Bulleh Shah Packaging (Private) Limited ("BSP" or the "Company") was incorporated as a private limited company on September 16, 2005 under the Companies Act,2017. The Company's primary object is to carry on the business of manufacture and sale of paper & board of all kinds and corrugated boxes.

The Company was established in a new green project incorporated as a separate entity under the name of Bulleh Shah Paper Mills (BSPM). In September 2012, joint venture between Stora Enso (35%) and Packages Limited (65%) was established and the name has been changed to Bulleh Shah Packaging (Pvt.) Ltd. Lately, in 2017 Stora Enso took an exit making the Company wholly owned by Packages Limited.

Bulleh Shah Packaging (Private) Limited is engaged in the manufacturing and sale of Corrugated boxes, Paper, board and Other products of paper. The installed capacity of paper & board is 360,000 MT per annum, while that of the corrugated box is 130,000 MT per annum.

Bulleh Shah Packaging (Pvt.) Limited is 100% owned subsidiary of Packages Limited.

Packages Limited is the flagship investment holding company of the Ali Group which has a history spanning over a period of more than 65 years. Packages'© investment book comprises entities engaged in the manufacturing and sale of inks, flexible packaging material, paper, board, and corrugated boxes, biaxially oriented polypropylene film and cast polypropylene film, production and sale of ground calcium carbonate products, entities engaged in insurance, power generation, real estate segment of the economy and recently diversifying into manufacturing of corn-based starch.

The Group is ranked amongst the leading industrial groups of the country with interests in paper and packaging, financial institutions, and education. Packages Limited has significant successful joint ventures with international conglomerates and long standing relationship with various multinational companies.

Packages has a consolidated asset base of ~ PKR 264.6bln supported by ~ PKR 82bln of equity at the end of Jun'25.

The Company has an eight-member board comprising one independent director, six non-executive directors and one executive director (including the CEO). The Board is chaired by Mr. Syed Hyder Ali. Apt Board size and presence of independent oversight supplement good governance framework.

The BoD, with a well-diversified background and relative expertise of its members, is a key source of oversight and guidance for the management. The Chairman of the Board Mr. Syed Hyder Ali is a seasoned business professional and carries a track record of successful business ventures with him. All other members are professionally qualified with extensive experience and a diversified skill mix.

The Board held several meetings throughout CY24, with the majority of attendance to discuss pertinent matters. The minutes of the meetings are documented properly. To ensure effective governance, the Board has formed three committees, namely, (i) Audit Committee, (ii) Executive Committee, and (iii) Human Resource and Remuneration Committee. Both committees are chaired by non-executive directors.

M/s A.F. Ferguson & Co. is the external auditor of the Company. They gave an unqualified opinion on the Company’s financial statements for the year ended Dec 31, 2024. The board has also established an internal audit department.

The Company has established a well-defined management structure divided into functional departments with clear lines of responsibilities.

Mr. Nasir Zaman has been appointed as the Chief Executive Officer (CEO) of the Company following the departure of his predecessor, Mr. Asghar Abbas. Mr. Bilal Naeem, the CFO, is a Chartered accountant and has more than 10 years of experience. He has a strong background in accounting and finance within Packages Group, having previously served from 2013 to 2019 in the Comptroller of Accounts and Business Controller position. Mr. Syed Ali Murtaza Bukhari serves as the Business Unit Head of Corrugated Business. He joined Packages in 2003 as a Production Engineer and has been associated with the Group for 20 years. He is a Mechanical Engineer from UET with an MBA from Nanyang Technological University, Singapore. Mr Amir Janjua heads the Paper and Board Division who has previously held Group Head Supply Chain position at Packages Group and has also served as Business Unit Head of Corrugated Division.

The experience of the sponsors along with a professional management team has helped the Company to streamline their operations and cut down on their costs. The production facilities have minimal wastage which is effectively managed through re-cycling and re-using in the process 250 tons of paper per day.

To generate MIS and operational reports, ERP software, SAP S4 Hana is used.

To ensure operational efficiency, the Internal Audit Function is in place that identifies and reports risks. The audit committee reviews the internal audit department reports and planned activities.

The paper and paperboard industry coupled with packaging industry in Pakistan remains an essential segment of the manufacturing and industrial value chain, supplying core materials to downstream sectors including fast moving consumer goods (FMCG), pharmaceuticals, e-commerce logistics, textiles, and export packaging. Sector performance has historically followed a cyclical trajectory, heavily influenced by macroeconomic indicators, import dependency, and raw material cost volatility. From FY19 to FY21, the industry maintained relatively stable production volumes, largely supported by a shift toward recyclable and sustainable packaging. The FY23 proved to be a difficult year for the industry, with inflationary pressures, fluctuations in raw material costs, and continued competition from imports contributing to a decline in demand across key segments. The sector also remains structurally dependent on imported wood pulp for a significant portion of its raw material requirements. In FY23, raw material cost inflation ranged from 30 to 35 percent, driven by global supply disruptions, elevated shipping rates, and sharp currency depreciation. This input cost pressure translated into margin compression for both integrated and converting units, particularly those with limited pricing power. In response to macroeconomic conditions, the State Bank of Pakistan reduced the policy rate from 22% in July 2024 to 11% by May 2025, easing interest burdens on manufacturers. However, elevated costs persist, with industrial electricity tariffs rising to PKR 48.7 per kWh in Q1 2025 and freight costs remaining 15-20% above pre-COVID levels due to port congestion and fuel prices volatility. (Source: PACRA Sector Study)

The Company’s market share in the overall industry (Paper & Board) is almost ~12%. Liquid packing board (falls under the purview of paper & Board) - the Company is the sole manufacturer in this segment, and Corrugated board – BSP is the major supplier and holds 14% market share.

The Company derives its revenue from the sale of Paper & Board and Corrugated Board in both the local market and through exports. During 6MCY25, the Company’s top line inclined by ~9% to PKR 32.7bln (6MCY24: PKR 30.4bln). Finance cost reduced to PKR 2,995mln (6MCY24: PKR 4,321mln). In 6MCY25, the Company recorded a net loss of PKR 1,699mln (6MCY24: PKR 1,006mln), primarily due to an 11% increase in the cost of goods sold, which amounted to PKR 30bln (6MCY24: PKR 27bln). Distribution and marketing expenses declined by 4% and stood at PKR 621mln (6MCY24: PKR 649mln), while administrative expenses increased by nearly 4% and were reported at PKR 456mln (6MCY24: PKR 440mln).

The escalation in raw material costs coupled with persistent inflationary pressures resulted in a decline in gross and operating margins. The GP margin contracted to ~7.6% in 6MCY25 from ~10.4% in 6MCY24. Similarly, the OP margin dropped to ~3.4% in 6MCY25 compared to ~6.8% in 6MCY24. Consequently, the net profit margin further declined to ~-5.2% in 6MCY25 from ~-3.3% in 6MCY24, ultimately leading to the reported net loss during the period.

The Company enjoys a strong and well-recognized brand name in the market, particularly in consumer products. To further strengthen its market position, BSP has recently undertaken BMR initiatives aimed at enhancing the production capacity of both the paper and board division as well as the corrugator division. Given the elevated leverage arising from substantial short-term and long-term borrowings utilized to finance working capital requirements and ongoing operations, management is actively implementing measures to restore profitability and has devised a three-year strategic plan. In line with this, the Board of Directors approved a capital injection of PKR 8bln into BSP through a combination of ordinary share capital, subordinated debt, and potential conversion of existing loans into equity, with the objective of optimizing the Company’s capital structure. Out of this, PKR 4bln has already been received as of June 30, 2025.

BSP’s working capital requirements are primarily financed through a short-term running finance facility secured from a consortium of banks. In light of the raw material lead time and lower product demand during 6MCY25, the Company’s inventory days stood at ~99 days (6MCY24: ~116 days). Trade receivable days increased to ~42 days (6MCY24: 34 days), while trade payable days also rose to ~61 days (6MCY24: 42 days). Consequently, the average net working capital days were reported at ~79 days in 6MCY25 compared to 109 days in 6MCY24.

In 6MCY25, the Company’s FCFOs declined to PKR 2,528mln (6MCY24: PKR 4,307mln). The FCFO-to-finance cost coverage ratio remained almost stable at ~1.1x in 6MCY25 (6MCY24: 1.0x), owing to the reduction in finance cost.

The Company maintains a highly leveraged capital structure, with long-term debt primarily utilized for expansion projects and short-term debt supporting working capital requirements. The planned CAPEX is expected to be financed through a combination of debt and equity. As of 6MCY25, long-term borrowings increased to ~PKR 25,250mln (6MCY24: PKR 15,511mln), while fixed assets stood at ~PKR 37,844mln (6MCY24: PKR 36,693mln). In addition, short-term borrowings rose to ~PKR 24,201mln (6MCY24: PKR 22,799mln). Consequently, the Company’s total borrowings reached ~PKR 54,051mln at the end of 6MCY25 (6MCY24: PKR 41,231mln).