Fecto Cement’s green field expansion project to cater the demand of adjoining markets: PACRA

December 18, 2018 (MLN): Pakistan Credit Rating Agency (PACRA) has maintained entity ratings of Fecto Cement Limited at ‘A-’ for long-term and ‘A2’ for short-term, with a stable outlook forecast.

According to the press release issued by the agency, the assigned ratings reflect Fecto Cement’s adequate business profile supported by healthy sector dynamics over last few years. The company is operating with a single manufacturing unit in the North region.

The company has announced green-field expansion, which is more than double its existing capacity, will be located in Malakand District. This will allow company to cater the demand of adjoining markets in a cost-efficient manner.

The management is eying an international investment group to be partner in the project (green-field expansion). The project is deemed to be operational by FY21. Fecto Cement is also diversifying into other sectors – formalities yet to be finalized, the report further revealed.

The ratings are dependent on upholding of company’s business volumes and margins. The acquisition of planned debt in phased manner is vital for financial risk matrix. The company’s improved business performance in current stretched economic scenario – challenges on demand front – remains vital for ratings.

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