Rating Release
Agusto & Co. affirms the “A” rating assigned to Zeenab Foods Limited, with a stable outlook
The rating expires on 30 June 2026.
Agusto & Co. hereby affirms the “A” rating assigned to Zeenab Foods Limited (“Zeenab Foods”, “ZFL” or “the Company”), reflecting the relative stability in its profitability supported in part by the strong agro-commodity demand during the year. The rating also highlights ZFL’s low leverage position as well as its growing product portfolio and diversified earnings streams that continue to strengthen its resilience to economic headwinds. The rating incorporates the potential for revenue growth, as the second production line of the rice mill, which will add 120 metric tonnes per day to existing capacity, is scheduled for completion in September 2025. The rating is, however, tempered by ZFL’s reliance on short-term borrowings amid a persistent working capital shortfall and its exposure to price and currency volatility. These vulnerabilities are being mitigated through a cost-based pricing strategy and close stakeholder engagement, including the timely closure of export transactions. In July 2024, the government temporarily lifted the ban on rice importation to stem food inflation, leading to margin pressure for local rice millers. Zeenab Foods plans to mitigate the policy impact by leveraging its operating scale and strategic partnership with rice farmers, alongside active engagement with the government for a policy rethink.
Established in 2011, Zeenab Foods Limited is an agro-commodity processor and trader. The Company engages in the milling of paddy rice with an existing installed milling capacity of 120 metric tonnes (MT) per day. With its second rice mill line due for completion by September 2025, ZFL’s capacity is set to double to 240 MT. In addition to rice milling, ZFL also processes other agro commodities such as beans, millet, cassia tora, cocoa and shea nut for sales in the local and international markets. The Company owns two factories located in the Federal Capital Territory (Abuja) and Kano State. Zeenab Foods also supplies grains and other agro-commodities to international donor agencies like the United Nation’s World Food Programme (UN WFP), which the agency uses to support various humanitarian interventions. In 2022, ZFL was appointed the operator of the Nigerian Export House in China and commissioned a liaison office in Lagos on 17 April 2024 to drive export volumes in line with the government’s plan to promote the growth of the non-oil sectors of the Nigerian economy.