PACRA Assigns Initial Entity Ratings to Tariq Glass Industries Limited

Tariq Glass Industries Limited (the “Company” or “TGL”) ratings reflect reputable business profile and strong presence in glass industry. TGL has built formidable reputation of being a premier manufacturer of tableware, float glass, container-ware and opal glass in the Country and possess largest state of the art manufacturing facilities to achieve global standards. The float glass facilities can produce clear and coloured float glass, sandblasted glass tinted and reflective glass through an online CVD coating mechanism, and mirrors with spectrum technology. The company has expanded its footprints for manufacturing the opal glass dinnerware by installing the most modern manufactory which is the only plant in Pakistan. In float glass, the competition is duopoly and management asserts to have ~50% market share under the brand name of “Tariq Float Glass”. Demand drivers are closely linked with construction industry where Government has announced various supportive schemes. In tableware and opal glass, TGL has built a legacy over 4 decades and introduced famous brands like Toyo Nasic, Omroc, Nova, Rockware, Gemware and Spinrex. The tableware market is emerging more competitive however, the Company provides innovative, value-added products, tailored to the requirements for household and commercial sector with a market share of ~70%. In container-ware, TGL supplies to the beverage industry such as Coke, Pepsi along with other industrial consumers. Key pillars of business strategy include (a) quality and reliability of products (b) economies of scale. The Company is taking cognizance of corporate governance structure with independent oversight and formulated board committees. The Company is led by experienced management team and operations of the Company benefited with sound system of internal controls implemented across organization. Financial profile is demonstrated by healthy coverages, upright working capital management and comfortable cashflows. The capital structure is moderately leveraged mainly comprising long term borrowings on concessionary rates (LTFF) to support capacity expansion and BMR.
The ratings are dependent on upheld sustainable profits and market share while retaining sufficient cash flows and coverages. However, adherence to maintain its debt metrics at an adequate level is a prerequisite.

About the Entity
Tariq Glass Industries Limited (TGL) is a public listed company incorporated under the Companies Act, 1913 (now “Companies Act, 2017”) in 1978 went public in 1980 and listed in 1984. Mr. Omer Baig is the sponsor director and Managing Director/CEO of the Company who beneficially owns ~57% shareholding. Over the years, no major change has been observed in the shareholding structure, overall control vests with seven members (Board of Directors). Out of seven, two executive directors including the Managing Director/CEO, three non-executive directors including the Chairman and one female director while remaining two are independent directors.