Nimir Chemical Pakistan (hereafter referred to as ‘NCPL’ or ‘the Company’) is a public limited company incorporated on November 30, 1989, by the Ravi Group as ‘Ravi Chemicals Limited’. The registered office of the Company is situated at 1st Floor, Amin Arcade, 7-Durand Road, Lahore.

The Company's inception dates back to 1989 when it was originally established under Ravi Chemicals Limited. In 1994, a significant development occurred when Hoechst AG, Germany, entered into a joint venture with Ravi Chemicals Pakistan, rebranding the Company as Hoechst Ravi Chemicals Limited. The year 1997 marked another transformation as part of the Company's ongoing regional growth strategy. Hoechst AG, Germany, transferred its shareholding to one of its group companies, renaming the entity as Celanese Pakistan Limited. In 1999, Celanese Pakistan Limited underwent a strategic restructuring, divesting its chemical operations and transferring controlling shares to Knightsbridge Chemicals Limited (KCL). This phase also witnessed the remaining of the Company as “Nimir Chemicals Pakistan Limited”. Subsequently, in 2011, Knightsbridge Chemicals Limited divested its entire shareholding to the current management, resulting in the present state of the Company.

NCPL is a long-establihsed petrochemicals company in Pakistan. NCPL is the manufacturing and marketing of Phthalic Anhydride (PA), Di Octyl Phthalate (DOP), Maleic Anhydride (MA, a by-product of PA), and Alkyd Resins (AR). PA is a basic industry for further downstream industries like DOP, UPR, and Alkyd Resins which form major raw materials for buttons, GR pipes, Water tanks, paints, artificial leather, cable compound, hoses and pipes, PVC shoes, joggers, soccer balls and bags, etc. DOP (or Plasticizer) is used in Plasticizing Poly Vinyl Chloride (PVC), Binder in Paints, Pigmented and Unpigmented Lacquers, and for Grinding Pigments. It is highly compatible with PVC has an excellent plasticizing effect and also has the average characteristics of various other plasticizers. It is also used in artificial leather, plastic moldings, and cable compounds. MA acts as an ingredient in bonding agents used to manufacture plywood, a corrosion inhibitor, and a preservative in oils and fats. Primarily, MA is used in the manufacture of Unsaturated Polyester Resins (UPR) Alkyd Resins, Varnishes, Drying Oils, Agricultural Chemicals, and Fumaric Acid. It is also used in the production of Polyester Resins and Co-polymers, Dye Intermediate. While, Alkyds are used in paints and molds for casting. These are the leading resins or binders in most commercial “oil-based” coatings. Alkyds are still used in low-performance industrial coatings and interior paints. Raw material for PA (Ortho xylene) and DOP (2-EH) is imported from Sabic, KSA. The Company’s plant is located at 14.8 Km, Sheikhupura-Faisalabad Road, Mouza Bhikhi, Distt. Sheikhupura, Pakistan. NCPL maintains an installed annual capacity of 30,000 MT for PA, 1,000 MT for MA, 21,420 MT for DOP, and 9,840 MT for AR. The company’s operations are heavily reliant on imported feedstock, with Ortho-Xylene (for PA) and 2-Ethyl Hexanol (2-EH) (for DOP) sourced primarily from SABIC, Saudi Arabia. In CY24, NCPL operated at a utilization level of ~53%, reflecting the challenges of demand fluctuations and raw material dependency in the petrochemical sector.

The ownership of the Company resides with two brothers, Mr. Anjum Nisar (~57.50%) and Mr. Tariq Nisar (~42.50%).

The current ownership structure appears to be secure, with no imminent anticipation of significant changes in shareholding. The sponsoring family maintains full control, holding approximately 100% stake. Strengthening the stability further could be achieved through the establishment of a clearly defined shareholding distribution among family members, with a clear line of succession.

The sponsoring family (Nisar Family), is renowned for its strong business acumen, backed by extensive industry knowledge and experience. With long-established operational excellence in Pakistan, the group has expanded its presence into different ventures, including NCPL.

The Nisar Family, a prominent business group in Pakistan, maintains a strong financial profile supported by substantial access to diversified markets. The group’s significant investments are concentrated in three key entities: Pakistan Vinyl Industries, Nisar Spinning Mills, and Nimir Chemicals Pakistan Limited (NCPL), reflecting a well-established presence across multiple industrial segments. This diversified investment base underscores the Sponsors’ financial strength and reinforces their demonstrated ability to extend timely support to group companies, if and when required.

The board comprises four members, including Mr. Anjum Nisar - Chairman, Mr. Tariq Nisar - CEO, and two executive directors - Mr. Saqib Anjum and Mr. Mohsin Tariq. All the directors have been associated with the board for several years. Notably, there are no independent directors, leading to a board dominated by the sponsoring family. This raises concerns about the lack of independent oversight and challenges to management, which could impede effective governance.

The leadership of NCPL is anchored by seasoned professionals with extensive industry experience. Mr. Anjum Nisar, the Chairman, a well-recognized business leader, has represented Pakistan at various national and regional forums, serving as President of the Federation of Pakistan Chambers of Commerce & Industry (FPCCI) and Vice President of the SAARC Chamber of Commerce & Industry. Mr. Tariq Nisar, the Company’s CEO, brings over four decades of diversified experience in manufacturing and petrochemicals, alongside board positions in Nisar Spinning Mills (Pvt.) Ltd. and Pakistan Vinyl Industries. Mr. Mohsin Tariq, a director, holds academic credentials from Brunel University and SOAS, and concurrently serves as an Independent Director at Faysal Bank Limited, having previously been associated with Nimir Industrial Chemicals Limited. Mr. Saqib Anjum, who serves as Technical Director and Executive Board Member, has been associated with NCPL for more than 14 years, contributing to technical operations and R&D, and also holds an MBA from Cardiff University. Together, the leadership team combines strategic vision, technical expertise, and strong industry linkages to drive NCPL’s long-term growth.

There is, as such, no board committee. All the members also hold director positions in group companies, which inhibits the room for impartial oversight. Further, BoD meetings are conducted regularly, attendance seems adequate, and minutes are recorded properly, thus boding well for corporate governance.

M/s. BDO Ebrahim & Co., a QCR-rated firm not classified under ‘A’ category of the SBP auditors’ panel, serves as the external auditor for the Company. The auditors provided an unqualified audit opinion on the financial statements for the year ended December 31st, 2024, indicating their satisfaction with the Company’s financial reporting and adherence to accounting standards.

A well-defined organizational structure exists in the Company. The functions reporting to the CEO are as follows: 1) Finance, 2) Human Resources & Administration, 3) Marketing, and 4) Technical & Operations. In the second hierarchy, Managers of Accounts, Finance, SCM, SAP, IT, Tax & Payroll report to the CFO. Managers Admin & IR and HR Ops report directly to GM HR & Admin. Managers Marketing & Sales report to Director of Marketing. Similarly, GM Tech & Ops and its subordinate departments report to the Director of Technical. However, the functions in the third hierarchy of the organization are segregated into different departments. 

Mr. Tariq Nisar, the CEO, has been associated with the Company since its inception. He has the honor of winning “Businessman of the Year Gold Medal” for the years 2005, 2006, and 2011. He is actively and substantially contributing towards the stability of Pakistan in the areas of textile spinning, chemicals, and the petrochemical business segments. In NCPL, he is supported by a team of skilled individuals equipped with relevant industry exposure. 

With the support of an experienced team of professionals, NCPL is building up the business strengths and increasing its footprint across different cities of Pakistan. Functions of the management are clear and well-defined to effectively achieve its underlying goals and objectives. 

The Company is presently using SAP Business One ERP system with version 9.2 PL 08. The software was acquired by Abacus Consulting Lahore and is renewed every year. It has multiple operational modules to keep track of daily and monthly reports required by the management to ensure the level of effectiveness.

To ensure operational efficiency and appraisal of internal controls, the Company has formed a management committee which implements and monitors the policies and procedures of the Company. The Company has an effective mechanism for the identification, assessment, and reporting of all types of risk arising out of the business operations. Further, NCPL is equipped with the most advanced technological solutions to support its routine business activities proficiently. 

The domestic petrochemical sector in Pakistan remains structurally underdeveloped, with significant reliance on imports of both feedstock and finished chemicals. Demand is largely driven by downstream industries such as plastics, paints, resins, footwear, construction, packaging, and consumer goods, all of which are closely linked to overall industrial and economic activity. The sector is heavily reliant on imported raw materials (e.g., Ortho-Xylene and 2-Ethyl Hexanol), exposing producers to international commodity price swings, exchange rate volatility, and supply chain disruptions. The market for key petrochemicals such as Phthalic Anhydride (PA) and Di-Octyl Phthalate (DOP) is fragmented. While PA production is relatively consolidated, with only a few local players, the DOP market is competitive, with multiple manufacturers operating at varying scales. Consumption is sensitive to economic cycles, construction activity, and consumer demand for PVC-based goods (e.g., shoes, artificial leather, pipes, and household items). Intense competition, coupled with limited pricing power due to cheaper imports, constrains margins for local manufacturers. Despite challenges, steady demand from downstream PVC, footwear, paints, and construction industries provides a sustainable growth base. Government support for import substitution and industrial growth may also create long-term opportunities. 

NCPL is one of the most established players in Pakistan’s petrochemicals sector, with a diversified product base comprising PA, DOP, MA, AR, and other plasticides. Within the PA segment, NCPL is the largest local producer, with an installed capacity of ~30,000 MT per annum, compared to other players such as PACHEM Global (Pvt.) Limited (~35,000 MT capacity) and smaller producers. In DOP, the market is fragmented with numerous players; however, NCPL holds a significant presence with a capacity of ~21,420 MT per annum. Its product diversification (into MA and AR) provides some competitive advantage versus niche players focusing solely on PA or DOP. Despite its established market position, competition from imports and regional producers (particularly from China and the Middle East) continues to weigh on NCPL’s margins and market share. In CY24, NCPL operated at a capacity utilization of ~53%. Overall, NCPL holds a leading domestic position in PA production and a notable presence in DOP, while maintaining diversification into downstream resins. However, profitability and growth remain sensitive to external factors such as feedstock availability, pricing pressures, and import competition. 

Primarily, the Company derives its major revenues from the manufacturing and sale of Di-Octyl Phthalate (~63%) and Phthalic Anhydride (~25%), followed by Alkyd Resins (~9%), and other Plasticizers (~2.4%). During CY24, NCPL reported revenues of ~PKR 12,453mln (CY23: ~PKR 12,389mln; CY22: ~PKR 9,866mln), reflecting marginal year-on-year growth of 0.5%. However, performance weakened in 1HCY25, with revenues declining to ~PKR 4,121mln, down 33.8% YoY. The deterioration was primarily attributable to (i) a reduction in selling prices of key products in line with international market trends, and (ii) lower sales volumes owing to temporary plant shutdowns for repair and maintenance.

In CY24, the Company’s profitability metrics came under considerable pressure. Gross margin declined sharply to ~9.2% (CY23: ~21.4%; CY22: ~12.2%) due to reduced sales volumes and lower average selling prices. Operating margin contracted to ~4.0% (CY23: ~17.5%; CY22: ~8.7%), while net profit margin also fell to ~3.0% (CY23: ~7.5%; CY22: ~0.3%). The deterioration continued in 1HCY25, with margins compressing further and the Company posting a net loss of ~PKR 219mln (CY24: profit of ~PKR 368mln; CY23: profit of ~PKR 928mln). The negative bottom-line primarily reflected elevated cost pressures across all levels of operations.

The sustainability of NCPL’s business remains constrained by its high revenue concentration in a few core products (primarily DOP and PA), which exposes earnings to volatility in international petrochemical prices and cyclical demand patterns. The significant erosion in margins over CY24 and the reported net loss in 1HCY25 underscore the Company’s vulnerability to fluctuations in global crude-linked feedstock costs, currency pressures, and operational disruptions. While management initiatives, such as plant efficiency improvements and sales channel diversification, are expected to support gradual recovery, the Company’s ability to record profitability will hinge on its resilience to commodity price cycles, restoration of sales volumes, and effective cost management. Over the medium term, growth prospects from downstream demand in construction, paints, and PVC-related sectors provide some support; however, the overall business profile remains sensitive to external shocks and execution risks.

NCPL’s working capital requirements primarily arise from the financing of inventories and trade receivables, which are funded through a mix of internal cash generation and short-term borrowings. The Company’s gross working capital cycle stood at ~155 days in CY24 (CY23: ~160 days; CY22: ~142 days). Inventory days remained broadly stable at ~102 days in CY24 (CY23: ~113 days; CY22: ~95 days). Consequently, the net working capital cycle stood at ~141 days in CY24, significantly higher than ~127 days in CY23 and ~74 days in CY22. In 1HCY25, the Company’s working capital cycle stretched further, with gross and net cycles increasing to ~187 days and ~180 days, respectively. The elongation reflects higher inventory holding and slower receivable turnover, amplifying reliance on short-term funding.

NCPL’s cash flow generation weakened in CY24, with free cash flow from operations (FCFO) declining to PKR 499mln (CY23: PKR 1,404mln; CY22: PKR 203mln), primarily due to lower profitability. In 1HCY25, FCFO turned negative at PKR 429mln, reflecting operating losses. Interest coverage deteriorated materially, falling to 3.0x in CY24 (CY23: 9.3x; CY22: 1.1x), while core debt coverage also contracted to 2.8x (CY23: 8.6x; CY22: 1.0x). The pressure intensified in 1HCY25, when both interest coverage and core debt coverage turned negative (-5.7x and -5.3x, respectively) due to a loss recorded in the period. Making recovery in earnings will remain critical for maintaining adequate debt-servicing capacity.

The Company’s leverage ratio increased to ~50.8% in CY24, compared to ~39.0% in CY23 and ~53.2% in CY22. The year-on-year rise in leverage was primarily driven by an increase in total borrowings, which rose to PKR 2,613mln in CY24 (CY23: PKR 2,194mln; CY22: PKR 3,085mln). NCPL’s debt structure continues to consist entirely of short-term borrowings from commercial banks, mainly utilized to meet working capital needs. In 1HCY25, the leverage ratio further escalated to ~60.4%, reflecting a continued uptick in short-term borrowings amid subdued operating cash flows.