The Pakistan Credit Rating Agency Limited
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Kanwal Ejaz

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PACRA Assigns Initial Ratings to Olympia Chemicals Limited

Rating Type Entity
(21-Jun-21 )
Action Initial
Long Term A-
Short Term A1
Outlook Stable
Rating Watch -

Olympia Chemicals Limited (the Company) ratings reflect reputable business profile and strong presence in manufacturing of Soda Ash light/dense (Sodium Carbonate) and Refined Sodium Bicarbonate which is used as raw material in different industries like soaps & detergents, textile, paper, glass, baking, beverages and tannery. The competition is duopoly, where product demand is high and the Company enjoys considerable market share with vigorous margins and profitability. Capacity expansions are underway and the Company is near to launch food grade Sodium Bi Carbonate which will provide a competitive advantage. The group has formidable business history, and rating takes comfort from well managed diversifications. The group’s portfolio contains investments in poultry sector & processed chicken, animal feeds, chemical manufacturing, edible oils extraction, agriculture crops, fruit orchards, carpets weaving, and textile products. Some of the renowned brands are “O! Food”, “BreeO Laundry Detergent” “Number 1 Detergent Powder”, “Areej Banaspati & Cooking Oil”, “Olympia Carpets” and etc. Operations are managed by a team of professionals, under supervision of sponsors. The board of the company is family oriented where sponsors are close family members and thus indicating a room for improvement. The Company is benefitting from sound systems of internal controls. Financial profile of the Company is considered strong with healthy coverages, upright working capital management and robust cashflows. Capital structure is low leveraged and borrowings are mainly comprising of long term to support BMR and capacity expansions. Going forward Company is expecting to increase its export sales to UAE, Qatar, Afghanistan, and Kuwait . The Company follows conservative debt policy, which is likely to continue in future as well also depicted in future financial projections.
The ratings are dependent on upheld sustainable profits and market share while retaining sufficient cash flows and coverages. However, adherence to maintain its debt metrics at an adequate level is a prerequisite

About the Entity
Olympia Chemicals Limited (the company) was incorporated in Pakistan as on January 01, 1995 as a public unlisted under the Companies Ordinance,1984 (now the Companies Act, 2017). The registered office of the company is situated at 25-A Davis Road, Lahore, Pakistan and manufacturing facilities located at Unit (I) Warcha Tehsil Quaidabad, District Khushab Warcha and (II) 45-KM Multan Road, Tehsil Pattoki, District Kasur.
The Company is owned by the Monnoo family and its shareholding is divided among the family of Mr. Hamayun Monnoo (42%) , Muhammad Shakil Monnoo and his family (19%) and Muhammad Khurshid Monnoo and his family (20%) and Muhammad Nasir Monnoo (19%). Muhammad Shakil Monnoo is the CEO of the Company.

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.