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Lahore: The Pakistan Credit Rating Agency Limited (PACRA) has maintained the entity rating for Starch Pack (Pvt.) Limited, highlighting the company’s strong ties with the Packages Group despite ongoing operational challenges. Starch Pack, a key player in the corn-based starches and derivatives market, benefits from its strategic link with Packages Group, which has a robust presence in both the packaging and financial sectors through Packages Limited and IGI Holdings.
Starch Pack was established to enhance backward integration for Bulleh Shah Packaging (Pvt.) Limited, a significant supplier of paper, board, and corrugated boxes in Pakistan. This initiative aims to leverage Group synergies within the packaging value chain. The company is poised to capitalize on Pakistan’s corn sector, known for its potential in value-added segments both locally and internationally. The native and modified starch products are crucial for the textile, paper, and packaging industries.
While Starch Pack’s revenue has shown growth, the company continues to face challenges due to inflated costs, resulting in losses. The company is focusing on a cautious strategy to exploit its strategic location and achieve economies of scale. The international presence of the Group provides a global footprint for Starch Pack’s offerings.
On the financial front, Starch Pack is supported by continuous financial backing from the Packages Group, including significant equity injections planned through 2026 to offset ongoing losses. The company’s lean structure, backed by an experienced management team and a strong control environment, is seen as a positive factor.
PACRA notes that the company’s ratings depend on the continuation of Group synergies and the successful execution of both local and international initiatives. Enhancing market reach and managing working capital efficiency are crucial for maintaining business margins and the assigned rating.