FLASHNEWS:

PACRA Assigns Initial Ratings to Olympia Chemicals Limited

Lahore, June 21, 2021 (PPI-OT): Olympia Chemicals Limited (the Company) ratings reflect reputable business profile and strong presence in manufacturing of Soda Ash light/dense (Sodium Carbonate) and Refined Sodium Bicarbonate which is used as raw material in different industries like soaps and detergents, textile, paper, glass, baking, beverages and tannery. The competition is duopoly, where product demand is high and the Company enjoys considerable market share with vigorous margins and profitability. Capacity expansions are underway and the Company is near to launch food grade Sodium Bi Carbonate which will provide a competitive advantage.

The group has formidable business history, and rating takes comfort from well managed diversifications. The group’s portfolio contains investments in poultry sector and processed chicken, animal 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” and etc.

Operations are managed by a team of professionals, under supervision of sponsors. The board of the company is family oriented where sponsors are close family members and thus indicating a room for improvement. The Company is benefitting from sound systems of internal controls. Financial profile of the Company is considered strong with healthy coverages, upright working capital management and robust cashflows. Capital structure is low leveraged and borrowings are mainly comprising of long term to support BMR and capacity expansions.

Going forward Company is expecting to increase its export sales to UAE, Qatar, Afghanistan, and Kuwait. The Company follows conservative debt policy, which is likely to continue in future as well also depicted in future financial projections. The ratings are dependent on upheld sustainable profits and market share while retaining sufficient cash flows and coverages. However, adherence to maintain 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