Sohail Ahmed Qureshi
PACRA Assigns Initial Entity Ratings to Meezan Plastic Industries (Pvt.) Limited
Meezan Plastic Industries (PVT) Limited (“the Company” or “MPI”) ratings reflect an emerging business profile in the packaging industry. The Company manufactures and sells different types of BOPP / OPP (Biaxially Oriented Polypropylene) packaging material for food and non-food products through company-operated sales points located in Faisalabad and Lahore. The local packaging industry is fragmented and dominated by a large unorganized segment. The product demand is high due to the growing population, urbanization, and the eCommerce revolution. Meezan Plastic Industries (Pvt.) Limited is owned and managed by close family members and lacks formal succession planning. The governance structure is considered weak due to the absence of a formal board structure, board committees, and independent oversight, furthermore external auditors are not QCR rated and denote room for improvement. The Management has a well understanding of business and operational efficiencies being monitored through budgets, forecasts, and projections. During 6MFY22 revenues depicted ~10% growth and stood at PKR 1,376mln, where net margins sustained around ~5%. The financial risk profile of the Company is considered good, with sufficient cashflows and an adequate working capital cycle. The operations of the Company are managed through internally generated cash flows and there is no plan to obtain short-term and long-term borrowing facilities in the future. The Company has availed a non-funded facility from a financial institution to import key raw materials.
The ratings are dependent on the firm’s ability to sustain its position amidst changing business environment 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.
Meezan Plastic Industries (Pvt.) Limited is a private limited company incorporated in Pakistan in June 2018 under the Companies Ordinance 1984. It is family owned and operated business with shareholding divided among 2 members, Mr. Hafiz Muhammad Atif (70%), and Mr. Yasir Amin (30%). Mr. Hafiz Muhammad Atif is the founding member and CEO of the company since its incorporation.