Lahore, May 07, 2019 (PPI-OT):Pakistan’s Polyethylene Terephthalate (PET) packaging sector mostly derives its demand from bottled water and carbonated beverage industry, while, pharmaceutical and edible oil sectors have become an upcoming demand driver. To cater to this demand, introduction of different PET bottles sizes have become important drivers for the sector’s growth. Strong consumer demand for beverages and other products that use PET packaging remains pivotal to the overall packaging industry’s growth.
The industry primarily operates in two segments: PET Preforms and PET Bottles. PET Preform segment is experiencing volumetric growth. Whereas, PET Bottle segment enjoys better margins. The beverage companies in the last few years have installed bottle manufacturing units themselves limiting the growth in bottles segment for the vendors and at the same time creating a strong demand for Preforms from the vendor industry.
The ratings reflect the Company’s established position in PET Preform and PET Bottle segments. EcoPack has experienced a rising top-line owing to significant demand growth in PET Preform segment and its increased share in revenues. However, seasonality has subdued the growth of Blowing/Bottles business. This has led to an overall decline in margins percentage, as PET Preforms is relatively a lower margin and high volume segment. The Company’s overall leveraging remain significant with stable coverages. Sound working capital management lend support to financial profile.
The ratings are dependent on the management’s ability to strengthen the relative positioning of the Company in the industry. Improvement in business margins and, in turn, profitability remains imperative. Any deterioration in the Company’s coverages would have negative impact on the ratings.
For more information, contact:
The Pakistan Credit Rating Agency Limited (PACRA)
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Lahore – Pakistan
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Category: General Business News