|
Report Date : |
20.02.2012 |
IDENTIFICATION DETAILS
|
Name : |
LOTTE PAKISTAN PTA LIMITED |
|
|
|
|
Registered Office : |
EZ/1/P-4, Eastern Industrial Zone, Port Qasim, Karachi |
|
|
|
|
Country : |
Pakistan |
|
|
|
|
Financials (as on) : |
2010 |
|
|
|
|
Year of Establishment : |
1998 |
|
|
|
|
Com. Reg. No.: |
0039152 |
|
|
|
|
Legal Form : |
Public Limited Company |
|
|
|
|
Line of Business : |
Manufacture and sale of Pure Terephthalic Acid (PTA). |
|
|
|
|
No. of Employees : |
600 |
RATING & COMMENTS
|
MIRA’s Rating : |
B |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
Status : |
Moderate |
|
Payment Behaviour : |
No Complaints |
|
Litigation : |
Clear |
NOTES :
Any query related to this report can be made
on e-mail: infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – September 30, 2011
|
Country Name |
Previous Rating (30.06.2011) |
Current Rating (30.09.2011) |
|
Pakistan |
B2 |
B2 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
LOTTE PAKISTAN PTA LIMITED
|
Registered
Address |
|
EZ/1/P-4,
Eastern Industrial Zone, Port Qasim, Karachi, Pakistan |
|
Tel # |
92 (21) 111-782-111, 34726005, 34726010 |
|
Fax # |
92 (21) 34726004 |
|
Nature of Business |
Manufacture and
sale of Pure Terephthalic Acid (PTA). |
|
Year Established |
1998 |
|
Registration # |
0039152 |
|
In Karachi, Lahore
& Islamabad |
|
KPMG Taseer Hadi & Co. (Chartered
Accountants) |
|
Subject Company
is a public limited company incorporated in Pakistan and is listed at
Karachi, Lahore & Islamabad Stock Exchanges of Pakistan |
|
Names |
Designation |
|
Mr. Soon Hyo Chung Mr. M. Asif Saad Mr. Soo Young Huh Mr. Neon Jung Kim Mr. Oh Hun Im Mr. Mohammad Qasim Khan Mrs. Aliya Yusuf Mr. Istaqbal Mehdi Mr. Tajammal Hussain Bokharee |
Chairman Chief Executive Director Director Director Director Director Director Director |
|
Names |
Shareholding
(%) |
|
Associated
Companies, Undertakings and related parties NIT & ICP Directors, CEO
and their spouses Executives Public Sector
Companies & Corporations Banks, Development
Finance Institutions, Non-Banking Finance Institutions Insurance
Companies Modaraba &
Mutual Funds Others Individuals |
75.01 0.48 0.00 0.00 0.15 1.52 1.63 1.19 5.18 14.84 |
|
The Company is a
subsidiary of KP Chemical Corporation - Korea and its ultimate parent company
is South Korean conglomerate “Lotte”. |
Manufacture and sale of Pure Terephthalic Acid (PTA).
600
2010 2009
Annual name plate capacity 506,750 506,750
Actual Production 483,433 506,750
Lower production in the current year is primarily
due to planned shutdown of the plant for overhaul.
|
Years |
In Pak Rupees |
|
2009 2010 |
37,851,240,000/- 42,401,588,000/- |
|
Mainly exist at all major cities of Pakistan |
(1) Askari Bank Limited, Pakistan.
(2) Deutsche Bank AG, Pakistan.
(3) Habib Bank Limited, Pakistan.
(4) HSBC Bank Middle East Limited, Pakistan.
(5) MCB Bank Limited, Pakistan.
(6) National Bank of Pakistan, Pakistan.
(7) Standard Chartered Bank (Pakistan) Limited, Pakistan.
The US economy has
started to show increasing signs of improvement with the roll out of the
government’s “quantitative easing” policy. Furthermore, despite the tight
monetary stance adopted by the Chinese Government, the growth trajectory in
that country for 2011 is expected to remain fairly robust. These upbeat
indicators bode well for the entire petrochemical chain and the downstream
polyester sector which, coupled with the continuing shortage of cotton, is
expected to maintain high operating rates during 2011. The regional Px balance
is expected to further improve with new plants in the Middle East, which had
declared force majeure closures in Q4 2010, coming back on-stream during Q1
2011. Coupled with new polymerisation capacities coming online in China and
India during 2011, PTA prices and margins are expected to remain healthy for
the foreseeable future. One of the largest PSF manufacturers in Pakistan has
announced its capacity enhancement plans with the new plant expected to start
production within the next two years. This would result in an increase in the
domestic PTA requirement which, in turn, makes the case for expansion of
domestic PTA production capacity more compelling. However, the Board of
Directors would like to underscore the cyclical nature of the PTA industry and,
despite the high margins and profitability of the Company at this point in
time, it is likely to consider the huge capital outlay of over US$ 400 million
required for plant expansion, if the GoP assures the Company of increasing and
maintaining the import tariff on PTA at a level much higher than the current
3%. The Company’s major shareholder would also like to point out that
production of PTA in Pakistan is less competitive than other countries like
China and India because of the much higher infrastructure costs for receipt,
storage and handling of raw materials at the port and higher costs of
electricity and supply of industrial gases etc. Due to lower costs and higher
import tariff levels in China and India (6.5% and 5% respectively), PTA
production in those countries remains more profitable than in Pakistan and
allows them to take advantage of market opportunities by continuing to expand.
The GoP as well as the downstream polyester and textile sectors need to
understand that dependence upon imported PTA, particularly in times of raw
material shortage, can constrain production and exports of textile products.
The current market situation is representative of this phenomenon where textile
production in the country can suffer seriously should the domestic production
and supply of PTA become restricted for any reason. There is therefore a need
for the entire polyester sector to work together to optimise the supply chain
in the country. Increased profitability of all sectors within the polyester and
textile value chains continues to offer opportunities for growth and investment
which should be seized for the collective long term benefit of all stakeholders
in Pakistan.
·
Federation
Pakistan Chamber of Commerce & Industry.
|
Currency |
Unit |
Pakistani Rupee |
|
US Dollar |
1 |
Rs. 90.60 |
|
UK Pound |
1 |
Rs. 142.70 |
|
Euro |
1 |
Rs. 119.60 |
Subject Company was established in 1998 and
is engaged in manufacture and
sale of Pure Terephthalic Acid (PTA). All the directors are reported as
qualified, resourceful & experienced businessmen. Company can be considered
for normal business dealings at usual trade terms and conditions.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.49.21 |
|
|
1 |
Rs.77.75 |
|
Euro |
1 |
Rs.64.58 |
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
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 |
|
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 |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
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 |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
-- |
NB |
New Business |
-- |
This score serves as a reference to assess SC’s credit risk and
to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.