PACRA Maintains Entity Ratings of M.Y. Bari Mills (Pvt.) Limited
The ratings of M.Y. Bari Mills (Pvt.) Limited (Bari Mills) reflect its improving business profile emanating from growth in revenues and profitability. Bari Mills is a family owned small scale private company operated by a seasoned business family of Karachi. The Company is primarily an export oriented, towel manufacturing concern. Bari Mills is in the process of expanding its manufacturing facilities which is proving key driver in increase in revenues. Further, currency devaluation has boded well for the Company. Whereas, towel and denim industry continues to surge forward on the back of Pakistan’s cotton which is more suitable for coarse counts yarn. The Company enjoys strong margins in line with its peers. On standalone basis, the Company’s concentration levels – both customer and geographical – are high with majority of company revenues (~62%) emanates from a single customer. However, the ratings comfort from the Bari group's overall customer base and recent diversification in customers. The Company has a leveraged capital structure, though coverages remain strong. Going forward, in absence of any further debt-driven expansion in the medium-term, financial profile is expected to further improve.
The ratings are dependent on sustaining growth in revenues and profitability. Sustaining margins and reducing customer concentration, while maintaining financial risk at low level is critical. Meanwhile, strengthening of governance framework for better oversight of strategic affairs is considered essential.
M.Y. Bari Mills (Pvt.) Limited (Bari Mills) was incorporated in 2012 as a private limited company. Primary business of the Company is to manufacture and export towels with a total installed capacity of 96 looms. Mr. Haroon Bari owns 20% of the share and the remaining is owned by his five sons, 16% each.
There are total five board members with Mr. Haroon Bari as Chairman who brings 45 years of experience on Board. Whereas, the CEO of the Company is Mr. Nabeel Haroon Bari, who is a graduate from UK in the field of commerce and has an overall working experience of ~17 years with the group. There is no independent director on the board. The board has formed three committees, namely i) Board Audit Committee (BAC), ii) Human Resources and Remuneration Committee (HR&RC), and iii) Board Management Committee (BMC). All board members are part of the board since incorporation of the business as a private limited company.