RPL bets on backward integration, resilient supply chain for the road ahead

October 07, 2026 (MLN): Roshan Packages Limited (PSX:RPL) is aiming for sustainable and profitable growth, operational excellence and long-term value creation, with backward integration through its subsidiary Roshan Sun Tao Paper Mills (Private) Limited and a stronger, more diversified supply chain at the center of its plans.

Building on the improved operating performance of FY26, the company said it will keep strengthening its business through disciplined pricing, better capacity utilization, strategic procurement, cost optimization and prudent working capital management, with continued emphasis on customer and product profitability and contribution margins.

According to its annual report 2026, it was highlighted that the paper mills project is expected to improve supply-chain security, reduce dependence on external sources, sharpen cost competitiveness and support greater integration across the packaging value chain.

On supply-chain resilience, the company intends to widen its supplier base, develop alternate sourcing arrangements and evaluate alternate trade routes to limit disruption from geopolitical developments and volatile international supply chains.

Together with disciplined inventory and procurement planning, these steps are aimed at securing raw material supplies and sustaining strong On-Time-In-Full (OTIF) performance for customers.

The company also plans to keep investing in digitalization, automation, renewable energy, operational efficiency and human capital, while pursuing product innovation, deeper market penetration and profitable new business.

Management said it will place particular weight on customer service and on long-term relationships with customers and vendors, backed by consistent service levels, reliable deliveries and closer collaboration across the value chain.

Looking back at the year, the company said the operating environment was mixed.

The packaging industry faced pressure from volatile raw material prices, elevated energy and transport costs and supply-chain disruption, particularly given its reliance on imported and internationally priced inputs.

Tensions in the Middle East added uncertainty to commodity and freight markets, while competitive conditions and customer resistance to quick price changes limited the company's ability to pass on higher input costs in full.

Even so, it said the group delivered improved operating performance through disciplined commercial management, strategic procurement and cost control.

It also proactively explored alternate trade routes and sourcing arrangements, which helped it maintain strong OTIF performance and uninterrupted supplies.

Higher raw material volatility, changes in supplier credit terms and customer collection cycles raised working capital needs, which management addressed through tighter receivable monitoring, disciplined inventory planning and active management of banking and trade finance facilities.

The company pointed to its modernized machinery, wide range of primary and secondary packaging solutions and long-standing ties with blue-chip clients as key strengths.

It also described itself as the pioneer in Pakistan's packaging sector to introduce a dedicated e-commerce portal, Roshpack.com, which serves startups and individual consumers.

Management said the operating environment may remain shaped by raw material and energy costs, exchange rates, interest rates and geopolitical developments, and that it remains committed to disciplined financial management and prudent risk management.

On the financial front, the company's consolidated net profit for the fiscal year ended June 30, 2026 rose 4% to Rs115mn, compared to Rs110.14mn (restated) in the preceding year.

Alongside the results, the board recommended a cash dividend of 10%, or Re1 per share.

Earnings per share (EPS), basic and diluted, edged up to Rs0.81 from Rs0.78 in FY25.

The performance was driven by a 12% rise in net revenue and a sizeable tax reversal, which together offset higher operating expenses, credit loss provisions and elevated finance charges.

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