Karachi: Olympia Chemicals Limited has maintained its robust credit ratings, reflecting its solid footing in the soda ash and sodium bicarbonate manufacturing industry. The Pakistan Credit Rating Agency Limited (PACRA) attributed these ratings to the company's consistent performance and strategic business approach.
Olympia Chemicals operates with a daily production capacity of 1,000 tons, with 160 tons allocated specifically for food-grade sodium bicarbonate. The company holds a significant position in the local soda ash market, which is dominated by a duopoly. Lucky Core Industries leads with a 60% market share, while Olympia Chemicals follows with about 30%.
The market landscape is poised for change as Sapphire Chemicals has been granted approval to establish a new facility, targeting export markets. This plant is expected to be operational within three years.
Local demand for soda ash is closely linked to industries such as glass manufacturing, detergents, specialty chemicals, and water treatment. Despite a slowdown in the construction sector during FY24 affecting the glass industry, recent economic stabilization has led to increased construction activity. Consequently, Olympia Chemicals reported an 11% rise in soda ash sales volumes in the first half of FY25.
The company is also expanding its product portfolio, venturing into detergents, which has seen significant growth. This diversification is part of a broader group strategy encompassing various sectors, including poultry, chemical manufacturing, and textiles.
Financially, Olympia Chemicals demonstrated an 8.3% growth in revenue during the first half of FY25, driven by increased sales volumes and price adjustments, although margins saw slight dilution. The company's financial position remains strong, with low leverage and reliance on concessionary long-term loans.
The ratings depend on Olympia Chemicals' ability to maintain profitability and market share while ensuring adequate cash flows and debt management. The company's governance structure, predominantly family-based, suggests areas for potential enhancement.