PACRA Maintains Entity Ratings of United Ethanol Industries Limited

The ratings reflect United Ethanol’s (‘United Ethanol Industries Limited' or 'the Company’) sustained market standing within Pakistan’s ethanol industry. A pivotal strategic linkage reinforcing the ratings lies in the Company’s association with the United Group, a diversified conglomerate with consolidated revenues of approximately PKR 67.3 billion and total assets of PKR 40.7 billion as of MY24. The Group’s strong financial footing and established presence across the sugar and allied sectors provide a sound foundation of operational and financial support to United Ethanol. The Company benefits from vertical integration through its association with group sugar mills including Ranipur Sugar Mills (Pvt) Limited, SGM Sugar Mills and Sindh Abadgar Sugar Mills which ensures consistent raw material supply and enhances cost efficiency. Furthermore, the Group’s geographically diversified operations contribute to supply chain resilience and operational continuity, underpinning steady financial performance.
Despite these strengths, the Company remains exposed to sectoral risks stemming from fluctuations in sugarcane yield and quality due to agronomic conditions, cyclical crop patterns, and climate change impacts across the country. Volatility in raw material pricing continues to exert pressure on margins, underscoring the need for prudent cost and inventory management. On the external front, international ethanol prices have remained subdued amid global economic uncertainty, weighing on profitability metrics. Furthermore, the Company’s export performance is vulnerable to evolving global trade dynamics, particularly following the European Commission’s decision to suspend Pakistan’s GSP+ tariff preferences on ethanol, effectively revoking preferential tariff treatment for exports to the European market
United Ethanol’s revenue remains predominantly export-driven, with 97% of sales from international markets. During 3QMY25, topline declined to PKR 4.0 billion (3QMY24: PKR 5.4 billion) amid weaker global ethanol prices. Profitability remained resilient, supported by sustained gross margins from lower molasses costs and operational efficiencies through vertical integration. Net margins remains stable, reflecting lower finance costs followed by the SBP’s policy rate cut. The Company maintains a conservative capital structure with short-term ERF borrowings, stable leverage and strong liquidity, reflecting sustained financial resilience amid pricing pressures and sectoral volatility.
The ratings hinge on the management's adeptness in consistently preserving profit margins. It is imperative that the management exercises prudent debt management and ensures robust liquidity, as these factors play a pivotal role in determining the ratings. A substantial rise in debt, decline in coverages, will adversely affect the ratings.

About the Entity
United Ethanol Industries Limited is a public unlisted Company. Primary business activity of the Company involves manufacturing and sale of industrial grade ethanol. United Ethanol has a installed production capacity of 120,000 liters per day. The Company was incorporated in 2003, and is part of United Group. The Group entities include three sugar mills (Sindh Abadgar's Sugar Mills, SGM Sugar Mills and Ranipur Sugar Mills (Pvt) Limited), United Ethanol Industries Limited, Agro Trade (Pvt.) Limited, United Agro Chemicals, United Commodities (Pvt) Limited and Synergy Packaging (Pvt.) Limited. The Essarani Family acquired the Company in 2016. Shareholding of the Company rests with Essarani Family. The Company is headed by Dr. Tara Chand, the CEO. He is ably supported by a team of experienced professionals.