MIRA
INFORM REPORT
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Report Date : |
10th June 2006 |
IDENTIFICATION DETAILS
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Name : |
AZAR CHEMICAL INDUSTRIES LTD |
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Registered
Office : |
Ajuma Links off Graphic Rd, South Industrial
Area, Kaneshi P. O. Box 30 Accra- Ghana |
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Country : |
Ghana |
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Date of Incorporation
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20th March, 1968 |
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Legal Form : |
Private Limited Liability Company |
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Line of
Business : |
Engaged in the business of manufacturing of
paints |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation
is considered normal. Capable to meet normal commitments. |
Satisfactory |
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Status : |
Satisfactory
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Payment
Behaviour : |
Usually Correct |
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Litigation : |
Clear |
REPORT SUMMARY
Name: Azar
Chemical Industries Ltd
Address: Ajuma
Links off Graphic Rd, South Industrial Area, Kaneshi P. O. Box 30 Accra- Ghana
Tel: 23321
229570/ 223113 / 233659
Fax: 23321
227098 / 233659
E-mail: info@azarghana.com
Website: www.azarghana.com
Registered
Office: N/A
Date
Incorporated: 20th
March, 1968
Started
Business: 9th
April 1968
Managing
Director/CEO: Mr.
Khazi Ruston Azar
Legal
Form: Private
Limited Liability Company
RC
No.: N/A
Authorized
Capital: N/A
Line
of Business: Manufacturing
of paints
Product/Service: Azar Gloss, Savana Emulsion
paint, Shield Acrylic paints, Azar Fix, Nitro Cellulose Lacquer, Car Flex and
Tiles.
Number
of Employees: 110
Trade
Membership: N/A
Sales Turnover:
Networth:
Financial information was not provided, despite our visit to their office
Financial
Condition:
Operating
Trend: Steady
Payments: Prompt
Public: Nothing detrimental
uncovered
Credit
Risk: Good
Credit
Limit: Medium
credits possible
Business
Relations: Good
for normal business relations
BUSINESS RISKS
SUBJECT’S BUSINESS ENVIRONMENT
Presently,
Ghanaian economy is improving with higher capacity utilization in the
industries and low inflationary trends. Moreover, there are influx of foreign
investment into the country.
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NATURE OF SUBJECT’S BUSINESS
Subject has been in the business of manufactured
and distribution of paints within Ghana and some neighbouring countries.
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THE SUBJECT AND ITS INDUSTRY
Subject is a major and viable player in the paint
industry in Ghana. Moreover, in the
paint industry, it has maintained the tradition of excellence in its operations
in major town and cities in Ghana.
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CHAIRMAN/MANAGING DIRECTOR & CEO
Mr Ghazi Ruston Azar is the Managing Director/ceo
of the subject. Major decisions are
Taken by him in line with his line managers
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BUSINESS DIRECTION OF SUBJECT
Subject’s immediate plans are to buy its equipment
directly from manufacturers in order to expand its business operations locally.
Meanwhile, subject tends to remain
An active player within the industry
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CASH FLOW & PROFITABILITY
Despite our visits to subject office, financial
information was not provided.
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MARKETS AND PRODUCTS
Subject Customers are mainly private sectors and
public sectors in Ghana. Subject is engaged in manufacturing of high quality
paints.
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MARKET GEOGRAPHICAL SPREAD
Azar chemical industries limited distribution net
work encompasses major town and cities in Ghana, Nigeria, Togo and Burkina
Faso.
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PRODUCT RANGE
Leasing of:
- Azar
Gloss * Azar Fix
- Savan
Emulsion paint * Nitro Cellulose Lacquer
- Shield
Acrylic paint *
Tiles
- Car
Flex
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PRODUCT LIFE CYCLE
Subject’s products life cycle is long. However,
this depends on the maintenance by the end users.
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THE SUPPLY CHAIN
Subject purchases equipment and material from its
agent overseas and sell to major customers in Ghana and some countries in West
Africa.
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TECHNOLOGY & CHANGE
Subject is adapting to technology and change in its
line of business and upgrading its equipment to meet the needs of its clients.
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COMPETITIVE ADVANTAGE
- High
quality products
- Prompt
Delivery of its products
- Experienced
personnel
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COST LEADERSHIP
Subject’s endeavours to operate at a very low cost
in comparison with what its competitors offer in the market place. This will
also depend on the business environment.
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BREAKTHROUGH
PRODUCTS/SERVICES
Subject breakthrough products are Emulsion paint
and Azar Gloss.
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COMPETITIVE FORCES
Subject’s major competitive forces include
multinational companies and other indigenous firms involved in the same line of
business.
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EXISTING COMPETITORS
- Leyland
Paint
- Deluxe
paint
- Falcon
paint
- Anchor
paint
- Acrylic
shield paint
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THREAT OF NEW ENTRANT
Subject does not consider a new entrant as a
threat. Besides, the market is open to competition that would enhance the
competitiveness in the sector
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SUPPLIER POWER
The industry comprises of many supplier, henceforth,
monopolistic power does not exist.
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BUYER POWER
There are numerous buyers of Azar chemical
industries products. Anyone particular customer cannot exercise undue influence
on the subject pricing policy.
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SWOT ANALYSIS
- Strengths:
High quality products
In-depth knowledge of the market
- Weaknesses: Lack enough equipment
- Opportunities:
Large market
- Threats: Unfavourable
government policies
Foreign exchange problem.
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SHAREHOLDERS
& SHARES HELD
Ghazi Ruston Azar
Ruston Azar
George Chammas
Samuel Christian
Narayan Kandada
Comment: Information
on shareholders held was not provided.
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COMPANIES:
Subject has no affiliated company.
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PROFESSIONAL ADVISERS
Information not available.
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PREMISES
The factory and administrative office are situated
at South Industrial Kaneshi, Accra. The subject owns the building.
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MANAGEMENT
PROFILE:
Name Designation
Ghazi Ruston Azar MD/CEO
Comment: Information on other line managers was
not provided as at the reporting date.
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EMPLOYEES
One hundred and fifty
COMMENT: Subject is
still at its growing state.
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OWNERSHIP STRUCTURE
(a) Shareholding
percentage:
Foreign
90%
Ghanaians
10%
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MARKETING REPORT
Pricing policy: Competitive
Turnover/Products (N): N/A
Turnover
by Geographical Distribution (N): N/A
Advertisement/Promotion: Print
and Electronic Media
Marketing
Research: Price
Survey
Competitive
Analysis
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Price: Competitive
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Location:
Operation
Office is situated in
Kaneshi, Accra.
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Distributive
Network: Ghana,
Togo and Burkina Faso
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Quality
of Product/Services: High
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Advertisement: Often
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ECONOMIC
TREND
2006
Foreign Exchange Rate to US$ Cedi 9,400
Interest Rate (Lending) 14.5%
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GLOBAL
ECONOMIC TREND
Globally, paint
industry is large and the market is not yet over utilized. Moreover, there is
growth prospect for players within the industry.
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SUPPORT FACILITIES:
1.
Computers
2. Power Generating plants
3. Access Road
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BRANCH:
Presently subject has no branches. Meanwhile, plans
are underway to open an outlet in some towns before the end of the year.
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SOURCE
OF RAW MATERIALS
Local: 40
Foreign: 70
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FINANCIAL INFORMATION
Financial information was
not provided by subject’s principal despite our numerous call and visits to
their office.
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JUDGMENT ABOUT SUBJECT’S CREDIT
STANDING
CHARACTER
Mr. Ghazi Ruston
Azar is the principal owner of the company. He is well known in business
circles in Accra; commanding high respect and influence.
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ABILITY
The Articles of
Association empowers subject to enter into financial agreement bordering on
borrowing, mortgage, amongst others.
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MEANS
Subject has the
technical expertise and equipment to run a profitable business operation.
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PURPOSE
Information was
not provided.
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AMOUNT
Subject can be
considered good for medium term credit assistance.
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REPAYMENT
Any facility
granted will be repaid from subject’s operational cash flow within the agreed
period.
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INSURANCE
Subject assets are
adequately insured with a reputable insurance company in Accra, Ghana.
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INTEREST
Prevailing interest
rate will be ideal as stipulated by the monetary authorities.
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COMMISSION
Subject will pay
any commission and charges in respect of normal business transactions.
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EXTRA
Extra charges, such
as management, commitment and legal fees will be borne by subject.
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VITAL GOVERNMENT CONTACT
Subject has some
influence with the federal government
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LITIGATION
No legal issue was bought
to our notice at the time of preparing this report.
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BANKERS
Eco Bank, Ghana
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PAYMENT HABIT/HISTORY:
Regular
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EXECUTIVE LIFESTYLE
Name: Ghazi
Ruston Azar
Address: Azar
Chemical Industries Ltd
South
Industrial, Kaneshi, Accra
Nationality: Lebanese
Position in the Company: Managing Director/CEO
Professional
Qualification(s): None
Marital Status: Married
Number of Children: N/A
Political Association: None
----------------------------------------------------------------------------------------------------------------------------------------PROPERTY OWNED BY PRINCIPAL
Real Estate
- Number:
None
- Location: None
Automobile
Number: Two (2)
Brands:
Club Membership:
List of Titles: None
Hobbies: socializing
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OTHER FACTORS
GOVERNMENT REGULATIONS
There is no government regulation except, the
government allowed the influx of foreign investors into the country.
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LEGAL ISSUE
No legal issue was brought to our notice at the
time of preparing this report
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LABOUR ISSUES
Subject does not belong to any organized
union. Besides, subject’s employees are well remunerated.
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INFRASTRUCTURE PROBLEMS
The provision of basic amenities has witnessed
tremendous improvement in the recent past, power supply, water supply and good
road network.
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CORRUPTION ISSUES:
The scourge has been drastically minimized by
putting in place laws to arrest the situation.
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TERRORISM:
Presently there is no trace of terronism in Ghana.
Except communal clashes in town and some cities.
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LOCAL DIVIDEND
PAYOUT REQUIREMENTS:
Private limited liability companies are not
obliged by law to declare dividend. This is done only at the instance of the
shareholders.
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INTEGRITY OF
OWNERS CHARACTER:
Subject’s owners are well known in the paint
industry.
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SOCIAL/COMMUNITY RESPONSIBILITY
Subject’s interest in the provision of social
amenities and donation to the host communities.
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STOCK MARKET SHARE MOVEMENT
Stock
Price: Subject is a private
limited liability company. Henceforth, it shares are not quoted on the floor of
Ghana Stock Exchange.
COMMENT AND RECOMMENDATION
Azar Chemical Industries limited was incorporated
in Ghana on the 20th of March 1968 as a private limited liability company. Its
commenced business on the 9th April 1968. Subject is a going concern
business. Meanwhile, financial information was not provided despite our visit
to their office. Subject is good for
normal business relationship.
RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an
extremely sound financial base with the strongest capability for timely
payment of interest and principal sums |
Unlimited |
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71-85 |
Aa |
Possesses
adequate working capital. No caution needed for credit transaction. It has
above average (strong) capability for payment of interest and principal sums |
Large |
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56-70 |
A |
Financial &
operational base are regarded healthy. General unfavourable factors will not
cause fatal effect. Satisfactory capability for payment of interest and
principal sums |
Fairly Large |
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41-55 |
Ba |
Overall
operation is considered normal. Capable to meet normal commitments. |
Satisfactory |
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26-40 |
B |
Unfavourable
& favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average/normal. |
Small |
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11-25 |
Ca |
Adverse factors
are apparent. Repayment of interest and principal sums in default or expected
to be in default upon maturity |
Limited with
full security |
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<10 |
C |
Absolute credit
risk exists. Caution needed to be exercised |
Credit not
recommended |