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The Pakistan Credit Rating Agency Limited
Press Release

Date
29-Nov-21

Analyst
Rameel Amir
rameel.amir@pacra.com
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Upgrades Entity Ratings of Sayban International

Rating Type Entity
Current
(29-Nov-21)
Previous
(22-Dec-20)
Action Upgrade Maintain
Long Term BBB- BB+
Short Term A3 A3
Outlook Stable Positive
Rating Watch - -

Sayban International ("Sayban" or "the AOP") operates in four segments: i) Pesticides ii) Micro-Fertilizer, iii) Seeds and iv) Fertilizer and is one of the leading players in the first segment. It has laid the milestone of introducing ‘bio fertilizers’ in Pakistan. The AOP has sizeable turnover trendline over the years with noticeable growth of 30.1% for Jun-21 (CY20: 26.9%) since, the economic activities got revived after Covid-19 adverse implications. Reported revenues has contribution from each segment, while the prime contributor remains pesticide segment. Business profitability is optimistic while growing at consistent rate (6MCY21: PKR 213mln; CY20: PKR 416mln). Sayban has managed to mark its presence in the market through operational efficacy. The AOP retains its market share despite fragmentation in the crop protection industry and uncertainties at the economic and agricultural level. Therefore, demand for pesticides on overall basis remain steady. Historically, Sayban was a part of the Auriga Group, through restructuring and separation of business partners. Now, the AOP operates in the ambit of Sayban Group. The group has also set up other companies to expand its agricultural presence, one of which is a pesticides business - Comega Life Sciences (Pvt.) Ltd. Going forward, the Group plans to acquire Sayban International through a newly formed entity, Sayban Zarai Markaz (Pvt.) Ltd. Sayban meets its working capital requirements through a mix of internal cashflows and short term borrowings. The financial risk profile remains comfortable owing to continuously decreasing leveraged capital structure (6MFY21: 26.7%; CY20: 35.3%) and strong coverages thereon. The assigned Positive Outlook captures the expected trajectory of Sayban in future wherein the top-line would grow and financial benefits would accrue.
The ratings are dependent on sustained business and financial risk profile of the AOP. Meanwhile, improvement in governance practices to improve industry dynamics would be beneficial for the ratings.

About the Entity
Sayban International (under Sayban Group) was incorporated in 2005 as an AoP. Sayban started its operations in 2007 and has been working independently since 2015. Previously, the Group was owned by seven partners. Post restructuring, the AoP's shareholding constitutes three partners with Mr. Muhammad Azam Cheema and Mr. Shamsher Hussain holding 44.18% each. While, the remaining shareholding vests with Mr Muhammad Tariq.
Sayban does not have a formal BOD structure being an AoP. All the three partners are actively involved in the management. Mr. Muhammad Azam Cheema manages the AoP as its CEO. He possesses vast business acumen spanning over two and half decades. He is supported by a team of experienced professionals.

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.