Karachi: VIS Credit Rating Company Limited has reaffirmed the entity ratings of Gamalux Oleochemicals Limited at ‘A-/A-2’ with a stable outlook. The ratings reflect the company’s good credit quality and sound liquidity factors, indicating a strong likelihood of timely repayment of obligations. This reaffirmation comes after the previous ratings were announced in July 2023.

According to VIS Credit Rating Company Limited, Gamalux Oleochemicals, established in 2000 and transitioned to a public limited company in 2021, operates in the oleochemical industry, producing and distributing products for both business-to-business and business-to-consumer markets, including exports to the UAE and Uzbekistan. The ratings consider the chemical sector’s medium cyclicality and low competition, with demand driven by various industries and sensitivity to exchange rate fluctuations due to significant raw material imports.

The financial assessment by VIS highlights Gamalux’s profitability, supported by its integrated operations and value-added products, along with improvements in capitalization from profit retention and capital injections. However, the company faces challenges from volatility in raw material costs and exchange rates, which are critical factors for future rating reviews.