The Pakistan Credit Rating Agency Limited
Press Release
a

Rating Action
Lahore: (03-July-2006)
   

PACRA Assigns Entity Ratings to
Kohat Cement Company Limited (KCCL)
 

 
Analyst
Moin Khalid
(+92-42-586 9504)
moin@pacra.com

 

 

 









 

 

 

 

 

 

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Disclaimer
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The Pakistan Credit Rating Agency (PACRA) has upgraded the long-term and short-term entity ratings of Kohat Cement Company Limited to “A” (Single A) and “A1” (A One), respectively. The ratings denote a low expectation of credit risk emanating from a strong capacity for timely payment of financial commitments.

The rating reflects the augmentation in the risk absorption capacity through retention of robust profits and a recent right issue. Despite an anticipated decline due to substantial capacity expansions across the sector, the overall capacity utilization and margins levels are expected to remain at reasonably comfortable levels in the wake of growing cement demand and likely continuation of producers’ understating. KCCL, owing to its locational advantage and expected increase in market share through sizeable capacity enhancement, is well positioned to capitalize on the emerging business opportunities.

About the company: Kohat Cement Company Limited (KCCL) was established in 1980 under the State Cement Corporation of Pakistan. The company, subsequent to its privitization in 1992, was acquired by Atta group, which currently holds around 80% of the stake. All the directors, belonging to the Atta family, are high worth individuals. The group also has major interests in real estate and hotel business. The chief executive has an extensive exposure to the cement industry and remained the Chairman of All Pakistan Cement Manufacturers Association (APCMA) for six years (Apr97-Mar03).

The company currently has an annual production capacity of 0.567mln tons of grey cement, which would be raised to 2.667mln tpa, through expected completion of a new production line in Jul07.  Meanwhile, the company has recently installed a white cement plant of 0.135mln tpa capacity.
 
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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