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

The assigned rating reflects Tufail Multichem Industries (Private) Limited’s (“TMIL” or “the Company”) established market position as a leading manufacturer of anionic and nonanionic surfactants, which serve as principal active ingredients in laundry detergents, dishwashing products, shampoos and other personal care and household cleaning formulations. The Company is a wholly owned subsidiary of Tufail Multichem Holding Industries (Private) Limited, which acts as the parent and holding company. In FY24, the Tufail family undertook a restructuring, separating TMIL under the Pervez family and Tufail Chemicals Industries Limited (TCIL) under the Zubair family. The demerger established distinct ownership and management structures, providing greater clarity in control and strategic direction while enabling each business to operate independently. The Company’s product portfolio comprises Linear Alkyl Benzene Sulphonic Acid (LABSA) in 96% and 90% grades, Sodium Lauryl Ether Sulphate (SLES), Cocamidopropyl Betaine (CAPB) and a small basket of other chemicals. LABSA 96% remained the primary revenue contributor in FY26, followed by SLES, reflecting a concentrated product mix. The Company has an installed production capacity of 50,000 MT per annum and primarily serves the domestic market, with the Central region representing its largest market, followed by the North and South. Exports contribute a relatively smaller share of revenue. Pakistan’s surfactant and chemicals industry caters to the detergents, personal care, textile, leather and water-treatment sectors. The LABSA segment faces significant supply-side competition, with estimated domestic capacity exceeding ~250,000 MT against demand of almost ~130,000-140,000 MT, indicating oversupply and competitive pricing. Demand remains linked to household cleaning consumption and activity in downstream industries. Producers are also exposed to fluctuations in imported raw material prices and availability, particularly LAB and sulphur. Furthermore, the termination of anti-dumping duties on LABSA imports in January 2026 has heightened exposure to import competition. Within this operating environment, the Company benefits from its established market presence and manufacturing capabilities. The Company reported revenue of PKR 18,492mln in FY26 (FY25: PKR 12,907mln; FY24: PKR 10,010mln), reflecting growth of 43.3% in FY26 (FY25: 28.9%), primarily driven by higher LABSA sales volumes. Profitability recovered in FY26 following a margin squeeze in FY25. The recovery was supported by improved realized prices, better cost absorption and lower operating expenses, resulting in an improvement across gross, operating and net margins. 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. The Company aims to strengthen its governance framework through further improvements in Board composition and oversight.
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 Multichem Industries (Private) Limited ('TMIL' or the Company) is a private limited company incorporated in Pakistan and is a wholly owned subsidiary of Tufail Multichem Holding Industries (Private) Limited, which acts as the parent and holding company and also holds a 97.5% stake in Tufail Starchem Industries (Private) Limited and a 100% stake in Tufail Chemicals UK Limited, a company domiciled in the United Kingdom. Mr. Pervez Tanveer Tufail, Chairman and Chief Executive Officer of TMIL, heads the branch of the Pervez Tufail family that assumed ownership of the Company following the division of the family business in FY24.