AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Lahore, June 22, 2023 (PPI-OT): Olympia Chemicals Limited (the Company) ratings reflect a robust business profile represented by its prominent position in manufacturing of Soda Ash light/dense (Sodium Carbonate) and Refined Sodium Bicarbonate. These products serve as crucial raw materials for various industries, including soaps and detergents, textiles, paper, glass, solar panels, baking, beverages, and tannery. Currently, the local market is characterized by a duopoly, with Lucky Core Industries (formerly ICI Pakistan) possessing a dominant ~60% market share. Olympia Chemicals, on the other hand, enjoys ~30% market share, while the remaining 10% is supplied through imports.
Recently a prominent, local business group has also expressed its intention to set up a new soda ash manufacturing plant. The company’s expansion of a new soda ash unit is underway and near to completion stage. This will increase the soda ash manufacturing capacity from 750TPD to 1000TPD. The Company’s new 100TPD food-grade Sodium Bi Carbonate unit has also come online which is providing a competitive advantage. Despite macroeconomic turbulence and related operational challenges, the topline of the company registered a positive growth of ~46% during 1HFY23, and margins also showed improvement at all levels.
The group has formidable business history, and its rating takes comfort from well-managed diversifications. The group’s portfolio contains investments in poultry sector and processed chicken, poultry feeds, chemical manufacturing, edible oils extraction, agriculture crops, fruit orchards, carpets weaving, and textile products. Some of the renowned brands are “O! Food”, “BreeO Laundry Detergent” “Number 1 Detergent Powder”, “Areej Banaspati and Cooking Oil”, “Olympia Carpets” etc. Operations are managed by a team of professionals, under the supervision of sponsors. The board of the company is family-oriented where sponsors are close family members and thus indicating room for improvement.
The Company is benefitting from sound systems of internal controls. The financial profile of the Company is considered strong with healthy coverages, efficient working capital management, and sizeable cashflows. Capital structure is leveraged, and borrowings are mainly comprised of concessionary long-term loans (TERF) for capacity expansions. Going forward the company is expecting to increase its export sales to UAE, Qatar, KSA, South Africa, Afghanistan, Bangladesh, and Kuwait.
The ratings are dependent on upheld sustainable profits and market share while retaining sufficient cash flows and coverages. However, adherence to maintaining its debt metrics at an adequate level is a prerequisite.
For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com
The post PACRA Maintains Entity Ratings of Olympia Chemicals Limited appeared first on Pakistan Business News.