Rating Action
Lahore: (30-April-07)

Analyst
Maimoon Rasheed
(+92-42-586 9504)
maimoon@pacra.com

Disclaimer
This press release is transmitted to you for this sole purpose of dissemination through your newspaper/magazine/agency. The press release may be used by you in full or in part without changing the meaning or context thereof but with due credit to PACRA. However, PACRA has the sole right of distribution of its press releases for consideration or otherwise through any media.

The ratings reflect ECPL’s relatively low business risk emanating from a favourable demand / supply equilibrium and stable margins. The ratings also take into account the company’s well-conceived strategy of persevering its position through growth. In line with this strategy, ECPL is undergoing major expansion in its core urea manufacturing facility that would be funded through combination of equity injection and significant procurement of debt. While this would stretch ECPL’s currently low leveraged capital structure and robust cash flows, the financial risk is expected to remain within acceptable limits. Meanwhile, the company’s diversification strategy continues to augment profitability in terms of return on investment in subsidiaries.

The Pakistan Credit Rating Agency Limited	Press Release
a
Rating Action Lahore: (30-April-07)

		PACRA Maintains Entity Ratings of Engro Chemical Pakistan Limited

Analyst Maimoon Rasheed (+92-42-586 9504) maimoon@pacra.com www.pacra.com Disclaimer This press release is transmitted to you for this sole purpose of dissemination through your newspaper/magazine/agency. The press release may be used by you in full or in part without changing the meaning or context thereof but with due credit to PACRA. However, PACRA has the sole right of distribution of its press releases for consideration or otherwise through any media.		The Pakistan Credit Rating Agency (PACRA) has maintained the long-term and the short-term entity ratings of ECPL at “AA” (Double A) and “A1+” (A one plus), respectively. These ratings denote a very low expectation of credit risk and a very strong capacity for timely payment of financial commitments. The ratings reflect ECPL’s relatively low business risk emanating from a favourable demand / supply equilibrium and stable margins. The ratings also take into account the company’s well-conceived strategy of persevering its position through growth. In line with this strategy, ECPL is undergoing major expansion in its core urea manufacturing facility that would be funded through combination of equity injection and significant procurement of debt. While this would stretch ECPL’s currently low leveraged capital structure and robust cash flows, the financial risk is expected to remain within acceptable limits. Meanwhile, the company’s diversification strategy continues to augment profitability in terms of return on investment in subsidiaries. *About the Company:* Engro Chemical Pakistan Limited (ECPL) was incorporated in 1965. The core business of ECPL is manufacturing and marketing of fertilizers. ECPL is the second largest producer of urea in the country, which is produced at the plant site in Daharki. The company has also diversified its interests as strategic investments, which include (a) Engro Vopak Terminal Limited, a jetty and chemical terminal facility at Port Qasim (b) Engro Asahi Polymer and Chemicals Limited, the first PVC resin manufacturing plant in the country, (c) Engro Foods Limited, currently in the dairy business, (d) Engro Energy (Pvt.) Limited, and (e) Engro Innovative Automation (Pvt.) Limited. The Dawood Group (DG) holds a majority 42% stake in ECPL, while the holding of Engro employees and Employees Trust stands at 12%. The association of DG has augmented the capacity of the Board to guide the management in formulating its long-term strategy.