PACRA Assigns Initial Entity Ratings to Fatima Packaging Limited

The assigned rating reflects Fatima Packaging Limited’s (FPL or “the Company”) prominent market position as a leading manufacturer of polypropylene-based packaging solutions in Pakistan. The Company operates as part of the well-established Fatima Group and maintains a close business association with its parent company, Fatima Fertilizer Company Limited (FFCL). This strategic alignment provides operational synergies, business continuity, and enhanced financial stability. FPL’s operates state of the art manufacturing plant which is capable to produce high quality range of packaging products, including woven polypropylene bags (WPP), coated block bottom cement bags, High Density Polyethylene (HDPE) Liner, Flexible Laminates and Poly Ethylene Film catering packaging needs of multiple industrial segments such as Fertilizer, Cement, Sugar, Rice, Wheat, Chemical, Seeds and Pesticides and etc. Furthermore, as a part of revenue diversification strategy the Company has also introduced Biaxially Oriented Polypropylene bags (BOPP) bags and Jumbo / Sling Bags, an advance value addition to traditional WPP bags which is also expected to further increase the export opportunities. The Company has established strategic partnerships with leading international raw material suppliers such as SABIC and TASNEE, giving the Company a competitive edge through preferred supply arrangements. The local packaging industry operates in a fragmented landscape and is highly dependent on imported polypropylene resin, making it sensitive to adverse exchange rate movements and global price trends. Rising energy costs and varying levels of automation and quality standards among manufacturers also influence the overall sector performance. Moreover, the demand side of this sector is closing linked with the agriculture output, construction activities, and fast-moving consumer goods (FMCG) consumption trends. Looking ahead, improvements in macroeconomic indicators such as exchange rate stabilization, a gradual reduction in policy and interest rates are expected to positively influenced the packaging sector. In CY24, the company recorded higher sales volumes; however, the downward trend in global raw material prices led to a corresponding reduction in selling prices, which in turn caused dilution of margins across all levels. As a subsidiary of Fatima Fertilizer Company Limited (FFCL), FPL also benefits from shared resources, strategic oversight, and a robust internal control environment established at the group level. The Company’s governance framework is anchored by an experienced Board of Directors and further strengthened by a competent and professional management team. This structure fosters accountability, operational efficiency, and sound decision-making. The financial risk profile of the Company is considered strong, characterized by comfortable debt coverage matrix, healthy cashflows and efficient working capital cycle. The capital structure is leveraged, mainly comprised of short-term borrowings for working capital requirements.
The ratings are dependent on the Company’s ability to maintain sustainable growth in revenues, while enhancing cost efficiencies and improving margins. Furthermore, adherence to debt and profitability matrix as depicted in shared financial projections shall remain imperative.

About the Entity
Fatima Packaging Limited was incorporated in April 2011. The Company operates as a joint venture between the Arif Habib Group and Fatima Group, with its manufacturing facility located in Sadiqabad, District Rahim Yar Khan. The Board comprises of four executive directors. Mr. Abbas Mukhtar is the Chief Executive Officer of the Company he also serves on the board of other Fatima Group companies and Mr. Muhammad Kashif Habib also serves on the Board, contributing strategically in commercial and financial matters.