The Pakistan Credit Rating Agency Limited
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Raniya Tanawar

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PACRA Upgrades Rating of K.K. Rice Mills (Pvt.) Limited

Rating Type Entity
Action Upgrade Maintain
Long Term BB+ BB
Short Term A3 B
Outlook Stable Stable
Rating Watch - -

The ratings capture the fresh injection of PKR ~ 175mln in the company as subordinated loan. The sponsor have expressed undertaking to keep the amount as such or convert it into paid-up capital. The ratings incorporate the improving market positioning of the company, also reflected from the recent reported numbers. In line with the industry, KK Rice Mills also benefited from the improved performance of country’s rice segment attributed by ban of Indian Rice that eventually helped rice players improve their margins. KK Rice Mills has adopted a top-line centric approach targeting Middle East and the African region. The company is going through business expansion and the management expects to generate the maximum fruit of the expansion. Henceforth, another expansion comes into play as Company’s new plant is expected to be operational by March’19. Timely promotion of the product at the right price is essential. Compared to establish corporate, the board oversight and control environment are desirous of further improvement.

The ratings are dependent upon the maintained business volume and profitability. Adherence to sound financial discipline while debt servicing capacity through cash position is vital for the ratings

About the Entity
KK Rice Mills (pvt) Ltd, incorporated in June 2009, is a privately owned family business. The company obtained the exporter’s license in September 2009 from Rice Exporters Association of Pakistan(REAP). The board of KK Rice Mills (pvt) Ltd comprises of three member including the CEO of the company.
The CEO of the company, Mr. Chela Ram, is the man at the last mile, holding majority shares in the company. He is an experienced entrepreneur with over 2 decades of experience in rice business. Mr. Ram has also served as the Vice Chairman Rice Exporter Association of Pakistan and Chairman of Pakistan Hindu Council. His family has been in the commodity trading since three generations

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.