Sohail Ahmed Qureshi
PACRA Assigns Positive Outlook to E-Vision Manufacturing Limited
The ratings reflect the adequate business profile of E-Vision Manufacturing Limited (“the Company” or “E-Vision”) and its established position in the regenerated polyester staple fiber (r-PSF) industry. The Company has identified a niche in the textile industry by manufacturing fine white, black, and green regenerated polyester staple fiber and polyester chips using post-consumed polyethylene terephthalate (PET) bottles. This market is relatively new and in the growing phase. Management represented those various global environmental authorities are promoting to use of r-PSF as against virgin PSF because the manufacturing process of r-PSF consumes less energy, and does not deplete natural energy resources and r-PSF is ~75% cheaper than virgin polyester fiber. During CY21 revenues showed recovery as compared to the dip in CY20, which exhibited a CAGR of ~16% since CY19. Margins also depicted improvements at all levels due to efficient raw material sourcing and more reliance on imported raw materials, this captures a positive outlook. The financial risk profile of the Company is considered adequate with comfortable coverages, cashflows, and working capital cycle. Capital structure is leveraged where borrowings are comprised of short-term for working capital management. Going forward the sponsors of the Company have approved a future capacity expansion plan from 60tpd (current) to 100tpd. The cost of expansion will be covered from internally generated cashflows and equity contributions with a conservative leverage policy.
The ratings are dependent on upheld sustainable revenues and margins. Meanwhile, maintaining an adequate leveraged capital structure and strong coverages remain critical. Going forward, a better governance framework, improvement in the control environment, and strengthening the quality of external audit function by engaging auditors which are included in SBP’s panel of auditors.
E-Vision Manufacturing Limited is a public, unlisted entity incorporated in 2013. The Company is engaged in the manufacturing and regeneration of polyester staple fiber with a gross production capacity of 60 tons per day. The Company’s major shareholding (~60%) is held through an offshore investment Company, Marylebone Management Limited, incorporated in the British Virgin Islands and owned wholly by Mr. Salman Ganny. The remaining shareholding (~40%) rests with Mr. Abdul Ghaffar (CEO).