PACRA Upgrades Entity Ratings of Ghani Chemical Industries Limited - Press Release issued by The Pakistan Credit Rating Agency Limited.

Lahore -- June 15, 2021 (PPI-OT)

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

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The ratings recognize Ghani Chemical Industries Limited's (GCIL) leading and prominent position in the industrial and medical gases sector in terms of production capacity. The industry largely possesses an oligopolistic structure, benefiting the players. Demand of medical gases in health sector has significantly escalated during third wave of Covid-19 and is expected to sustain in short to medium term. On the other side manufacturing and construction industry has comprehended recovery which led to improved demand for industrial gases.

The company was able to capitalize growth from (a) Underutilized free capacity, which was available as a result of 3rd 110TPD plant expansion (b) price rationalization of medical and industrial gases also witnessed from financial performance of the company recorded in 9MFY21. Company's margins, coverages and working capital cycle showed improvement at all levels.

Cash flows of the Company also posted a healthy growth. All three plants are operational with higher capacity utilization. Capacity expansions are underway and currently the Company is setting up its fourth 105TPD dedicated plant which will cater the need of a renowned big industrial customer through a long term sale contract and would play a vital role towards top-line and bottom-line growth. GCIL also intends to setup the largest 275TPD plant in KPK in future as well.

Going forward the Company is...