PACRA maintains the entity rating of Pakistan Aluminium Beverage Cans Limited

Pakistan Aluminium Beverage Cans Limited ("PABC" or the "Company") is the sole producer of aluminium-based beverage cans in Pakistan. The demand for aluminium cans is directly linked to consumption of beverage drinks which is always in increasing trend. The business model of PABC is that of B2B and directly supplies aluminium cans to beverage producers. The high entry barrier and time for installation of the production plant and technical expertise have provided strength to the Company to establish its brand name and capture the entire market share of Pakistan along with the major share of clients in Afghanistan and other countries. The company has established a sound customer base with a strong financial profile thus minimizing the credit risk to a low level. The CEO - Mr. Azam Sakrani has an extensive knowledge of the industry with an overall 30 years of experience and the chairman - Mr. Simon Michael Gwyn Jennings has an overall 40 years of experience in the global can industry. The governance structure is considered strong due to the presence of Board committees and having a sufficient number of board meetings. Furthermore, external auditors are category-A with satisfactory QCR rating. The Company has recently increased its rated production capacity from 700mln cans to 950mln cans p.a. PABC has financed and installed an on-grid solar system as well as fulfilling major energy needs of the Company. Going forward, the Company is in the process of finalizing enhancement of rated capacity to 1,200mln cans p.a. and improve market share for aluminium beverage cans in Pakistan and abroad by adding leading brands to its clientele. The financial risk profile of the Company is considered strong, with sufficient cashflows and a well-managed working capital cycle. During 6MCY23, the Company generated a top line of ~PKR 11,120mln (6MCY22: ~PKR 6,510mln, CY22: ~PKR 14,153mln), showing an increase of ~ 57% in revenue. As a result, during 6MCY23 the Company generated a bottom line of ~PKR 2,714mln (6MCY22: ~PKR 1,577mln, CY22: ~PKR 2,703mln). The Company has availed both short-term financial institutions to finance the import of aluminium-based raw materials and long- term facilities to enhance available capacity. The leveraging of the Company stood at ~33.7% as of Jun'23 (~47.9% as of Jun’22). Being associated with the well-established and stable Liberty Group and Soorty Enterprises bodes well for the rating.
The ratings are dependent on the Company’s ability to sustain its market position and management’s ability to run the operations of the Company optimally. With the upcoming growth in firm’s business & volumes; prudent financial discipline and implementation of a stringent control environment shall remain imperative.

About the Entity
PABC, established in 2014 as a joint venture of Ashmore Mauritius PABC Limited and Liberty Group, started its commercial production in 2017 and eventually became a Public Listed Company in 2021 with divestment of Ashmore's shares. Currently directors and substantial shareholders own 75.62% shares, of which Hamida Salim Mukaty, Zain Ashraf Mukaty, and Soorty Enterprises (Pvt) Ltd holding a stake of 34.61%, 20.99% and 20% respectively. An ablemanagement team assists him. PABC has inhouse technical expertise as well as contracts with international technical experts. The Company enjoys 10-year tax holiday from the start of its commercial production, under Special Economic Zones Act, 2012.