PACRA Maintains The Rating of MACPAC Films Limited

The ratings reflect MACPAC Films Limited's ("MACPAC" or the "Company") strong position in the Biaxially Oriented Polypropylene (BOPP) segment. MACPAC’s success is driven by a focus on customer relationships, robust corporate governance, ethical business practices, employee commitment, and alignment with the broader ESG agenda.
During FY24, the country's manufacturing industry grappled with high energy costs and heightened inflation, which increased the cost of sales and impacted gross profit margins. MACPAC was not immune to these challenges. Despite economic headwinds, MACPAC preserved its market share by prioritizing quality and customer retention, ensuring stability. The sales strategy emphasizes optimizing the domestic sales mix while exploring export opportunities.
The Company's production volumes experienced a marginal 1.3% decline during FY24. Product utilization of the Company is mainly linked with foods and consumer products. However, the Company maintained an 80% capacity utilization rate in FY24. During FY24, MACPAC's topline grew slightly by 2%, reaching PKR 5.6bln (FY23: PKR 5.5bln; 3MFY25: PKR 1.4bln). However, gross profit margins declined by 29% to 16.5% from 23.8%, primarily due to heightened energy costs. Net profitability stood at PKR 257mln (FY23: PKR 379mln; 3MFY25: PKR 7mln). To mitigate profitability challenges, the Company is transitioning to solar energy and focusing on cost-effective products in the BOPP market. To manage exchange rate risks from imported raw materials, the Company has built sufficient inventory to meet customer demand efficiently and cost-effectively. MACPAC maintained a healthy leveraging of 15.9% as of June 2024 (June 2023: 13.6%; 3MFY25: 15.7%), supported by efficient working capital management through advance terms with debtors and renegotiated terms with suppliers. Equity was reported at PKR 2.1bln (FY23: PKR 1.8bln). Additionally, MACPAC partnered with The Green Ark Sustainability (Pvt.) Limited (TGA) to further its ESG initiatives by offering recycling solutions for post-industrial and post-consumer plastic waste.
The ratings are dependent upon the Company’s ability to sustain its healthy business profile amidst strong competition, while, effective and prudent management of financial risk indicators remains important. Moreover, upholding of governance framework is vital.

About the Entity
MACPAC Films Limited, incorporated as a Public Limited Company in 1993, is listed on the Pakistan Stock Exchange. The Company specializes in producing various grades of BOPP film with an installed capacity of 15,000 MT annually and multi-layered CPP film variants with a capacity of 7,000 MT annually. Ownership is primarily held by the Elahi family (~47.65%), with major stakes distributed as follows: Mr. Shariq Maqbool Elahi (~15.45%), Mr. Habib Maqbool Elahi (~15.45%), and Mr. Ehtesham Maqbool Elahi (~16.60%). The Munshi family owns 15.35%, while the remainder is held by Employees Old Age Benefit Institution (EOBI), financial institutions, and the general public, with a free float of approximately 35%.