MIRA INFORM REPORT

 

 

Report No. :

318917

Report Date :

24.04.2015

 

IDENTIFICATION DETAILS

 

Name :

METHANOL CHEMICAL COMPANY LTD (CHEMANOL)

 

 

Formerly Known As :

SAUDI FORMALDEHYDE CHEMICAL COMPANY LTD (SFCCL)

 

 

Registered Office :

Al Moujil Building, Al Dhahran Street, P O Box: 3139 & 6139, Dammam 31471

 

 

Country :

Saudi Arabia

 

 

Financials (as on) :

31.12.2014

 

 

Date of Incorporation :

31.07.1989

 

 

Com. Reg. No.:

2055001870, Dammam

 

 

Legal Form :

Saudi Joint Stock Company

 

 

Line of Business :

Production of Premium Grade Formaldehyde and Derivative Products, Including Formalin, Melfores, Paraformaldehyde and Ufores.

 

 

No. of Employees :

530

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

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 – December 31, 2014

 

Country Name

Previous Rating

(30.09.2014)

Current Rating

(31.12.2014)

Saudi Arabia

A2

A2

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

 

SAUDI ARABIA - ECONOMIC OVERVIEW

 

Saudi Arabia has an oil-based economy with strong government controls over major economic activities. It possesses about 16% of the world's proven petroleum reserves, ranks as the largest exporter of petroleum, and plays a leading role in OPEC. The petroleum sector accounts for roughly 80% of budget revenues, 45% of GDP, and 90% of export earnings. Saudi Arabia is encouraging the growth of the private sector in order to diversify its economy and to employ more Saudi nationals. Diversification efforts are focusing on power generation, telecommuncations, natural gas exploration, and petrochemical sectors. Over 6 million foreign workers play an important role in the Saudi economy, particularly in the oil and service sectors, while Riyadh is struggling to reduce unemployment among its own nationals. Saudi officials are particularly focused on employing its large youth population, which generally lacks the education and technical skills the private sector needs. In 2014 the Kingdom ran its first budget deficit since 2009, and faces budget deficits for the foreseeable future because it requires an oil price greater than $100 per barrel to balance its budget. Although the Kingdom can finance high deficits for several years by drawing down its considerable foreign assets or borrowing, it probably will begin to reduce capital spending if oil prices stay low through the next year.

 

Source : CIA

 

 

SUMMARY

 

Company Name                                    : METHANOL CHEMICAL COMPANY LTD (CHEMANOL)

Previously Known As                             : SAUDI FORMALDEHYDE CHEMICAL COMPANY LTD (SFCCL)

Also Known As                                     : THE FACTORY OF METHANOL CHEMICALS COMPANY

Country of Origin                                   : Saudi Arabia

Legal Form                                           : Saudi Joint Stock Company

Registration Date                                  : 31st July 1989

Commercial Registration Number           : 2055001870, Dammam

Chamber Membership Number               : 405

Issued Capital                                       : SR 1,206,000,000

Paid up Capital                                     : SR 1,206,000,000

Total Workforce                                     : 530

Activities                                               : Producers of Formaldehyde and derivative products.

Financial Condition                                : Good

Payments                                             : Nothing detrimental uncovered

Operating Trend                                    : Steady

 

COMPANY NAME

 

METHANOL CHEMICAL COMPANY LTD (CHEMANOL)

 

 

PREVIOUSLY KNOWN AS

 

SAUDI FORMALDEHYDE CHEMICAL COMPANY LTD (SFCCL)

 

 

ALSO KNOWN AS

 

THE FACTORY OF METHANOL CHEMICALS COMPANY

 

 

ADDRESS

 

Registered & Physical Address

 

Building            : Al Moujil Building

Street               : Al Dhahran Street

 

PO Box            : 3139 & 6139

 

Town                : Dammam 31471

Country             : Saudi Arabia

 

Telephone         : (966-13) 8342397 / 8338831 / 8337317 / 3589905 / 3581111 / 8144685

Facsimile          : (966-13) 8342283 / 8144678

Mobile              : (966-50) 4499385

Email                : sfccl@saudiform.com / fawaz@chemanol.com / info@chemanol.com

 

Premises

 

Subject operates from a large suite of offices that are rented and located in the Central Business Area of Dammam.

 

Branch Office (s)

 

     Location                                                                                           Description

 

·       Tareeq 198 Secondary Industries Park                                               Owned factory premises

Section P, Block 5, Lot No. 4 & 6, Administrative Bldg

PO Box: 2101 / 7953

Jubail 31951

Tel: (966-13) 3584616 / 3581048

Fax: (966-13) 3583592

 

 

KEY PRINCIPALS

 

     Name                                                                                               Position

 

·       Abdullah Mohamed Al Mazrouie                                                        Managing Director

 

·       Khalid Al Zamil                                                                                 Director

 

·       Adeeb Al Zamil                                                                                 Director

 

·       Bader Kanoo                                                                                    Director

 

·       Abdul Mohsen Al Nafsi                                                                     Director

 

·       Sami Jalal                                                                                        Director

 

·       Hamad Al Manae                                                                              Director

 

·       Khalid Bin Ibrahim Al Rabiah                                                             General Manager

 

·       Fawaz Al Abbad                                                                               Administration Manager

 

 

LEGAL FORM & OWNERS

 

Date of Establishment  : 28/12/1409 Hijri (corresponding to 31st July 1989). Production began in 1991

 

History                         : Subject was established in 1989 under the name of “Saudi Formaldehyde Chemical

Company Ltd (SFCCL)”. However in March 2007, and in order to reflect its expansion  into methanol production the subject was re-registered under the new name of “Methanol Chemical Company Ltd (Chemanol)”

 

Legal Form                  : Saudi Joint Stock Company

 

Commercial Reg. No.   : 2055001870, Dammam

 

Chamber Member No.  : 405

 

Issued Capital              : SR 1,206,000,000

 

Paid up Capital            : SR 1,206,000,000

 

Name of Shareholder (s)                                                          Percentage

 

·       Abdullah A Kanoo Co                                                                11%

 

·       Zamil Group Holding Co                                                            11%

 

·       Mazen Khalif Ahmed Al Naeimi & Sons Co                                    8%

 

·       Mohammad Jalal & Sons Co                                                        5%

 

·       Al Mazrouie Holding Co                                                               5%

 

·       Members of the general public & private investors                      60%

 

 

AFFILIATED COMPANIES

 

·       United Gulf Steel Mill Co Ltd

PO Box: 35344

Dammam

       Tel: (966-13) 8343853

       Fax: (966-13) 8346627

 

 

OPERATIONS

 

Activities: Engaged in the production of premium grade Formaldehyde and derivative products, including Formalin, Melfores, Paraformaldehyde and Ufores.

 

     Subject’s current product range comprises the following chemicals in 26 grades:

 

         -  Aqueous Formaldehyde Solutions (AF-37 / Formalin)

         -  Urea Formaldehyde Concentrate (UF-85 / Formurea)

         -  Hexa Methylene Tetramine (HMT / Hexamine)

         -  Paraformaldehyde (Paraform)

         -  Melamine & Urea Formaldehyde Resins (Spray Dried)

         -  Glazing Powder

         -  Methanolic / Butanolic Solutions of Formaldehyde

         -  Sulphonated Naphthalene & Melamine based Superplasticizers (SNF/SMF)

 

Production Capacity:  200,000 tonnes per annum

 

Import Countries : Germany and the United States of America.

 

Export Countries: More than 80% of its production capacity is exported to more than 50 countries in the Middle East, Indian Subcontinent, Africa, Europe, Asia, Australia and North America.

 

Operating Trend : Steady

 

Subject has a workforce of approximately 530 employees.

 

 

FINANCIAL DATA

 

Financial highlights provided by local sources are given below:

 

Currency: Saudi Riyals (SR)

 

Balance Sheet                                                                31/12/14            31/12/13            31/12/12

 

Assets

Current assets

Cash                                                                             50,313,840        78,545,791        114,777,303

Margin deposits with bank                                             -                       500,000 500,000

Trade receivables                                                          207,155,453      245,767,102      251,468,777     

Inventories                                                                    162,725,961      127,936,115      121,445,541     

Prepayments and other current assets                            42,741,903        26,237,488        45,673,579       

Total current assets                                                       462,937,157      478,986,496      533,865,200     

 

Non current assets

Property, plant and equipment                                       2,174,393,702    2,265,174,790    2,343,802,441   

Intangible assets                                                           12,206,250        12,993,750        13,781,250       

Deferred charges                                                          -                       -                       1,768,228         

Long term prepaid expenses                                          -                       25,531,233        30,992,729       

Total non-current assets                                                 2,186,599,952    2,303,699,773    2,390,344,648   

Total assets                                                                  2,649,537,109    2,782,686,269    2,924,209,848   

 

Liabilities and shareholders’ equity

Current liabilities

Trade payables                                                             57,303,657        45,681,459        56,498,531       

Short term loans                                                            207,241,138      60,000,000        -                      

Current portion of long term bank debts                         154,098,505      154,560,000      142,625,000     

Current portion of long term obligations                         1,337,500          1,337,500          3,087,500         

Accrued expenses and other current liabilities                 52,366,065        49,640,268        40,289,265       

Zakat provision                                                             -                       5,000,000          4,901,401         

Total current liabilities                                                    472,346,865      316,219,227      247,401,697     

 

Non current liabilities

Long term bank debts                                                    608,076,758      851,805,000      1,075,925,000   

Long term obligations                                                    -                       -                       -                      

Employees’ end of service benefits                               27,841,087        31,430,811        27,643,478       

Total non-current liabilities                                              635,917,845      883,235,811      1,103,568,478   

Total liabilities                                                               1,108,264,710    1,199,455,038    1,350,970,175   

 

Shareholders’ equity

Share capital                                                                 1,206,000,000    1,206,000,000    1,206,000,000   

Share premium                                                              72,850,071        72,850,071        72,850,071       

Statutory reserve                                                           44,118,693        40,898,576        33,686,753       

Retained earnings                                                          218,303,635      263,482,584      260,702,849     

Total shareholders’ equity                                              1,541,272,399    1,583,231,231    1,573,239,673   

Total liabilities and shareholders’ equity                          2,649,537,109    2,782,686,269    2,924,209,848   

 

Statement of Income

 

Sales                                                                            884,666,252      873,722,183      920,747,322     

Cost of sales                                                                (701,072,817)    (664,218,823)    (703,297,587)   

Gross profit                                                                  183,593,435      209,503,360      217,449,735     

Selling and distribution expenses                                   (69,844,461)      (66,558,521)      (68,991,497)     

General and administrative expenses                              (42,589,259)      (24,497,755)      (25,590,062)     

Amortisation of deferred charges                                   -                       (1,768,228)        (2,972,864)       

Operating income                                                          71,159,715        116,678,856      119,895,312     

Other income                                                                (1,514,693)        (2,027,121)        14,077,491       

Financial charges                                                          (40,732,148)      (36,871,730)      (37,643,403)     

Income before Zakat                                                      28,912,874        77,780,005        96,329,400       

Zakat                                                                            3,288,294          (5,661,774)        (4,900,000)       

Net income                                                                   32,201,168        72,118,231        91,429,400       

 

Local sources consider subject’s financial condition to be Good.

 

 

BANKERS

 

·       National Commercial Bank

PO Box: 13

Dammam 31411

Tel: (966-13) 8331188

Fax: (966-13) 8336058

 

·       Arab National Bank (ANB)

King Street

PO Box: 18

Dammam 31411

Tel: (966-13) 8323440

Fax: (966-13) 8337829

 

 

PAYMENT HISTORY

 

No complaints regarding subject’s payments have been reported.

 

 

GENERAL COMMENTS

 

During the course of this investigation nothing detrimental was uncovered regarding subject’s operating history or the manner in which payments are fulfilled. As such the company is considered to be a fair trade risk.

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.63.19

UK Pound

1

Rs.94.94

Euro

1

Rs.67.66

 

INFORMATION DETAILS

 

Analysis Done by :

DIV

 

 

Report Prepared by :

NIT

 

               

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%)

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.