Sabirs’ Vegetable Oils (Pvt.) Ltd. (Sabirs' Oil’ or ‘the Company’) was incorporated in Oct-17 as a Private Limited Company under Company Act, 2017.

Dr. F. M. Sabir setup Sabir Group in 2005 after getting separated from Hi-Tech Group. He received Shahzor Feeds (Pvt.) Ltd, with a production capacity of 324,000MT/annum, as his share on separation. Sabir Poultry (Pvt.) Ltd was incorporated as an integrated supply chain company. The Group set up two AoP concerns, Sabirs’ Feeds and Multan Feeds, currently with a production capacity of 288,000MT/annum and 400,000MT/annum, respectively. In 2015, the Group entered in the processed and packaged food market by the brand name of Sabroso. The Group's latest venture, Sabirs’ vegetable Oil with a crushing capacity of 700 MT/day was set up in 2017, as a backward integration plan.

Sabirs’ Oil is primarily engaged in seed filtering, crushing, oil extraction and refining by mechanical and chemical processes from soybean seed. During FY25, the Company utilization levels posted a dip and stood at 39% (FY24: 42%) at stood at 98,656 M.T/annum. During the year the Company's installed capacity ramined constant at 255,936 M.T.

Major ownership resides with Dr. F.M Sabir (22.7%). Mr. F.M Sabir have five sons which collectively hold ~70.65% of the Shareholding. The remaining stake resides with two associated companies Sabirs’ Poultry (Pvt.) Ltd. (3.76%) and Shahzor Feeds (Pvt.) Ltd. (2.89%).

The Company is completely owned by the sponsoring family. Sabirs’ Oils succession plan is not formally documented; however, the succession is planned to be effectively transmitted among his sons.

Dr. Sabir has been associated with the poultry supply chain for more than 40 years. He is a DVM and is experienced in the relating fields including feed production, poultry production, breeding, hatching, broiler production and processing plants.

Sabirs’ Group of Companies comprises entities operating across the whole poultry supply chain. The Group’s poultry farms and feed mill remains its main revenue generating ventures. The Group has third largest capacity for DOC standing at ~1,000,000 chicks per day and contributing towards Group financial strength.

Sabirs’ Oil's BoD comprises six Executive Directors, from the sponsoring family. Lack of independent oversight and diversity indicates a room for improvement in the governance structure.

The BoD is a key source of oversight and guidance for the management of all Group Companies. The Board’s Chairman, Mr. Faqir Mohammad Sabir is associated with the Sabirs’ Group since inception. He has an experience of more than 40 years in poultry and allied chain. Mr. Mohammad Zeeshan Sabir, the eldest son of Mr. Faqir, Executive Director, is associated with the Company’s Board since 2017 and has an overall experience of more than 20 years. Mr. Imran Sabir, Executive Director, is associated with the Company’s Board and has an overall experience of 20 years as well. The Board members are well equipped with the relevant business knowledge.

Board’s effectiveness indicates room for improvement as it lacks committees and formal structure.

The external auditors of the Company, BDO Ebrahim and Co. Chartered Accountants, have expressed an unqualified opinion on the financial statements for the year ended Jun-25. The firm is placed in 'category A of SBP' panel of auditors.

The organizational structure has been centralized with less efficient delegation of responsibilities. The Company operates through five functions: Production, Sales, Accounts, Audit and HR. All functional managers’ report to the respective Departmental Heads who then reports to the CEO. The CEO then makes all the pertinent decisions.

Dr. Sabir, Group CEO, is a DVM with an exposure in veterinary medicine, breeding, feed production and broiler production. He is assisted by a team of professionals. Mr. Ijaz Haider, Chief Financie Officer, has been associated with the Group for a decade.

Management’s effectiveness and efficiency is ensured through timely information provided at the Group level. However, there are no committees and management minutes are not prepared indicating a room for improvement.

The Company utilizes a sophisticated Oracle-based Enterprise Resource Planning (ERP) system, which serves as the backbone of its Management Information System (MIS), ensuring real-time data integration across all core functional areas. This platform facilitates the seamless consolidation of critical operational metrics—including production yields, sales performance, and comprehensive customer databases—into automated daily reports. The integration of automated aging schedules and receivables tracking within a centralized system enhances transparency, enables proactive liquidity management, and reflects a high standard of reporting integrity.

The Company has established an internal audit function at both the entity and group levels, incorporating an effective resource-sharing mechanism to enhance operational efficiency and oversight across all tiers of the organization.

Edible oil remains one of Pakistan’s largest imported commodities, with the industry marked by substantial import dependence, concentrated consumption patterns, and strong sensitivity to global price trends. Nearly 90% of the country’s edible oil is met through imports—primarily palm oil—while local production accounts for only about10%. This heavy reliance has positioned Pakistan among the world’s top three palm oil importers. Indonesia and Malaysia remain the dominant suppliers, underpinning the country’s annual demand of roughly 5 million tonnes of ghee and cooking oil, including 3.5 million tonnes of imported palm oil. During the 5MFY24, Pakistan imported 1.319 million tonnes of palm oil valued at USD 1.26 billion, compared to 1.248 million tonnes worth USD 1.17 billion in the same period last year. The sector continues to face cost pressures, with import prices rising to around USD 1,100 per tonne in December 2024 from below USD 900 earlier in the year. Over 9MFY25, industry dynamics were shaped by global trends, as international palm and soybean oil prices averaged USD 1,007/MT and USD 1,097/MT, respectively, prompting corresponding movements in domestic prices. While prices remained elevated in early 2025, they eased in the second quarter amid declining inflation and a more stable exchange rate. Consumption recovered modestly, supported by population growth and gradual improvement in purchasing power. Sector revenues posted a slight YoY increase of around 1%, while gross profitability improved due to better input cost management. However, net margins stayed thin, underscoring the industry’s persistent exposure to external shocks. Looking ahead, the sector is expected to maintain stable performance, supported by a stronger PKR and improving macroeconomic fundamentals. Nonetheless, long-term resilience will depend on accelerating domestic oilseed cultivation to reduce reliance on global commodity cycles and enhance supply security.

Sabirs' Oil holds a notable position in the market in terms of revenue. The Company is well-positioned for growth as it partially caters to the soybean meal demand of its associates, benefiting from an upward trajectory.

Sabir's Vegetable Oil (Pvt.) Ltd reported a marginal 1.6% increase in gross revenue for FY25, achieving PKR 23,316 million compared to PKR 22,947 million in the previous fiscal year. However, this modest gross growth was offset by a contraction in the actual business volume, as the topline, net of sales tax, declined from PKR 20,405 million to PKR 19,827 million. The revenue composition remains highly concentrated, with the Soybean/Canola Meal segment dominating the portfolio, contributing 61% to the topline and registering an impressive 29% growth to PKR 14,199 million. The Soybean/Canola Oil segment also demonstrated exceptional performance, achieving 68% year-on-year growth and contributing 37% to total revenue, highlighting its emerging critical role in strategic diversification. In stark contrast, minor segments struggled, with the 'Others' category shrinking significantly to PKR 276 million from PKR 533 million in FY24, and Rapeseed Meal accounting for a negligible 1% share. This heavy reliance on a concentrated two-product mix introduces significant revenue volatility risk, making the company highly susceptible to potential demand fluctuations and price instability within its core commodity markets, underscoring the necessity for sustained and successful diversification strategies.

The Company's operational structure exposes it to significant foreign currency risk, as its core raw material, soybean seeds, is imported from key markets in Africa and the United States, linking its input costs directly to global demand-supply mechanisms and exchange rate volatility. This inherent risk materialized in a contraction of core profitability margins during FY25, with the gross profit margin narrowing to 7.6% (from 8.4% in FY24) and the operating profit margin decreasing to 7.3% (from 8.3% in FY24). While raw material prices moderated in the latter half of the year, aided by easing inflation and a steadier exchange rate, the primary cause for the margin erosion was the 2.8% decline in net revenue, which outpaced the 2% reduction achieved in the cost of goods sold. Nevertheless, the Company effectively compensated for this operational pressure, achieving a noteworthy increase in its net profit margin to 4.5% (up from 3.3% in FY24). This bottom-line improvement was largely driven by efficient financial management, specifically the decline in finance costs to PKR 17 million, likely due to favorable interest rate conditions or successful debt restructuring.

The Sabirs’ Oil plans to fulfill the in-house demand of poultry feed. The demand still exceeds the current capacity of the Company. The Company operates as part of the supply chain integration strategy so the risk of customer base is mitigated to a great extent.

Sabir's Vegetable Oil's operational efficiency transitioned in FY25, marked by a significant increase in gross working capital days to 70 days from 48 days in the preceding year. This was primarily driven by a sharp rise in inventory holding periods from 43 to 61 days—with raw material days extending to 41 and finished goods to 19—though this inventory buildup did not pose a negative impact, as it likely served as a strategic buffer to ensure supply continuity. Concurrently, the cash conversion cycle was affected by Trade Receivable days climbing from 5 to 9 days, while Trade Payable days remained stable at 15 days. Consequently, Net Working Capital days extended to 55 days from 34 days in FY24; however, because the inventory accumulation was managed without operational distress, the resulting pressure on liquidity represents a calculated trade-off to support the company's broader scale of operations.

Sabir's Vegetable Oil (Pvt.) Limited demonstrated a significant enhancement in its financial risk management during FY25, as evidenced by marked improvements across key debt coverage metrics. The most critical factor driving this positive shift was the substantial decline in finance costs, which plummeted to PKR 17 million from a high of PKR 784 million in FY24. Notably, the company is minimally reliant on short-term borrowings, transitioning toward a self-sustaining financial model. Consequently, both the EBITDA over finance cost ratio and the Free Cash Flow from Operations (FCFO) over finance cost ratio portrayed a significant improvement. These enhanced coverage metrics confirm a substantially reduced financial leverage risk and underscore a healthier fiscal structure, increasing stakeholder confidence in the Company's capacity to manage its debt burden moving forward.

The Company currently maintains a low-leveraged capital structure, primarily relying on short-term borrowings, which constitute 100% of its total debt portfolio. This preference for short-term financing minimizes long-term fixed obligations but necessitates effective liquidity management to ensure timely refinancing and repayment. Key parameter of the Company's borrowing costs include: approximately 30% of the total borrowing is subject to interest or markup. This structure indicates that the cost of short-term funds is directly tied to the benchmark interbank rate plus a defined risk premium. While the absence of long-term debt reduces amortization pressure, the 100% reliance on short-term instruments exposes the Company to heightened rollover risk and immediate susceptibility to adverse fluctuations in market interest rates.