PACRA Assigns Rating Watch and Maintains the Entity Ratings of NIMIR Industrial Chemicals Limited

NIMIR Industrial Chemicals Limited (“NICL” or “the Company”) specializes in the manufacturing and sale of Oleochemicals and Chlor Alkali products, including Soap Noodle, Stearic Acid, Glycerin, Caustic Soda, and a variety of industrial chemicals. The Company also provides toll manufacturing services for Toilet Soaps, Aerosols, Personal Care Products, and Home Care Products. The ratings reflect NICL’s strong and diversified presence in Pakistan’s chemical industry, its long-standing pioneering position in oleo-chemicals, and its third-party manufacturing relationships with leading multinational FMCGs. Pakistan’s chemical sector navigated mixed demand conditions during the period, with the chlor-alkali segment facing weaker offtake from the soaps and detergents industry, while pricing remained shielded by import duty protection and the sector’s integrated production economics. The oleochemicals segment, in which NICL holds the dominant domestic position, benefited from import substitution, though it remains characterized by high working capital intensity. The Hub, Balochistan facility, acquired from Procter & Gamble Pakistan, is now operating at optimum capacity, with its installed capacity for Soap Noodles increasing to ~84,000 MT in FY25 from ~54,000 MT in FY24, materially strengthening NICL’s Third-Party Manufacturing (3PM) segment and reinforcing its footprint in the southern region. Integration benefits from the facility are expected to further support revenue and capacity utilization going forward. All major capital projects, including the Liquid Chlorine and Chlorinated Paraffin Wax plants, have also transitioned to full commercial operations, removing implementation risk. Against this backdrop, NICL benefited from recovering demand in its oleochemicals segment, while the chlor-alkali segment recorded a volume decline. Net revenue for FY26 stood at ~PKR 48,291mln against ~PKR 45,255mln for FY25, reflecting growth of ~6.7%, continuing the recovery from FY24’s macroeconomic-driven contraction. Gross margin improved to ~15.7% (FY25: ~14.8%) due to efficient pricing strategy and cost discipline, despite input cost and exchange rate volatility. The Company’s financial risk profile is characterized by improving coverages, supported by free cash flow generation and declining finance costs. Capital structure reflects a deleveraging trend, primarily driven by growth in the equity base, while total borrowings remained broadly stable with long-term debt repayments offset by higher short-term borrowings. Working capital, however, has been on a lengthening trajectory over the past two years, driven primarily by extended receivable collection periods, warranting continued monitoring. The ratings have been placed on Rating Watch on account of the anticipated change in ownership of the Company, as the majority shareholders of NICL have entered into a Share Purchase Agreement with Cherat Cement Company Limited for the sale of a ~51.0% stake in the Company, subject to the fulfilment of conditions precedent and regulatory approvals. As the rating implications of the change in sponsor cannot be fully determined at this stage, PACRA will continue to monitor the developments and resolve the Rating Watch upon completion of the transaction.
The ratings remain dependent on the continuous expansion of NICL’s revenue base, along with sustained improvement in margins and profitability. Prudent management of the working capital cycle, with optimum capacity utilization and compliance with the shared financial projections, will remain important. Going forward, the successful completion of the transaction, the resulting ownership structure, and the support of the new sponsor will be key rating considerations.

About the Entity
Nimir Industrial Chemicals Limited was incorporated in 1994 and manufactures oleochemicals and Chlor Alkali products. The Company has been led by CEO Mr. Zafar Mahmood since August 2007. Its majority shareholders have agreed to sell a ~51.0% stake to Cherat Cement Company Limited, which is pending completion.