PACRA Assigns Initial Entity Ratings to Nimir Chemicals Pakistan Limited - Press Release issued by The Pakistan Credit Rating Agency Limited.

Lahore -- September 21, 2022 (PPI-OT)

Following is the text of press release issued by The Pakistan Credit Rating Agency Limited (PACRA)


Nimir Chemicals Pakistan Limited ('NCPL' or 'the Company') is primarily engaged in the manufacturing and marketing of Phthalic Anhydride (PA), Di-Octyle Phthalate (DOP), followed by Alkyd Resins (AR), and other trading products to feed the demand of downstream sectors.

The ratings reflect NCPL's long-established history and leading position in the domestic petrochemical products industry. NCPL is the major PA producer in Pakistan retaining strong market share of ~80%. It captures around ~40% share in DOP segment, ~21% in AR and ~14% in MA. Pakistan's reliance on imported intermediate chemicals is reducing with time as local companies are injecting more investments to increase their production capacities.

The sector is considered as a backbone in the development of forward linked industries (including leather, paint, textile, footwear, sports goods, plastic and PVC). As Pakistan is a net importer of oil, gas, coal and allied products; the sector faces considerable production cost pressures amidst high international energy prices and currency devaluation.

Specifically, the fluctuating prices of crude oil in the international markets can challenge industry's growth, partially set-off by the producers' ability to pass on price hike. Besides, expected growth in the construction and coating/paint industry and demand for PVC products will have positive sales impact on Plasticizers (DOP), PA, and AR in long-run. National Tariff Commission of Pakistan has imposed definitive anti-dumping duties on imports of PA to support the local market players.

The Company's revenue streams are driven by PA sales channelled to its associated concern together with sales of DOP, AR, and MA to diverse customer...

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