The Pakistan Credit Rating Agency Limited
Press Release
a

Rating Action
Lahore: (31-July-2006)
   

PACRA Assigns Entity Ratings to
Dewan Cement Limited (DCL)
 

 
Analyst
Ahmad Nouman
(+92-42-586 9504)
nouman@pacra.com

 

 

 









 

 

 

 

 

 

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Disclaimer
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The Pakistan Credit Rating Agency (PACRA) has assigned the long-term and short-term entity ratings of “A” (single A) and “A1” (A one), respectively to Dewan Cement Limited (DCL). These ratings denote a low expectation of credit risk and a strong capacity for timely payment of financial commitments.

The ratings reflect improving prospects of the company subsequent to acquisition by Dewan Mushtaq Group. The group has followed a well-conceived turnaround strategy involving strengthening of the capital structure, through further equity injection and debt re-profiling, and optimization of the production processes. Despite the anticipated decline in capacity utilization due to substantial capacity expansions across cement sector, any material impact either in sales or margins is unlikely. This is on account of the growing cement demand and likely continuation of producers’ understanding. The ratings also recognize DCM’s association with a well-diversified financially strong group as a key factor.

About the company: Dewan Cement Limited (DCL) – formerly Pakland Cement Limited, incorporated in 1980 and listed on the Karachi and Lahore stock Exchanges – is majority owned by Dewan Mushtaq Group through its different companies since 2004. The Group, a long established conglomerate in the country, has interests in synthetic fibers, automotive and allied, sugar and allied, textiles, oil and gas, cement, and general trading sectors. It also enjoys the privilege of having business associations with respected multinational corporations. The cement plant is located near Port Qasim, Sindh, mainly serving the country’s south zone.

Professionals, mainly serving the group in different capacities, dominate the company’s BOD, with only one member of Dewan family. The chief executive officer, a chartered accountant by profession, joined the company in August 2004 and is supported by a team of experienced professionals.
 
The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity.

PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings.

PACRA's opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.

 

    
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