Salman Paper Products (Pvt.) Limited

RATING REPORT | Apr-26

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Rating History
Dissemination Date Long-Term Rating Short-Term Rating Outlook Action Rating Watch
22-Apr-26 BBB A2 Stable Maintain -
22-Apr-25 BBB A2 Stable Maintain -
23-Apr-24 BBB A2 Stable Maintain -
03-May-23 BBB A2 Stable Maintain -
14-Sep-22 BBB A2 Stable Initial -
About the Entity

The Company was established in 2005 as Jilani Enterprises. In 2012, Jilani Enterprises was renamed to Salman Paper Products Private Limited and got registered with SECP in 2019 with a share capital of PKR 20mln. The Company is owned by the CEO/owner, Mr. Muhammad Aslam Jilani, having 99% shareholding. Although Salman Paper Products deals in four main products, it has wide spread customer and supplier base. The Company imports finished goods as raw material and sells to customers after cutting and printing, selling to the northern, central, and southern regions of Pakistan. Four products, namely: Art card, Packaging board, Stickers, and Printer paper, are sold to customers, divided into direct sales and dealerships, who resell to other customers. A significant portion of Salman Paper Products’ customers are located in the southern region.

Rating Rationale

The rating of Salman Paper Products (Pvt.) Limited (“SPPL” or the “Company”) reflects the Company’s established standing in the import and distribution of paper and paperboard products in Pakistan. The business operates on a high-volume, efficient trading model, enabling the Company to maintain a notable position among key importers, particularly in the southern region of the country. The Company is led by its sponsor and Chief Executive Officer, Mr. Aslam Jilani, who possesses more than three decades of experience in the paper industry and remains closely involved in the strategic and operational management of the business. SPPL primarily focuses on the import and supply of paper and board products to a wide network of customers operating in the packaging and paper-converting segments. Demand for these products is largely linked to downstream industrial consumption, which provides the Company with a relatively stable customer base. Through established procurement channels and an efficient distribution framework, the Company is able to manage its trading operations effectively while maintaining a steady presence in the market.
The Board primarily comprises family members and lacks a formalized board structure. Aslam Gilani provides strategic direction to the business and oversees its effective management. The management team possesses significant industry knowledge and operational capability; there remains scope to further strengthen the governance framework through the introduction of additional oversight mechanisms and formalized internal control processes. Financially, the Company demonstrated sound performance during FY25, supported by stable trading volumes and effective cost management. SPPL continues to operate with a moderately leveraged capital structure, primarily utilizing short-term borrowings to finance its working capital requirements, which is consistent with the nature of its trading activities.

Key Rating Drivers

The ratings are dependent upon the management’s ability to improve margins while sustaining its market share. Prudent management of the working capital and maintaining sufficient cash flows and coverages are essential for the ratings. Any significant change in margins and coverages will impact the ratings.

REPORT CONTENTS
  1. Rating Analysis
  2. Financial Summary
  3. Rating Scale
  4. Regulatory Disclosure

Salman Paper Products (Pvt.) Limited


Rating Analysis

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Profile
Legal Structure

Salman Paper Products (Pvt.) Limited (or "the Company") was incorporated as a Private Limited Company under the Companies Ordinance, 1984 in October 2011.


Background

In 2005, Salman Paper Products was established as Jilani Enterprises and in 2011 Jilani Enterprises was renamed to Salman Paper Products Private Limited. The Company is primarily engaged in the import, cutting and sizing, printing and trade of paper in the local market.


Operations

Salman Paper Products (Pvt.) Limited deals in four products; namely: Art cards, Packaging board, Stickers, and Printer paper. The Company imports the paper from China, Malaysia, and Indonesia and sells to northern, central, and southern regions of Pakistan. Customers of the Company are divided into direct customers and dealers (who resell to other customers). Among the dealers 4 are located in the central region, 2 are located in the northern, and 2 dealers are in the southern region of Pakistan


Ownership
Ownership Structure

The Company is privately owned by two shareholders - Majorly by Mr. Muhammad Aslam Jilani: 99% shares and remaining 1% shares by Mr. Muhammad Faisal.


Stability

The Company benefits from a consistent ownership profile, with sponsors bringing extensive industry experience in the packaging sector and maintaining strong personal involvement in the business. Additionally, its association with a broader group where informal collaboration and support among affiliated entities is evident further strengthens the overall assessment.


Business Acumen

Mr. Aslam Jillani possesses more than two decades of industry experience, through which he has developed a strong understanding of operational dynamics and market trends, supported by his wide-ranging exposure and professional expertise.


Financial Strength

The Company’s asset-light, high-volume business model has enabled it to build a strong market presence, positioning its brand among the prominent importers of paper and related products in the southern region.


Governance
Board Structure

The BoD of the Company consists of two members, both of whom are owners. Mr. Muhammad Aslam Jilani serves as the executive director, while Mr. Muhammad Faisal holds the position of non-executive director.


Members’ Profile

Mr. Muhammad Aslam Jilani, with over two decades of experience, oversees the governance aspects of the business. He has also cultivated strong and long-standing relationships with both customers and suppliers.


Board Effectiveness

The Board has only two members and in comparison, to established corporates, the governance model is weak and needs improvement. The Board has no formal committees to assist the board.


Financial Transparency

M/s Mushtaq & Co., Chartered Accountants, act as the external auditors of the Company. They have issued an unqualified opinion on the financial statements of Salman Paper Products (Pvt.) Limited for the period ended Jun-25. The audit firm holds a QCR rating from ICAP and is classified in the “B” category on SBP’s panel of auditors. However, the lack of an internal audit function indicates scope for further strengthening of the corporate governance framework.


Management
Organizational Structure

Salman Paper Products (Pvt.) Limited has established a structured organizational framework aligned with its operational requirements. At present, the structure is segmented into four key functional areas: 1) Sales & Marketing, 2) Procurement, 3) Accounts & Finance, and 4) Collections & Recoveries.


Management Team

The management team is primarily composed of the sponsors, with Mr. Muhammad Aslam Jilani acting as the CEO, while Mr. Faisal Iqbal serves as the Chief Operating Officer, responsible for overseeing the Company’s core operations.


Effectiveness

The sponsors’ experience, supported by a professional management team, has enabled the Company to streamline its operations. However, the effectiveness and efficiency of management could be further strengthened through the establishment of formal management committees. The absence of such committees at Salman Paper Products (Pvt.) Limited highlights an area for improvement.


MIS

The Company’s Management Information System (MIS) generates comprehensive financial reports on a monthly basis. In addition, it produces a variety of management reports that provide valuable insights for senior management’s review. These reports are intended to support informed decision-making by highlighting key performance indicators, financial trends, and operational metrics. The Company relies on SAP Business ERP software to produce both MIS and operational reports.


Control Environment

In the absence of an internal audit department, all risks arising from business operations are identified, assessed, and reported under the direct supervision of the directors, ensuring oversight of operational efficiency.


Business Risk
Industry Dynamics

Pakistan’s packaging industry consists of four major segments, paper, plastic, tinplate and glass. Paper and plastic segments occupy the major share in total market. Over FY21–FY25, the Paper Packaging segment has remained largely stable in terms of production levels. Growth is supported by rising demand for sustainable packaging and tighter environmental regulations, including EPR, which favor recyclable fiber-based materials. Advances in barrier coatings (e.g., bio-based and nano-cellulose) are improving paper’s functional performance, while digital printing and small-batch production are enhancing supply-chain flexibility and boosting the appeal of customized paper packaging solutions. The production level of Paper over the last five years has a CAGR of ~3.5%. This reflects the stable demand of the segment as it makes up a significant portion of overall Paper and board production. The production of Paper decreased marginally by ~2.9% YoY in FY25 to ~355,513MT from ~366,267MT in FY24. Production declined to ~54,435MT as of 2MFY26 (2MFY25: ~61,464MT). (Source: PACRA Sector Study)


Relative Position

Salman Paper Products (Pvt.) Limited has established a strong market presence in Pakistan as an importer of Art Cards, Packaging Board, Stickers, and Printer Paper, commanding a notable share in these product segments.


Revenues

The Company’s revenue has shown a declining trend primarily due to reduced demand. Although the industry has experienced an overall decrease in sales volume, the impact on the Company has been partly mitigated by its pricing strategy.


Margins

Paper rolls being used be the Company are 100% imported. So, to maintain the margins, the Company passes on the cost to B2B consumers. In FY25, gross margin and operating profit margin both increased as compared to FY24. The GP margin increased from ~7.0% in FY25 from ~5.1% in FY24 while OP margin increased from ~5.2% to ~6.5% respectively. And, the net profit margin increased to ~4.0% to ~2.0% during the same period. The bottom-line of the Company clocked in at ~PKR 407mln during FY25 increased from ~PKR 273mln during FY24 (FY23: ~PKR 171mln).


Sustainability

Salman Paper Products (Pvt.) Limited has a well-established brand name in the market, especially in Art cards, Packaging board, Stickers, and Printer paper products.


Financial Risk
Working capital

Salman Paper Products (Pvt.) Limited has seen a significant improvement in its inventory turnover, inventory days decreasing from ~9 days at end-Jun'24 to ~7 days at end-Jun'25. This reduction in inventory days reflects the company's enhanced operational efficiency and stronger inventory management, resulting in a faster turnover of stock and improved overall business performance. The trade receivable days increased from ~23 days to ~33 days during the same period. But the trade payable days intact at ~2 days at end FY25. Consequently, the Company’s net working capital days increased to ~37 days at end FY25 from ~29 days at the end of FY24.


Coverages

In FY25, the Company’s FCFOs stood at ~PKR 639mln FY24 increasing from ~PKR 398mln in FY24 (FY23: ~PKR 463mln). As result during FY25, FCFO/Finance cost stood at ~ 5.8x FY25 increased from ~ 2.2x of coverage during FY24 (FY23: ~2.7x). The finance cost stood at ~PKR 111mln decreased from ~PKR 181mln (FY23: ~PKR 173mln).


Capitalization

The Company has a moderate leveraged capital structure primarily relying on short-term debt for managing its working capital needs. Its gearing ratio has decreased from ~50.5% at the end of FY24 to ~17.8% at the end of FY25 due to decrease in short-term borrowing. STB borrowing has decreased to ~PKR 301mln from ~PKR 1,022mln during the same period.
 
 

Apr-26

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Salman Paper Products (Pvt.) Limited


Rating Scale

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Apr-26

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Salman Paper Products (Pvt.) Limited


regulatory disclosure

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  1. Rating Team Statements
    1. Rating is just an opinion about the creditworthiness of the entity and does not constitute a recommendation to buy, hold, or sell any security of the entity rated or to buy, hold, or sell the security rated, as the case may be. (Chapter III; 14-3-(x))
    2. Conflict of Interest
      1. The Rating Team or any of their family members have no interest in this rating (Chapter III; 12-2-(j))
      2. PACRA, the analysts involved in the rating process, and members of its rating committee and their family members do not have any conflict of interest relating to the rating done by them (Chapter III; 12-2-(e) & (k))
      3. The analyst is not a substantial shareholder of the customer being rated by PACRA [Annexure F; d-(ii)]
      4. Explanation: for the purpose of the above clause, the term "family members" shall include only those family members who are dependent on the analyst and members of the rating committee.
  2. Restrictions
    1. No director, officer, or employee of PACRA communicates the information acquired by him for use for rating purposes to any other person, except where required under law to do so. (Chapter III; 10-(5))
    2. PACRA does not disclose or discuss with outside parties or make improper use of the non-public information which has come to its knowledge during a business relationship with the customer. (Chapter III; 10-7-(d))
    3. PACRA does not make proposals or recommendations regarding the activities of rated entities that could impact a credit rating of the entity subject to rating. (Chapter III; 10-7-(k))
  3. Conduct of Business
    1. PACRA fulfills its obligations in a fair, efficient, transparent, and ethical manner and renders high standards of services in performing its functions and obligations. (Chapter III; 11-A-(a))
    2. PACRA uses due care in the preparation of this Rating Report. Our information has been obtained from sources we consider to be reliable, but its accuracy or completeness is not guaranteed. PACRA does not, in every instance, independently verify or validate information received in the rating process or in preparing this Rating Report. (Clause 11-(A)(p))
    3. PACRA prohibits its employees and analysts from soliciting money, gifts, or favors from anyone with whom PACRA conducts business. (Chapter III; 11-A-(q))
    4. PACRA ensures before the commencement of the rating process that an analyst or employee has not had a recent employment or other significant business or personal relationship with the rated entity that may cause or may be perceived as causing a conflict of interest. (Chapter III; 11-A-(r))
    5. PACRA maintains the principle of integrity in seeking rating business. (Chapter III; 11-A-(u))
    6. PACRA promptly investigates in the event of misconduct or a breach of the policies, procedures, and controls, and takes appropriate steps to rectify any weaknesses to prevent any recurrence, along with suitable punitive action against the responsible employee(s). (Chapter III; 11-B-(m))
  4. Independence & Conflict of Interest
    1. PACRA receives compensation from the entity being rated or any third party for the rating services it offers. The receipt of this compensation has no influence on PACRA’s opinions or other analytical processes. In all instances, PACRA is committed to preserving the objectivity, integrity, and independence of its ratings. Our relationship is governed by two distinct mandates: i) rating mandate - signed with the entity being rated or issuer of the debt instrument, and ii) fee mandate - signed with the payer, which can be different from the entity.
    2. PACRA does not provide consultancy/advisory services or other services to any of its customers or their associated companies and associated undertakings that are being rated or have been rated by it during the preceding three years, unless it has an adequate mechanism in place ensuring that the provision of such services does not lead to a conflict of interest situation with its rating activities. (Chapter III; 12-2-(d))
    3. PACRA discloses that no shareholder directly or indirectly holding 10% or more of the share capital of PACRA also holds directly or indirectly 10% or more of the share capital of the entity which is subject to rating or the entity which issued the instrument subject to rating by PACRA. (Chapter III; 12-2-(f))
    4. PACRA ensures that the rating assigned to an entity or instrument is not affected by the existence of a business relationship between PACRA and the entity or any other party, or the non-existence of such a relationship. (Chapter III; 12-2-(i))
    5. PACRA ensures that the analysts or any of their family members shall not buy, sell, or engage in any transaction in any security which falls in the analyst’s area of primary analytical responsibility. This clause, however, does not apply to investments in securities through collective investment schemes. (Chapter III; 12-2-(l))
    6. PACRA has established policies and procedures governing investments and trading in securities by its employees and for monitoring the same to prevent insider trading, market manipulation, or any other market abuse. (Chapter III; 11-B-(g))
  5. Monitoring and Review
    1. PACRA monitors all the outstanding ratings continuously, and any potential change therein due to any event associated with the issuer, the security arrangement, the industry, etc., is disseminated to the market immediately and in an effective manner after appropriate consultation with the entity/issuer. (Chapter III; 17-(a))
    2. PACRA reviews all the outstanding ratings periodically on an annual basis. Provided that public dissemination of annual review and in an instance of change in rating will be made. (Chapter III; 17-(b))
    3. PACRA initiates an immediate review of the outstanding rating upon becoming aware of any information that may reasonably be expected to result in downgrading of the rating. (Chapter III; 17-(c))
    4. PACRA engages with the issuer and the debt securities trustee to remain updated on all information pertaining to the rating of the entity/instrument. (Chapter III; 17-(d))
  6. Probability of Default
    1. PACRA’s Rating Scale reflects the expectation of credit risk. The highest rating has the lowest relative likelihood of default (i.e., probability). PACRA’s transition studies capture the historical performance behavior of a specific rating notch. Transition behavior of the assigned rating can be obtained from PACRA’s Transition Study available at our website. (www.pacra.com) However, the actual transition of rating may not follow the pattern observed in the past. (Chapter III; 14-3(f)(vii))
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    1. All information contained herein is considered proprietary by PACRA. Hence, none of the information in this document can be copied or otherwise reproduced, stored, or disseminated in whole or in part in any form or by any means whatsoever by any person without PACRA’s prior written consent.

Apr-26

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