PACRA Maintains Entity Ratings of Sarena Textile Industries (Private) Limited
Sarena Textile Industries (Private) Limited specializes in weaving, dyeing, printing, finishing and stitching. The Company offers a variety of finishes and has created a niche where it processes and produces specialized cloth for fire resistant and other uniforms. It is the only licensee for PROBAN® in Pakistan. The Company employs experienced professionals, aided by comprehensive reporting, who look after operations of the Company with complete autonomy. The Company has established its presence in the overseas market and also considered a strong player in local market as the revenue is balanced almost equally between the local and export market. Captive clientele in shape of group companies, provide an advantage in local sale. The Company managed to sustain its revenues despite adverse impact of COVID-19, although it was unable to generate higher revenues as planned. The Company has a strong financial profile characterized by robust coverages and improving working capital management reflected by an adequate borrowing cushion. Almost all of the borrowings of the Company are on SBP concessional rates, insulating it from interest rate movement. The Company has availed principal deferment of loans under the SBP scheme providing relief to cashflows. The COVID-19 outbreak has created uncertainity, which impacted the entire textile chain. The demand is gradually improving as lockdown in domestic and global markets eases. However, this recovery is still at nascent stage and could be derailed due to subdued macroeconomic factors and/or second wave of COVID pandemic.
The ratings are dependent on the management’s ability to sustain its operations and margins amidst tough prevailing conditions in Pakistan and internationally. Maintaining prudent working capital management practices and strong coverages is important. Adverse movement in margins and/or coverages will impact the ratings.
Sarena Textile Industries (Private) Limited, incorporated in 2001, is part of the Sefam and Ali Group of Industries, most famous for its fashion brand Bareezé. The Company has its plant located at Sheikhupura Road. The Company have 185 Looms inclusive of 100 Toyota Air Jet looms and 85 Sulzer Air Jet looms. Ownership of the Company lies with the four children of Mr. J.A Zaman (late). Mr. Zaman founded Ali Embroidery Mills (Private) Limited in 1972, which later became the launching pad for Sefam & Sarena Group of Industries. The Group has expanded its operations over the years and owns many well-known retail brands, such as, Bareezé, Leisure Club, Minnie Minors, Chinyere, Home Expressions and Kayseria, among others.
Majority of the ownership (84%) lies with Mr. Hamid Zaman and Ms. Seema Aziz, both of whom are educated from prestigious universities and have a diverse background in the textile industry. Operations of the company are looked after by the Chief Executive Officer, Mr. Asif Masood.