PACRA Maintains Entity Ratings of Ghani Chemical Industries Limited

The ratings incorporate the strong business profile of Ghani Chemical Industries Limited (GCIL or "the Company"), underpinned by its leading market share of ~34% in the manufacturing and sale of medical and industrial gases, including Oxygen, Nitrogen, and Argon in both liquid and compressed forms. In addition to its core gases business, GCIL is also engaged in import and sale of Calcium Carbide, a chemical primarily used in the food ripening process and as a critical raw material in various chemical manufacturing industries. Chemical segment contributes around 15% to the Company’s total revenue and to enhance operational focus and align with its strategic objective of import substitution, GCIL has recently carved out its Calcium Carbide business into a newly established entity, Ghani ChemWorld Limited (GCWL), which is now listed on the Pakistan Stock Exchange (PSX). As part of this corporate restructuring, all assets and liabilities associated with the Calcium Carbide segment have been transferred from GCIL to GCWL. The demerger process, including all regulatory and legal formalities, has been completed. The newly formed GCWL will operate a dedicated local manufacturing facility with a planned production capacity of 75 tons per day (TPD), located in the Hattar Special Economic Zone. Currently, Ghani Chemical Industries Limited (GCIL) operates four production facilities (ASUs)—two located in Lahore and two at Port Qasim, Karachi—achieving an overall capacity utilization of ~67% as of IHFY25. In a significant expansion initiative, GCIL has launched Pakistan’s largest industrial and medical gases plant at the Hattar Special Economic Zone, with a production capacity of 275 TPD and presently in its trial run phase. Additionally, the Company is in the advanced stages of securing approvals to relocate one of its Lahore-based plants to Oman, aiming to cater to the rising demand from the medical sector in the region. The performance of the industrial and medical gases sector remains closely tied to the ongoing development of healthcare infrastructure and the revival of Large-Scale Manufacturing (LSM). With the recent stabilization of the exchange rate, a gradual decline in inflation, and easing policy rates, the sector is well-positioned to benefit from improving macroeconomic conditions. During 9MFY25, the Company recorded revenue of ~PKR 5.3bln, reflecting a year-on-year growth of around ~31%. This growth was primarily driven by an optimized pricing strategy, which contributed to margin improvement across all levels of operations. GCIL operates under the oversight of a strategic governing board and an experienced management team. The financial risk profile of the Company is considered good with comfortable coverages, cashflows, and working capital cycle. The Company's capital structure is leveraged, with borrowings consisting of long-term debt to support expansion and short-term debt for working capital management.
The ratings are dependent on the Company's ability to effectively utilize enhanced capacities. At the same time, management of financial risk, particularly debt coverages, remains important. Consistent growth in market share and improved margins would support ratings.

About the Entity
Ghani Chemical Industries Limited is a listed entity, incorporated in 2015. Pursuant to the Scheme of Arrangement for merger/amalgamation of G3 Technologies Ltd. with and into Ghani Chemical Industries Ltd., sanctioned by the Lahore High Court vide Order dated October 11, 2022, Pakistan Stock Exchange listed Ghani Chemical Industries Ltd., w.e.f. November 14, 2022. The Company is a subsidiary (~49.07%) of Ghani Global Holdings Limited which is owned majorly by the Ghani Family (~51.89%). The remaining shareholding lies in Ghani ChemWorld Ltd. ~12.27%, directors of the Company and the general public. Members of sponsoring family majorly represent Ghani Chemicals’ four-member board. Mr. Masroor Ahmad Khan is the Chairman of the board while Mr. Hafiz Farooq Ahmad holds the office of CEO. They are assisted by a management team with extensive experience and a diversified skillset.