Brahim's Targets US$500M Hajj Deal

Brahim’s Holdings Bhd, which aims to be a global player, is targeting a US$500 million project in Saudi Arabia to supply halal meals to Asian pilgrims performing hajj (annual pilgrimage) in Mecca. The project is an initiative of the Establishment for Southeast Asian Pilgrims (Muassasah) and comes under its food production and distribution programme for hajj pilgrims.

Brahim’s is preparing to submit its proposal to Muassasah this month, its director Datuk Howard Choo said. Choo said Muassasah is expected to award the job, after evaluating all the proposals, next month.

“This is a 20-year contract. We are expected to supply 11.1 million meals a year to the Asian pilgrims and support personnel during the hajj,” Choo told Business Times in a recent interview.

Every year, some 180,000 Muslims from Pakistan, 170,000 from India and 27,500 from Southeast Asia throng Mecca to perform the hajj. They require three meals a day for five consecutive days.

Choo said Brahim’s has incorporated a subsidiary called Brahim's Labuan Ltd to undertake the project and develop a food factory there for about US$40 million to US$50 million. (RM122 million to RM152 million).

He said the Saudi government will allocate two-hectares of land to build the factory. Brahim’s will finance the cost to build the factory, which will be equipped with the latest technology in retort sterilised meals.

“The sterilised meals would have a shelf life of two years. We use Japanese technology and Brahim's was the first company in Malaysia to introduce it here many years ago,” Choo said.

He said with the job in hand, Brahim's earnings will increase from this year. “We expect annual turnover from the project to be in the region of US$25 million to US$30 million. Just like all other food businesses, profit margins would be around 15 to 16 per cent a year,” Choo said.

“Besides this project, we are eyeing several other jobs in other parts of the world. We are not highly concerned of the global economic uncertainties as the food business is recession-proof,” he added.

For the three quarters of its financial year just ended December 31 2012, Brahim's registered a pre-tax profit of RM13.4 million on the back of RM142.2 million revenue.

- Btimes