PACRA maintains the entity ratings of Poly Pack (Pvt.) Limited

Poly Pack (Pvt.) Limited (or the “Company”) is predominately manufacturing Poly Propylene Woven Bags. The Company is also engaged in the manufacturing of Polyethylene Plain Films, Polyethylene Shrink Film, POF Shrink Film, and Flexible Packaging. The Company is entirely family-owned, with sponsors possessing extensive expertise in packaging, having been active in the industry since 1991. The raw material of the finished product is ~100% imported hence, exposed to exchange rate risk. The demand for the product is derived from various industries including textile, sugar, fertilizer, chemical, edible ghee/oil, beverages and confectionery/FMCG. The strong customer base of the Company bodes well for the assigned rating. The plant has an annual production capacity of 60,000 MT, with utilization rising to 74% in FY24 from 68% in FY23. As per management representation, the Company has captured the major share of the PP Woven Bags market. Almost 60% of the Company's total sales are made in the Punjab region. The Company is in the process of setting up a Bi-axially Oriented Polypropylene (BOPP) plant of 50,000 MT with an approximate cost of USD 60mln in the Special Economic Zone, Sheikhupura. It will be operated as an associated Company of Poly Pack (Pvt.) Limited, named “Poly Pack Films (Pvt.) Limited”. This project features a backward integration model, reserving 10%-15% for in-house use while supplying the remainder to external markets. Set to commence operations by June 2025 or earlier, Poly Pack Films (Pvt.) Limited is positioned to become Pakistan’s third-largest BOPP film supplier, as per management representation. The Company has developed an effective mechanism for identifying, assessing, and reporting all types of risk arising out of the business operations.
On the financial profile side, the Company's revenue hasn't experienced substantial growth. In FY24, Poly Pack (Pvt.) Limited achieved a topline of PKR 15,503mln, marking a minor increase of about ~2.8% compared to PKR 15,077mln in FY23. Whereas, it stood at PKR 4,329mln at the end of 3MFY25. The gross profit margin declined from 8.5% in FY23 to 7.2% in FY24, due to high cost of sales primarily driven by increased raw material consumption. In 3MFY25, it further moderated to 7.1%. Consequently, the net profit margin experienced a slight contraction from 5.1% to 5.0% over the same period, standing at 4.6% in 3MFY25. The bottom-line of the Company clocked in at ~PKR 775mln during FY24 increased from ~PKR 771mln during FY23, driven by a reduction in finance cost. Whereas, by the end of 3MFY25, it amounted to PKR 198mln. The product demand is expected to strengthen further as macro-level fundamentals improve, leading to enhanced margins. The Company is low leveraged with sound financial indicators as of Sep'24. The trends of equity injections show strong financial commitments of the sponsors.
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 essential for the ratings. Any significant change in margins and coverages will impact the ratings.

About the Entity
Poly Pack (Pvt.) Limited was founded as a private limited Company in 1991 and began its operations with the commercial production of Poly Propylene Bags. The Company is currently among the largest producers of plastic packaging products in Pakistan. The Company’s manufacturing plant is located near Raiwind. The Company is wholly owned by the sponsor family with major ownership of ~43.6% residing with Mr. Iftikhar Ahmed, followed by Mr. Aamir, Mr. Bilal, and Mr. Abdullah owns ~15.6% shares respectively while Mrs. Nazia Iftikhar owns ~9.4% shares.