Lahore: VIS Credit Rating Company Limited has announced the assignment of initial credit ratings to Sunridge Foods (Private) Limited, categorizing the medium to long-term rating as ‘BBB+’ and the short-term rating as ‘A-3’. These ratings indicate an adequate credit quality with reasonable and sufficient protection factors and a fair likelihood of timely repayment for short-term obligations.

According to VIS Credit Rating Company Limited, Sunridge Foods, a wholly-owned subsidiary of Unity Foods Limited, specializes in processing wheat, flour, and rice, with flour being its main product. The company also produces sugar, salt, lentils, and pulses predominantly for the local market. Operating under the ‘Sunridge’ brand, the company sells directly to retailers, restaurants, hotels, and distributors across Pakistan and manages processing facilities in Sindh and Punjab, along with storage facilities in multiple provinces.

The report highlights strong market demand for wheat and flour in Pakistan, a sector characterized by stiff competition, especially in the middle to high-end markets. Despite challenges such as dependency on imports due to insufficient local production and vulnerability to international market shifts, the company has managed to pass on price changes to customers, albeit with a time lag.

Sunridge Foods is actively increasing its investments in subsidiaries and enhancing its infrastructure, including expanding storage and processing capacities. The company plans significant capital expenditures, primarily funded through internal sources and short-term borrowings. Although the company faces fluctuations in coverages and liquidity, it has shown improvement in gearing and leverage through equity injections and strategic financial management.

The stable outlook on the ratings reflects expectations of continued financial stability, provided that Sunridge Foods meets its projected financial targets and effectively manages liquidity for timely debt servicing.