The Pakistan Credit Rating Agency Limited
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Raniya Tanawar

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PACRA Maintains Entity Ratings of Sayban International

Rating Type Entity
(24-Dec-19 )
(27-Jun-19 )
Action Maintain Maintain
Long Term BB+ BB+
Short Term A3 A3
Outlook Stable Stable
Rating Watch - -

Sayban International ("Sayban" or "the AOP") operates in three segments: i) pesticides ii) seeds and bio 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 a sizeable turnover, with contribution from each segment, while pesticide business remains predominant in terms of revenue. Business profitability is sanguine. Sayban has managed to mark its presence in the market through operational efficacy. The AOP retains it market share despite fragmentation in the crop protection industry and uncertainties at the economic and agricultural level. Sayban is a partnership - envisaged to be converted into a private limited company. Historically, a part of the Auriga Group, through restructuring and separation of business partners, the AOP now legally operates in the ambit of Sayban Group. The group is also setting up other Companies to expand its agricultural presence, one of which is a pesticides business - "Comega Life Sciences (Pvt.) Ltd". Governance structure necessitates need for improvement which is expected to be reflected when its legal status is revised. Sayban meets its working capital requirements through a mix of internal cashflows and short term borrowings. Financial risk profile remains comfortable on account of low leveraged capital structure and adequate coverages.
The ratings are dependent on sustained business and financial risk profile of the AOP. Meanwhile, improved governance practices are essential.

About the Entity
Sayban International (Under Sayban Group) incorporated in 2005 as a result of AOP, started its operations in 2007. Sayban has been working independently from 2015. Post restructuring, the current shareholding constitutes; Mr. Muhammad Azam Cheema and Mr. Shamsher Hussain each with 44.18% and remaining with Mr Muhammad Tariq. Sayban Zarai Markaz (Pvt.) Limited has been formed to acquire the Sayban International after restructuring the ownership.
Sayban, as a partnership, does not have a formal BOD structure, as it is being run by Partners. Going forward, the 3 partners (Previously 7 partners), are actively involved in the management as well. Mr. Muhammad Azam Cheema is the CEO of the AOP. He possesses vast business acumen spanning over two and half decades. The CEO is supported by experienced management team; a balanced blend of professional people from the industry.

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.