PACRA Maintains Entity Ratings of Ultra Pack (Pvt.) Limited

Ultra Pack (Pvt.) Limited (UPPL) is engaged in the manufacturing of polypropylene (PP) based industrial packaging solutions, primarily catering to the cement sector. The company has an installed production capacity of ~126 million bags per annum and commands an estimated market share of around 21% in the PP bag segment in the North region. A key strength of the company remains its strong business linkage with its affiliated entity, Kohat Cement Company Limited, which provides a stable demand base and supports business continuity even during periods of industry volatility. The operating environment during FY25 and the 1HFY26 has shown gradual improvement following a period of subdued activity and lower capacity utilization across the cement sector. Macroeconomic indicators have begun to stabilize, supported by relative stability in the foreign exchange market and a gradual easing in policy rates and inflation. These developments have contributed to a recovery in domestic construction and infrastructure-related activities. As a result, cement dispatches recorded an increase of ~10% year on year, reaching about 25.8 million tons. The improvement in sector activity has positively influenced demand for cement packaging, allowing UPPL to record higher utilization levels during the 1HFY26. The PP bag manufacturing industry remains dependent on imported polypropylene resin, the pricing of which is closely linked with international crude oil trends. Recently, crude oil prices have exhibited volatility amid ongoing geopolitical tensions and escalations. This exposes manufacturers to potential pressure on input costs, particularly when coupled with exchange rate fluctuations. Such dynamics may affect the company’s ability to sustain margins in the medium term. In addition, elevated raw material prices may indirectly dampen construction activity by increasing overall building costs. In response to these challenges, the company is exploring opportunities to broaden its revenue base. Management is actively pursuing export prospects and undertaking product diversification initiatives. In this regard, the company has started expanding into the stitched bag segment to tap demand from the agricultural supply chain, particularly flour and rice milling sectors, which may provide an additional avenue for growth and reduce reliance on a single end user industry. Financial performance during 1HFY26 reflects an improvement in operational activity. The company’s topline increased by 18% compared to the corresponding period last year, primarily driven by higher sales volumes. Profitability indicators also improved across operating and net levels, supported by better capacity utilization and improved margins. The company’s financial risk profile remains characterized by modest coverages and cash flow generation. The capital structure is leveraged and largely supported by short term borrowings, while the equity base remains relatively modest.
The ratings remain dependent on UPPL’s ability to sustain its market position amid a challenging industry landscape while enhancing its financial performance. Successful execution of diversification plans, prudent working capital management, and maintaining sufficient cash flows and coverage ratios will be crucial for the company's rating. Any significant decline in profitability and coverage metrics could impact the ratings adversely.

About the Entity
Ultra Pack (Pvt.) Limited, incorporated in 2016, is a private limited concern principally engaged in the production & sale of PP bags. During 2017, the Company formally started its operations by installing the latest Extrusion & Bag Conversion technologies. The Company is wholly owned by ANS Capital (Pvt.) Ltd. (~100%) through sponsoring family. Mr. Ibrahim Tanseer Sheikh is the CEO of the Company. He has 14 years of diversified professional experience in cement and paper & packaging sectors. He is assisted by a team of qualified professionals.