PACRA Maintains Entity Ratings of Olympia Chemicals Limited

Olympia Chemicals Limited (the Company) has established a strong presence in the manufacturing of Soda Ash (light and dense) and Refined Sodium Bicarbonate, reflected by its robust business profile. The assigned ratings take comfort from the Company’s consistent performance which is closely aligned with its well-devised and prudent business strategy. Currently, the Company operates with a total production capacity of 1,000 tons per day (TPD), which includes 160 TPD dedicated to food grade Sodium Bicarbonate. The local Soda Ash market exhibits a duopoly, with Lucky Core Industries holding a commanding ~60% market share, followed by Olympia Chemicals with approximately ~30% market share, while the remaining 10% is supplied through imports. Sapphire Chemicals, a new entrant in the soda ash segment, has obtained approval from the Special Economic Zone (SEZ) Authority to establish a manufacturing facility, with a primary focus on targeting export markets. The plant is expected to become operational within the next three years. Local demand for soda ash is closely tied to several key sectors, including glass manufacturing, detergents, specialty chemicals, and water treatment. Among these, the glass sector is the largest consumer. However, during FY24, the glass industry experienced subdued activity, primarily due to a slowdown in the construction sector. In 1HFY25, with the stabilization of macroeconomic indicators—marked by a significant decline in inflation and a reduction in policy rates—construction activity has picked up pace. This recovery is reflected in an ~11% increase in the Company’s soda ash sales volumes during the same period. The Company’s management remains focused on product diversification and has successfully ventured into the production of a value-added soda ash derivative — detergents. This segment is gaining traction and has demonstrated strong performance, registering double-digit growth. The Group has a well-established business legacy, with a diversified portfolio that includes poultry and processed chicken, animal feed, chemical manufacturing, edible oil extraction, agriculture, fruit orchards, carpet weaving, and textile production. The Company’s board primarily consists of close family members, indicating potential for strengthening governance practices. The topline of the Company registered a growth of ~8.3% during 1HFY25, primarily driven by higher volumes and price adjustments. However, margins posted a slight dilution. The financial risk profile of the Company is considered good with comfortable coverages, cashflows, and working capital management. Capital structure is low leveraged, and borrowings are mainly comprised of concessionary long-term loans (TERF).
The ratings are dependent on upheld sustainable profits and market share while retaining sufficient cash flows and coverages. However, adherence to maintaining its debt metrics at an adequate level is a prerequisite.

About the Entity
Olympia Chemicals Limited (the Company) was incorporated in Pakistan 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, and manufacturing facilities are located at Unit (I) Warcha Tehsil Quaidabad, District Khushab Warcha and Unit (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 (25%), Muhammad Shakil Monnoo and his family (36%) and Muhammad Khurshid Monnoo and his family (19.33%) and Muhammad Nasir Monnoo and his family (19.33%). Muhammad Shakil Monnoo is the CEO of the Company.