NIMIR Industrial Chemicals Ltd earns credit rating of A/A1 due to its persistent profitability: PACRA

January 23, 2019 (MLN): Pakistan Credit Rating Agency has maintained the entity rating of NIMIR Industrial Chemicals Limited at ‘A’ for long-term and ‘A1’ for short-term, with a stable outlook forecast.

The ratings of Nimir Industrial Chemicals Limited demonstrate its strong position in domestic manufacturing of oleo chemicals and chlor alkali products, solid customer base of multinational FMCGs, strong margins, generation of persistent profitability, and former association with American’s owned Knightsbridge Group.

Established as a listed entity, a well-devised governance framework is in place. The company has established a distinguished position in its operating segment through provision of high quality products to large-scale multi-national companies.

Additionally, growing demand for consumer products and company’s abilities to expand its capacities to cope with the demand bodes well for business prospects of the company. Advanced production facilities alongside experienced management team transpire into operational efficiencies.

Capitalizing on a topline-driven approach, the company has been expanding its business volumes since take over by the current shareholders. The recent advancement and upgradation of the plant has been completed in FY18. Well-devised pricing strategy indexed with dollar rates hedges against exchange risk, since the company imports various palm oil products as its major raw materials. Sustenance of healthy margins with adequate leveraging and strong coverages are important for ratings, going forward.

The ratings are dependent on sustaining strong margins and profitability in line with business expansion; prudent management of liquidity profile and maintenance of strong coverages amidst expansion are important for the ratings.

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