PACRA Maintains Entity Ratings of Multi-Resin Industries

Multi Resin Industries (‘MRI’ or ‘the Firm’) is primarily engaged in the manufacturing & sale of industrial resins, characteristically used across a wide range of sectors (including textile, paint, leather, construction, wood, etc.) in Pakistan. The ratings reflect Firm’s emerging presence in the chemical industry, supported by its diverse product portfolio that adds value for clients and promotes sustainable development. The performance of Pakistan’s resin industry is closely linked to economic activity in the construction sector, which has historically been impacted by economic slowdowns, hyperinflation, and reduced consumer purchasing power, leading to decreased demand for construction materials, including resins. The resin segment is largely a price taker due to its heavy reliance on imported raw materials, with finished goods primarily sold in the local market. The industry is also vulnerable to global supply chain disruptions and price volatility, given its dependence on imported raw materials and its strong connection to global oil prices. The local resin manufacturing industry faces significant challenges, particularly in the textile resin segment for export-oriented textile customers. This is due to favorable business conditions and certain duty exemptions that allow export-oriented companies to import resin as a raw material. Consequently, most of MRI’s offtake serves the textile sector, with these sales recorded locally thus impacting the MRI’s volumes. Consequently, the Firm’s topline declined by ~14.7% in FY24, primarily attributable to a volumetric decrease and stagnant pricing. However, the Firm’s profit margins preserved at all levels, supported by cost efficiencies. Ownership structure of the firm is entirely represented by the sponsoring family and they have a solid understanding of the business. However, the board entirely consists of close family members and lacks independent oversight thus indicating room for improvement. Going forward, the management intends to materialize the envisaged strategies by enhancing its production capacity, followed by expansion of facility and product diversification. Financial risk profile of the firm is demonstrated by modest cash flows, adequate coverages, and stretched working capital cycle. MRI’s capital structure is low leveraged, exclusively encompassing short-term borrowings. To ensure compliance and smooth operations, implementing internal controls and a good governance structure is essential. Additionally, transitioning from a partnership to a Private Limited Company would be view positively.
The ratings are dependent on the Firm’s ability to sustain its position amidst a dynamic business environment, achieve positive topline growth, and successfully execute strategies for corporatization. Achieving consistent growth, improving margins, and delivering on prudent financial management, as outlined in Firm projections, will remain critical. Enhancing the governance framework for better oversight of strategic affairs is also essential.

About the Entity
Multi Resin Industries, established in 1997 under the Partnership Act of 1932, is a family-owned partnership firm. It manufactures chemicals like Adhesive Emulsion, Homo Polymer, Co-Polymers, Cross-linking Agent, Acrylates-based dispersion, pure Acrylates, and Styrene modified Acrylates under the brand ‘Multiteck’, catering to various sectors including Textile, Paint, Paper & Packaging, Construction, Leather, and Wood. Ownership is distributed among the sponsoring family, with Mr. Farooq Ahmed (Chairman) owning the largest share at 14.50%. His brothers Mr. Anees, Mr. Masood, Mr. Khalid, Mr. Asif, and Mr. Arif, as well as his wife Ms. Naila Zareen, each hold an equal share of 14.25%. Mr. Muhammad Anees (CEO), with over two decades of industrial experience, has been with the firm since its inception and is supported by a skilled team.