PACRA Maintains Entity Ratings of Nimir Chemicals Pakistan Limited

Nimir Chemicals Pakistan Limited (‘NCPL’ or ‘the Company’) is primarily engaged in the manufacturing & marketing of Phthalic Anhydride (PA), Di-Octyl Phthalate (DOP), followed by Alkyd Resins (AR), Maleic Anhydride (MA), and other plasticizers to feed the demand of downstream sectors. The ratings reflect NCPL’s long-established history and prominent position in the domestic petrochemicals industry (specifically in DOP and PA). The sector is considered a backbone in the development of forward-linked industries (including leather, paint, textile, footwear, sports goods, plastic & PVC). The operating environment remains challenging, given Pakistan’s dependence on imported oil, gas, coal, and allied products. Elevated global energy prices, combined with persistent currency devaluation, continue to exert pressure on input costs. In particular, volatility in international crude oil prices creates significant cost-side risks, albeit partially mitigated by producers’ ability to pass on price increases. These factors, however, have weighed on consumer purchasing power, sales volumes, and industry-wide profitability. Besides, expected growth in the construction & coating/paint industry and demand for PVC products will have positive sales impact on Plasticizers (DOP), PA, and AR in long run. The Company’s revenue streams are primarily driven by DOP and PA, followed by AR and MA. NCPL’s revenue base is concentrated in DOP and PA, followed by AR and MA. During 1HCY25, the Company’s topline contracted by ~33.8% year-over-year, with margin erosion across all levels. The decline was driven by (i) reduced selling prices of key products in line with lower international prices and (ii) temporary plant shutdowns for repair and maintenance. Going forward, the management expects operating performance to benefit from efficiency gains following the replacement of plant catalysts and improvements in sales channeling. The financial risk profile of the Company is demonstrated by stretched working capital management, weak coverages, and cashflows. Capital structure of the Company is highly-leveraged, majorly comprising short-term borrowings to meet working capital needs.
The ratings are dependent on the firm’s ability to sustain its market position in the face of challenging industry dynamics along with topline growth. NCPL’s ability to deliver on its shared projections, sustain margins, and navigate volatility in global commodity prices will remain critical to uphold the ratings.

About the Entity
Nimir Chemicals Pakistan Limited, acquired in 2011 from Knightsbridge Chemicals Limited, London. The present management gained entire stake of NCPL through family members as an intended backward integration strategy. It is involved in the production of petrochemical intermediate products, having two prime products, Di-Octyl Phthalate with installed capacity of ~21,400 MT/p.a. and Phthalic Anhydride with installed capacity of ~30,000 MT/p.a. Currently, the ownership stays with Mr. Anjum Nisar (~57.50%) and Mr. Tariq Nisar (~42.50%). The board comprises four members; Mr. Anjum Nisar chairs the board whilst Mr. Tariq Nisar serves as the CEO of the Company.