The Pakistan Credit Rating Agency Limited
Press Release


Muhammad Atif Chaudhry

Applicable Criteria

Related Research

This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA maintains the rating of MACPAC Films Limited

Rating Type Entity
(16-Dec-22 )
(17-Dec-21 )
Action Maintain Upgrade
Long Term BBB BBB
Short Term A2 A2
Outlook Stable Stable
Rating Watch - -

The ratings reflect MACPAC Films Limited's ("MACPAC" or the "Company") established position within the Biaxially Oriented Polypropylene (BOPP) segment of the industry. Over the period, the Company has established a suitable business profile and is now increasing its footprints in the Cast Polypropylene (CPP) segment of the industry. Both are bi-products of petrochemical of which price is linked to oil and gas prices. The raw material of the finished product is ~100% imported hence, exposed to exchange rate risk. As per management representation, the Company approximately holds 11% market share. The production utilization of the Company is directly linked with foods and consumer products. During FY22, the utilization level remained on the higher side at ~82% (FY21: ~72%).
The Company has maintained healthy margins and profitability despite its raw material being sensitive to exchange rate volatility and inflated commodity prices. The total sales volume of the Company increased by ~15% during FY22. The top line of the Company increased by ~38% during the period. The Company has generated a topline of ~ PKR 4,174mln in FY22 as compared to ~PKR 3,025mln in FY21. In FY22, MACPAC Films Limited generated a humble bottom line of ~PKR 184mln (FY21: ~PKR 187mln). The long-term prospects of the Company are linked with demand and expansion in the local packaging business. The main contributor towards profitability was the improved revenue base due to volumetric sales growth. Resultantly, the coverage of the Company has also improved by significant margins. The Company has a low-leveraged capital structure where the long-term debt was related to expansion activities. Currently, MACPAC is in the phase of minimizing its debt and has managed to reduce its borrowings both long and short-term through effective working capital management.
The ratings are dependent upon the company’s ability to sustain its healthy business profile amidst strong competition, herein, effective and prudent management of financial risk indicators remain important. Moreover, upholding of governance framework is vital.

About the Entity
MACPAC Films Limited was incorporated as a Public Limited Company in 1993. The Company is listed on the Pakistan Stock Exchange. MACPAC Films produces multiple grades of BOPP film variants at an installed capacity of 15,000 MT per annum. The Company's diverse portfolio includes multi-layered CPP film variants, manufactured at an installed capacity of 7,000 MT per annum. These films have applications in confectionery: biscuits, cookies, snacks, tea, and baked products packaging. MACPAC Films is primarily owned by the Elahi family ~53.96%, out of which major ownership residing with Mr. Shariq Maqbool Elahi ~15.45%, Mr. Habib Maqbool Elahi ~15.45%, and Mr. Ehtesham Maqbool Elahi ~16.60%. Munshi family owns a 15.35% stake in the Company. The remaining holding lies with the Employees Old Age Benefit (EOBI) and the Financial Institutions. The Company has a free float of ~32.62%.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.