The Pakistan Credit Rating Agency Limited
Press Release


Muhammad Atif Chaudhry

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PACRA maintains the entity ratings of Bulleh Shah Packaging (Pvt.) Limited

Rating Type Entity
(05-Sep-23 )
(05-Sep-22 )
Action Maintain Initial
Long Term AA- AA-
Short Term A1 A1
Outlook Stable Stable
Rating Watch - -

Bulleh Shah Packaging (Private) Limited ‘BSP’ or (‘The Company’) ratings reflect the strong sponsor's profile, established market position, and adequate financial profile. The Company is a wholly-owned subsidiary of Packages Limited. The assigned rating takes into account the strong governance framework, strong control environment, and qualified and experienced management team. BSP is predominately manufacturing i) Corrugated boxes and ii) Paper & Paper boards. As per management representation, the Company’s market share in the overall industry (Paper & Board) is almost ~15%. Liquid packing board (falls under the purview of paper & Board) - the Company is the sole manufacturer in this segment, and Corrugated board – BSP is the major supplier and holds 16% market share. During CY22, the utilization level remained on the higher side Corrugator~97% and paper and board 85%. In order to improve productivity and capture further market share of imported paperboard, BSP has performed BMR on its paper and board mill.
As far the financial performance is concerned, the top line of the Company has shown an increasing trend due to an increase in sale price but the increase in prices of products has impacted demand. Though, an industry-wide volumetric decrease in sales has been reported but, the selling prices have absorbed the impact to much extent. During 6MCY23, the Company generated a top line of ~PKR 31,391mln (6MCY22: ~PKR 21,631mln, CY22: ~PKR 47,589mln), showing an increase of ~ 32% in revenue. However, considering i) PKR depreciation ii) foreign exchange losses, and iii) finance cost, the bottom line of the Company clocked in at ~PKR 996mln in 6MCY23 decreased from ~PKR 2,031mln in 6MCY22 (CY22: ~PKR 3,280mln). The Company is strengthening its revenue base by devising new business strategies in the export segment. The Company has received ~PKR 6bln insurance claim during the period which is partially utilized for BMR and working capital management. On the other side, leverage indicators continue to remain elevated on account of higher utilization of short-term and long-term borrowings for funding working capital requirements and performing BMR work on its paper and board mill respectively. However, STB has been reduced due to efficient working capital management. The Company is also exploring ways to reduce the reliance on imported raw materials so that, the supply chain can be made more efficient. Going forward, the impact of higher finance costs & overheads on profitability is expected to be offset by an improvement in margins and an increase in the top line. However, the Company has been managing its energy requirements by using a mix of Biomass, Gas, and supply from WAPDA.
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 imperative for the ratings. Any significant decrease in margins, profitanility and coverages will impact the ratings.

About the Entity
Bulleh Shah Packaging (Private) Limited was incorporated as a private limited company on September 16, 2005. The primary purpose of the project was the backward integration of the packaging business of Packages Limited. Mr. Syed Haider Ali is the chairman of the board and Mr. Asghar Abbas is the CEO of the Company has joined Packages Limited in 1998 and developed strategic and functional level expertise in the packaging business over the years. Mr. Asghar Abbas has been associated with the BSP since 2017 and in the CEO position since 2020.

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