PACRA Maintains Entity Rating of Starch Pack (Pvt.) Limited

The assigned ratings to Starch Pack (Pvt.) Limited ('Starch Pack' or the 'Company') gathers support from its association with Packages Group (the Group), which holds a strong footing across the packaging value chain through Packages Limited and the financial sector through IGI Holdings. Starch Pack is principally involved in the manufacturing and selling of corn-based native/modified starches and derivatives (e.g., Glucose and unrefined Corn Oil). The Company was set up as part of the Group's backward integration vision for Bulleh Shah Packaging (Pvt.) Limited, which manufactures and sells paper, board, and corrugated boxes in Pakistan. This strategic initiative was aimed at creating Group synergies within the packaging value chain. The Company projects to benefit from Pakistan's highly localized corn sector, which holds significant growth opportunities in the value-added segment across both local and international markets. Both native and modified starch variants are considered to be vital inputs for the textile, paper, and packaging sectors. Despite stability in the internal demand from Bulleh Shah Packaging, the Company requires time to overcome the initial operational challenges. The Company's topline has posted growth; however, inflated cost structures have led to persistent losses at the gross and net levels. Developing a cautious strategy to capitalize on the plant's strategic location and achieving economies of scale remains pertinent for the Company. Crucially, the Group's international presence provides an established global footprint for Starch Pack's products. The immediate focus on enhancing local sales, followed by increasing exports of value-added products, remains essential to achieve an operational breakeven. On the financial risk front, the working capital cycle is adequate, while coverages are weak. Moreover, continuous financial support from the Group, which includes an equity injection of ~PKR 3bln as of Dec-24, the latest equity injection of ~PKR 1.4bln as of Oct-25, and another projected equity injection of ~PKR 2bln in 2026 to cover the consistent losses, remains pivotal in sustaining the assigned ratings. This, along with strong sponsor acumen, and a developed governance framework remains paramount. The Company's current lean structure, supported by a well-equipped and experienced management team, bodes well. Moreover, a sound control environment adds the requisite respite.
The ratings are dependent on continued Group synergies. This, along with the timely and successful materialization of projected initiatives (local and/or international), while keeping the business margins in control, remains critical to the assigned rating. Moreover, enhancing market reach, along with managing the efficiency in the working capital cycle, is crucial.

About the Entity
Starch Pack (Pvt.) Limited ('Starch Pack' or the 'Company') was incorporated as a private limited company in Jun-21. The Company manufactures and sells corn-based starch products, derivatives, and by-products. Starch Pack is a wholly owned subsidiary of Packages Limited. Its manufacturing plant is located in Kasur, Punjab. Mr. Imran Khalid Niazi chairs the Board, while Mr. Fazeel Ur Rehman heads the Company as the CEO. They are assisted by an experienced management team.