Euricom, the Italy-headquartered rice supplier, has set up a new venture in Pakistan to bolster its basmati business.

The company has formed Fatima Euricom with local business Fatima Rice Mills. Financial terms were not disclosed.

The Fatima Euricom venture will own the “most modern basmati rice mill in Pakistan”, a statement supplied by Euricom UK MD Paul Lee read.

Just Food approached Lee for further comment ahead of publication.

Around 80% of Europe’s imports of basmati rice come from Pakistan, Euricom said. The company added the venture would benefit from Euricom’s “leadership in rice” to access international markets.

In the statement, Bruno Sempio, Euricom’s chairman, said: “This partnership will help us enhance our control over the basmati supply chain and achieve a higher level of vertical integration, and as a result more effectively secure our raw material supply and implement sustainable and ethical practices. This is becoming increasingly important to both us and our customers.”

The deal, cleared by the Competition Commission of Pakistan, is expected to be finalised by the end of the year.

In a statement, the Commission said the transaction “represents a major advancement in attracting FDI to Pakistan”.

The deal will, the Commission said, “further enhance Pakistan’s rice export capacity”.

It added: “Global agribusiness leaders increasingly recognise the country’s untapped agricultural potential.”

According to the Commission, the venture will have a capacity of 30,000 tons.

Ghulam Sarwar, the owner and CEO of Fatima Rice Mills, said: “We believe this collaboration presents a valuable opportunity not only for Fatima but also for our country, particularly at this time when foreign investment in Pakistan is limited. We are confident that this JV will have a positive impact on small farmers’ businesses and contribute significantly to boosting Pakistan’s exports.”

Last month, Euricom snapped up Polish snacks company Sonko for an undisclosed fee. Euricom acquired the entire share capital of the Wroclaw-based business from functional sports beverage maker Oshee Polska.

When the deal was announced, Sempio said: “This synergistic transaction will help us achieve our target revenues of €1bn ($1.1bn) in the near term.”

Last year, Japanese conglomerate Mitsui Co. bought a stake in Euricom for around Y200bn ($143.3m) for its “partial shareholding” in the company.