food business

Company diversifies into meat-based products.

KARACHI:

Engro Corporation is all set to enter the Halal food business in North America as the company has finalised and signed an agreement with US-based Al Safa Halal to purchase its food business, Engro announced on Monday.

Engro Foods Limited, a subsidiary of Engro Corporation, said the move had come as part of its goal to become the largest Pakistan-based company operating internationally. The head office of the new set-up will be established in Toronto, money for which “has already been transferred for payments”.

Speaking to The Express Tribune, Engro Foods Limited CEO Sarfaraz A Rehman informed that the Economic Coordination Committee and the State Bank of Pakistan had given approval for a deal within $15 million (Rs1.28 billion) and the final transaction was close to this figure. He did not give the exact amount.

Rehman said that Engro had analysed the Halal food industry well before making the decision to jump into the market, adding that this industry had been growing rapidly and there was high potential for it to be the engine of growth for any economy.

“There is a niche in the Halal food market for big multinationals,” he said, adding Engro expected rapid growth in sales over the next three to four years, once its products were introduced in the North American market.

He further informed that though undecided as yet, Engro expected the product range to grow from what Al Safa Halal was already producing.

Al Safa Halal is a relatively small food company based in New York. However, its products are distributed throughout North America, primarily in supermarkets catering to the seven million-strong North American Muslim community.

The company’s products primarily involve meat-based frozen foods, such as chicken, turkey, beef and pizza, though it also has a vegetarian fare such as falafel products.

Meat is a new line of products for Engro Foods as the company’s Pakistani operations are primarily focused on dairy products such as milk and ice-cream.

“The company’s vision is to take Pakistan onto an international platform where it will fulfill our core belief - ‘Elevating Consumer Delight Worldwide’ - and this is the first step up the ladder to achieve the goal,” said Engro Foods Limited (GBU) Vice President-Marketing Ali Akbar.

Published in The Express Tribune, May 10^th, 2011.