Nimir Chemicals 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-established 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, Unsaturated Polyester Resins (UPR), and AR 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 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 (i.e., Ortho xylene) and DOP (i.e., 2-Ethyl Hexanol) 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 OX (for PA) and 2-EH (for DOP) sourced primarily from SABIC, Saudi Arabia. In CY25, the overall capacity utilization declined to ~48.5% in CY25 (CY24: ~53.1%), reflecting the challenges of raw material procurement due to a conflict in the regions and demand fluctuations in the petrochemical sector. By product, PA utilization fell to ~43.3% (CY24: ~48.4%) and DOP to ~68.2% (CY24: ~72.7%), while MA utilization improved slightly to ~29.1% (CY24: ~27.9%); AR utilization declined further to ~23.3% (CY24: ~27.2%).

The ownership of the Company continues to reside with two brothers: Mr. Anjum Nisar (~57.05%) and Mr. Tariq Nisar (~42.50%), together representing ~99.55% of paid-up capital; the balance is held by minor/nominee shareholders. No change in the shareholding occurred during the review period.

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 formal and 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 now comprises five members, including Mr. Anjum Nisar - Chairman, Mr. Tariq Nisar - CEO, and three executive directors - Mr. Saqib Anjum, Mr. Mohsin Tariq, and Mr. Muhammad Zafar Iqbal. Majority of 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. Lastly, Mr. Muhammad Zafar Iqbal, the newest director, is stated to carry 36+ years of general business experience. 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 is adequate, and minutes are recorded properly.

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, 2025, 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. Mr. Muhammad Maqsood Khan continues as Company Secretary & Senior Manager-I, Accounts (with the Company since 2004, in this role since 2021). Few changes were noted in the senior team since the last review: Mr. Maqbool Ashiq Humayon joined as Senior Manager-I, Administration and Mr. Naveed Ashraf joined as Manager-I, Finance & Deputy Company Secretary. Lastly, the position of the CFO is still vacant as of today; however, the management is hopeful to fill this position soon.

With the support of an experienced team of professionals, NCPL is building up the business strengths and increasing its foot print across different cities of Pakistan, though CY25’s plant shutdown and margin compression tested operational effectiveness; the 6MCY26 recovery in margins and profitability suggests some restoration of operating discipline. Functions of the management are clear 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.

Chemicals form part of Pakistan’s Industrial Activities segment, accounting for ~2.6% of QIM in FY25. Sector output remains volatile: while overall LSM grew 5.0% in FY26, the chemicals sub-sector contracted ~2.5%, following a ~20% decline in FY25, and detracted ~0.2pp from headline LSM growth. The sector remains structurally important given its linkages with textiles, leather, footwear, furniture, automotive and food/beverage industries, but is heavily import-dependent, with FY25 chemical imports of ~PKR 1,522bn (~7.6% of the national import bill) versus exports of ~PKR 76.9bn. Within this sector, PA, DOP, MA, and AR form an interconnected petrochemical chain serving paints, coatings, PVC compounding, cables and artificial leather. The chain remains exposed to global oil prices through imported, crude-linked feedstocks, particularly OX for PA and 2-EH for DOP. The domestic PA market is served by two local producers and imports, with demand estimated at ~35,749 MT, while DOP is predominantly locally supplied, with implied demand of ~46,127 MT and import penetration below 2%. MA remains predominantly import-supplied and is generated as a PA by-product, while AR demand is closely linked to the paints and coatings cycle and, hence, construction activity. Trade protection has generally eased for Jul’25–Jun’27, with PA duty reduced to 10% from 11%+2% and DOP/AR duties to 20%+4% from 20%+6%, narrowing the pricing cushion for domestic producers. Existing anti-dumping duties on PA imports from China, Chinese Taipei, Russia and South Korea provide some offset, although the NTC’s Sunset Review initiated in May 2026 remains a key monitorable. Separately, provisional anti-dumping duties of 17.70%–37.30% on PVC resin imports from the US and Indonesia could raise input costs for PVC compounders, with potential implications for downstream DOP demand. Feedstock volatility has remained elevated in 2026, with Brent crude rising from ~$81/bbl in 1Q26 to nearly $138/bbl in April before easing toward ~$85/bbl by 3Q26 and projected at ~$69/bbl in 2027. While the expected moderation could provide some cost relief, the outlook remains sensitive to geopolitical developments. Against this, demand conditions are moderately supportive, with cement dispatches rising 7.6% in FY26 and projected to grow a further 7–8% in FY27, supporting paint- and coatings-related demand for PA and AR, while DOP demand remains more exposed to developments in PVC and cable-related industries.

NCPL’s competitive position varies across its four product lines. In PA, its market share declined to 45.42% in CY25 (CY24: 53.86%; CY23: 56.85%) following the entry of PAChem Global, with imports accounting for a further 24.70%. Capacity utilization correspondingly moderated to 43.3% in CY25 (CY24: 48.4%) on competitive pressure and subdued downstream demand. DOP remains NCPL’s largest and more defensible franchise, contributing ~63% of CY25 revenue, with a 30.74% market share (CY24: 32.57%) and 68.2% capacity utilization (CY24: 72.7%). Reliance on SABIC for 2-Ethyl Hexanol exposes the segment to feedstock and supply volatility; in 2026, repricing following regional disruptions led to a ~2-month production shortfall. The sponsor group’s new synthetic-leather facility is expected to provide a captive DOP/PVC offtake channel once operational. MA and AR remain smaller contributors at ~1% and ~9% of CY25 revenue, respectively, but continue to face share erosion. MA share declined to 4.36% (CY24: 8.76%), despite NCPL remaining the sole domestic producer, while AR share fell to 7.15% (CY24: 9.68%), with utilization declining to 23.3% (CY24: 27.2%) against installed capacity of 9,840 MTPA.

Primarily, the Company derives its major revenues from the manufacturing and sale of DOP (~62.78%) and PA (~24.38%), followed by AR (~9.06%), VR-I & II (~1.57%), DBP (~1.17%), MA (~0.72%), DOA (~0.24%), and Plasticizer (~0.02%). During CY25, the Company’s topline declined considerably to ~PKR 9,125mln (CY24: ~PKR 12,453mln, CY23: ~PKR 12,389mln), registering a decline of ~26.7% YoY, mainly on account of lower sales volumes amid subdued demand from downstream industries. In 1HCY26, the Company recorded a revenue of ~PKR 3,718mln, registering a decline of ~9.8% YoY (1HCY25: ~PKR 4,121mln), reflecting a moderation in the pace of decline compared to the prior corresponding period.

During CY25, the Company’s gross margin further declined to ~5.3% compared to ~9.2% in CY24 (CY23: ~21.4%) on the back of a significant decrease in sales volumes coupled with subdued pricing. Operating margin turned negative at (0.7%) in CY25 (CY24: ~4.2%, CY23: ~17.5%). Resultantly, the Company’s net profit margin also declined to (0.9%) in CY25 from ~3.0% in CY24 (CY23: ~7.5%), with the Company posting a net loss of ~PKR 84mln in CY25 (CY24: net profit of ~PKR 368mln, CY23: ~PKR 928mln). However, the Company returned to profitability in 1HCY26, posting a net profit of ~PKR 141mln (1HCY25: net loss of ~PKR 219mln), with gross, operating, and net margins improving to ~13.9%, ~5.9%, and ~3.8%, respectively.

NCPL’s return to profitability in 1HCY26 versus a net loss in CY25, was driven primarily by moderation in raw-material costs rather than structural improvements in demand or pricing power. Sustainability of the recovery will depend on the crude-oil trajectory, with Brent easing from ~$138/bbl in April 2026 to ~$85/bbl in 3Q26 and projected at ~$69/bbl in 2027, which could support further margin normalization. However, renewed feedstock volatility remains a key risk given the limited ability to fully pass through cost increases. The operating environment remains challenging, particularly for PA and DOP, following lower customs duties for Jul’25–Jun’27 and increased competition in PA from local players. The pending NTC Sunset Review of PA anti-dumping duties remains a key monitorable, while DOP demand faces a mixed outlook following provisional duties on PVC resin imports. Demand conditions provide some offset, with cement dispatches rising 7.6% in FY26 and projected to grow 7–8% in FY27, supporting coatings-related demand. Downstream integration could provide a longer-term mitigant through the sponsor group’s planned synthetic-leather facility and broader new entity initiative, potentially restoring captive PA/DOP offtake. However, commissioning, funding and the resolution of the outstanding commercial advance from ATS Synthetics remain key execution considerations, limiting visibility on the extent and timing of this support.

NCPL’s working capital cycle lengthened materially through CY25 and remained stretched into 1HCY26, reflecting the lag between rising landed feedstock costs and realizable local pricing rather than a durable shift in the underlying business model. Gross working capital days rose to 175 in CY25 (CY24: 155; CY23: 160) and extended further to 211 days as at Jun'26, the highest point in the four-period series, driven by an inventory build across both raw material (66 days in CY24 to 82 days in 6MCY26) and finished goods (36 days in CY24 to 74 days in 6MCY26), consistent with the Company carrying costlier feedstock and slower-moving stock through the DOP supply disruption. Net working capital days, which net against NCPL’s substantial customer-advance and payables base, moved more modestly, 122 days in CY25 (CY24: 127) before rising to 138 days at Jun'26, indicating that the advance-funding structure has continued to absorb a meaningful share of the cycle’s elongation. Trade receivable days rose to 65 in CY25 from 53 in CY24 before easing to 56 days at Jun'26, a sign of tightening collections discipline following the loss-making year. The current ratio has drifted down to 1.2x at Jun'26 (CY25/CY24: 1.3x; CY23: 1.7x), a modest but persistent erosion in the short-term liquidity cushion that would be expected to stabilize rather than continue trending toward parity. NCPL’s customer-advance base (PKR 3,458mln at Jun’26, broadly flat since CY23), predominantly sourced from related party ATS Synthetics. These advances are fully deployed toward inventory procurement rather than held as idle cash. While supportive of working-capital funding, the related-party concentration introduces an element of counterparty risk, tempering the credit benefit that would otherwise accrue from the advances as a liquidity buffer.

Debt-service coverage deteriorated sharply in CY25 as operating performance turned negative: EBITDA/Finance Cost fell to 1.0x (CY24: 6.2x; CY23: 14.5x) and FCFO/Finance Cost turned negative at (2.0x) (CY24: 3.0x; CY23: 9.3x), with FCFO itself swinging to ~PKR (323) mln from ~PKR 499mln the prior year. Coverage has rebounded materially in 1HCY26 in tandem with the return to profitability, EBITDA/Finance Cost at 4.7x and FCFO/Finance Cost at 2.4x, with FCFO turning positive at ~PKR 213mln, but both metrics remain below the CY23–CY24 run-rate. This recovery is viewed as encouraging in direction but not yet demonstrated in durability: it has been driven substantially by the moderation of feedstock-cost pressure (OX/2-EH pricing normalizing off the early-2026 spike) rather than by a structural widening of NCPL’s operating margin, and a renewed feedstock shock would quickly compress coverage again given the Company’s limited ability to pass through cost spikes to end-market pricing on a timely basis. Liquid cover has held up comparatively well through the downturn, 25.3x at Jun’26 (CY25: 25.0x; CY24: 23.8x; CY23: 48.2x), supported by ample unutilized short-term borrowing capacity (~38.4% utilization of PKR 4,685mln in limits at Jun’26).

Leverage rose to ~49.9% in CY25 from ~39.0% in both CY24 and CY23, as short-term borrowings increased to ~PKR 2,263mln (CY24: ~PKR 1,617mln) to bridge the working-capital and cash-flow impact of the loss-making year. It has since eased to ~42.7% at Jun’26 as borrowings were pared to ~PKR 1,797mln and equity partially rebuilt through 1HCY26 retained earnings (PKR 2,409mln vs. PKR 2,268mln at CY25-end). The debt stack remains entirely short-term (100% at both CY25-end and Jun’26; CY23: ~98.6%), consistent with a working-capital-funding model. On balance, the capital structure is viewed as moderately leveraged with adequate near-term flexibility, but the CY25 leverage build occurring in the same year that coverage weakened sharply is a reminder of how quickly the structure can tighten under a single adverse operating year, a relevant sensitivity as the Company looks to sustain its 1HCY26 recovery through FY27.