PACRA Assigns Initial Entity Ratings to Tufail Starchem Industries (Private) Limited

The assigned rating reflects Tufail Starchem Industries (Private) Limited’s (“TSIL” or “the Company”) growing presence in the industrial chemicals sector, supported by a diversified product portfolio serving as key inputs in textile processing, leather tanning, water treatment, paints and coatings, and other industrial applications. The Company manufactures a range of inorganic and organic chemicals, including acids, solvents, and specialty chemical formulations. TSIL is a wholly owned subsidiary of Tufail Multichem Holdings (Private) Limited, the holding entity of the Pervez Group. The demerger established distinct ownership and management structures, providing greater clarity in control and strategic direction while enabling the respective businesses to operate independently. The Company’s product range includes formic acid, sulphuric acid, N-butyl acetate, alum sulphate, sodium sulphate, Acetex Plus, and acetic acid. Sulphuric acid remained the largest revenue contributor in FY26, followed by formic acid and N-butyl acetate, indicating a concentration of revenue across three key product lines. The Company has an installed production capacity of 50,000 MT per annum. Pakistan’s industrial chemicals sector remains exposed to global commodity price volatility, imported raw material costs, exchange rate fluctuations, and demand variations across key consuming industries. Demand for the Company’s products is linked to downstream sectors, including fertilizers, textiles, leather, and paints and coatings. Profitability is consequently influenced by fluctuations in input costs and the ability to pass these on to customers. In 2026, geopolitical tensions in the Middle East and restrictions on sulphuric acid exports contributed to a sharp increase in global sulphur and sulphuric acid prices. Although prices subsequently retreated from their mid-year peaks, continued volatility in international markets remains a key risk for producers reliant on imported inputs. Against this backdrop, the Company reported revenue of PKR 2,298.6mln in FY26 (FY25: PKR 1,309.6mln; FY24: PKR 1,020.5mln), reflecting growth of 75.5% in FY26 and 28.3% in FY25. The increase in FY26 was primarily driven by higher realized prices of sulphuric acid and increased sales of N-butyl acetate, partially offset by lower sales of other products. Profitability also improved during FY26, with the recovery largely attributable to improved realizations rather than volume-led growth. The Company’s financial risk profile is supported by adequate coverages, capital structure, and working capital cycle. The capital structure, is leveraged, where borrowings are comprised of short-term for working capital management. The Company’s governance framework has scope for enhancement, particularly through greater Board independence and stronger oversight, given the absence of independent directors. Further strengthening Board composition and oversight would support improvements in the overall governance framework.
The ratings are dependent on the Company’s ability to sustain its market position. Furthermore, sustained growth in revenues, and improvement in margins, as depicted in financial projections shall remain imperative.

About the Entity
Tufail Starchem Industries (Private) Limited (“TSIL” or “the Company”) is a wholly owned subsidiary of Tufail Multichem Holdings (Private) Limited, the holding entity of the Pervez Group. The Company was established following the restructuring of the Tufail Group. The Pervez Group, represented by Mr. Pervez Tanveer Tufail and his family, retains effective control over the Company’s strategic direction. The shareholding remains entirely promoter-held. The Board is chaired by Mr. Pervez Tanveer Tufail, who also serves as the Company’s CEO, and is supported by experienced board members.