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Report No. : |
321977 |
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Report Date : |
15.05.2015 |
IDENTIFICATION DETAILS
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Name : |
NESTLE PAKISTAN LIMITED |
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Registered Office : |
308, Upper Mall, Lahore |
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Country : |
Pakistan |
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Financials (as on) : |
31.12.2014 |
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Date of Incorporation : |
1979 |
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Com. Reg. No.: |
0006661 |
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Legal Form : |
Public Limited Company |
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Line of Business : |
Manufacturing, Processing and Sale of Food Products
(Dairy, Confectionery, Culinary, Coffee, Beverages, Infant Nutrition and
Drinking Water) |
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No. of Employees : |
4,017 |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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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) |
|
Pakistan |
B1 |
B1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
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Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
PAKISTAN - ECONOMIC OVERVIEW
Decades of internal political disputes and low levels of
foreign investment have led to slow growth and underdevelopment in Pakistan.
Agriculture accounts for more than one-fourth of output and two-fifths of
employment. Textiles account for most of Pakistan's export earnings, and
Pakistan's failure to diversify its exportshas left the country vulnerable to
shifts in world demand. Official unemployment was 6.9% in 2014, but this fails
to capture the true picture, because much of the economy is informal and underemployment
remains high. Pakistan’s human development continues to lag behind most of the
region.. As a result of political and macroeconomic instability, the Pakistani
rupee has depreciated more than 40% since 2007. The government agreed to an
International Monetary Fund Standby Arrangement in November 2008 to preventa
balance of payments crisis, but the IMF ended the Arrangement early because of
Pakistan’s failure to implement required reforms. The economy has stabilized,
it continues to underperform and foreign investment has not returned to levels
seen during themid-2000’s, due to investor concerns related to governance,
electricity shortages, , and a slow-down in the global economy. Remittances
from overseas workers, averaging more than$1 billion a month, remain a bright
spot for Pakistan. After a small current account surplus in fiscal year 2011
(July 2010/June 2011), Pakistan's current account turned to a deficit where it
remained through 2014, spurred by higher prices for imported oil and lower prices
for exported cotton. In September 2013, after facing balance of payments
concerns, Pakistan entered into a three-year, $6.7 billion IMF Extended Fund
Facility. The Sharif government has since made modest progress implementing
fiscal and energy reforms, and in December 2014 the IMF described Pakistan’s
progress as “broadly on track.” Pakistan remains stuck in a low-income,
low-growth trap, with growth averaging about 3.5% per year from 2008 to 2014.
Pakistan must address long standing issues related to government revenues and
the electricity and natural gas sectorsin order to spur the amount of economic
growth that will be necessary to employ its growing and rapidly urbanizing
population, more than half of which is under 22. Other long term challenges include
expanding investment in education and healthcare, adapting to the effects of
climate change and natural disasters, and reducing dependence on foreign
donors.
|
Source
: CIA |
NESTLE PAKISTAN LIMITED
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Registered
Address |
|
308, Upper Mall, Lahore, Pakistan |
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Tel # |
92 (42) 111-637-853 |
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Fax # |
92 (42) 35789304, 35789303 |
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a. |
Nature of Business |
Principal activity of the Company is manufacturing,
processing and sale of food products (dairy, confectionery, culinary, coffee,
beverages, infant nutrition and drinking water) |
|
b. |
Year Established |
1979 |
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c. |
Registration # |
0006661 |
In Karachi, Islamabad, Faisalabad, Multan,
Peshawar & Quetta
(1)
29th Kilometer, Lahore-Sheikhupura Road,
Sheikhupura, Punjab, Pakistan.
(2) Khanewal-Kabirwala Road, Kabirwala, District Khanewal, Pakistan.
(3) Plot No. A-23, Northwest Industrial Zone, Port Qasim, Karachi, Pakistan.
(4) Plot No. 32, Street No. 3, Sector 1-10/3,
Industrial Area, Islamabad, Pakistan.
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KPMG Taseer Hadi & Co. (Chartered Accountants) |
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The Company was incorporated as a Public Limited
Company in 1979 |
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Names |
Designation |
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Mr. Syed Yawar Ali Mr. Magdi Batato Mr. Pierre Schaufelberger Mr. John Michael Davis Mr. Syed Babar Ali Mr. Syed Hyder Ali Mr. Naveed A. Khan Mr. Faical Krichane Mr. Osman Khalid Waheed |
Chairman Managing Director Director Director Director Director Director Director Director |
|
Categories |
Percentage (%) |
|
Directors CEO / Spouses / Minors Executives Associated Co’s, Undertakings & related
parties NIT ICP Financial Institutions Insurance Companies Modaraba Companies Funds Investment Companies Joint Stock Companies Charitable Trust Foreign Investors General Public (Individuals) Locals Foreign Public Sector Companies & Corporations Others |
4.47 0.00 78.45 0.01 --- 0.98 0.01 --- 0.29 0.01 0.01 0.04 2.85 12.85 0.00 0.02 --- |
Nestle S.A. is the Holding
Company of Nestle Pakistan Limited
Principal activity of the Company is
manufacturing, processing and sale of food products (dairy, confectionery,
culinary, coffee, beverages, infant nutrition and drinking water).
4,017
Annual Capacity Actual Production
2014 2013 2014 2013
----------------------------Metric
Tons------------------------
Liquid Products -
Liters (000) 1,528,374 1,461,735 867,734
848,124
Non-liquid Products Kgs
(000) 178,261
182,188 120,128 88,335
Under utilization of capacity was mainly due
to seasonality impact of fresh milk and increase in capacity through new
investment to meet future requirement.
|
Years |
In Pak Rupees |
|
2013 2014 |
86,226,869,000/- 96,457,743,000/- |
|
Mainly exist at major cities of Pakistan |
(1) Faysal Bank
Limited, Pakistan.
(2) Citibank N.A., Pakistan.
(3) Deutsche Bank A.G., Pakistan.
(4) Habib Bank Limited, Pakistan.
(5) MCB Bank Limited, Pakistan.
(6) Standard Chartered Bank, Pakistan.
(7) United Bank Limited, Pakistan.
(8) National Bank of Pakistan.
(9) Allied Bank Limited, Pakistan.
(10) Barclays Bank PLC,
Pakistan.
The year 2014
continued to be a challenging year with adverse security situation coupled with
uncertainties around the political environment and ongoing energy crisis
resulting in regular disruptions of business. Despite all these challenges, the
Company reported a top line growth of 11.9% way ahead of the country’s GDP. The
Company also improved on its gross margins by 30 bps. The growth was fuelled by
effective product mix management, optimisation of our value chain through
Nestlé Continuous Excellence (NCE) initiatives and processes, enabling us to
continue investing behind our brands. Nestlé Pakistan continues to be committed
to enhancing its product base through innovation and renovation which remains
an integral part of the Company’s vision
to positively enhance the quality of life. The major new product launches
during 2014 included: NESCAFÉ CHILLED LATTE, Nestlé FRUITA VITALS Orange and
Carrot, MAGGI Chicken Tikka, NESTEA Cardamom Chai and renovation of Nestlé
MILKPAK packaging. Moreover, the Pakistan Safe Milk movement driven by Nestlé
MILKPAK has helped the consumers make a safe choice.Total sales grew by 11.9%
to PKR 96.5 billion, with growth coming from both increased volumes and selling
prices. The Gross Profit (GP) margin has improved by 30 bps as compared to last
year due to positive volume growth, optimal product mix and effective control
on total delivered cost through the NCE mindset. The Company continued to
invest behind its brands. With continuous focus on operational costs together
with the appreciation of the Pakistani rupee, the Company’s Net Profit margin
has increased by 140 bps.
Despite the
challenges being faced in the country, we are confident of the strong potential
of Pakistan and we believe it will continue to offer huge investment potential driven
by its growing population. We are hopeful that economic prospects of the
country will improve in the future. Nestlé is committed to Pakistan and will
continue to enhance the quality of life by bringing products that promote
Nutrition, Health and Wellness.
Federation Pakistan Chamber of Commerce & Industry.(FPCCI)
|
Currency |
Unit |
Pakistani Rupee |
|
US Dollar |
1 |
Rs. 102.50 |
|
UK Pound |
1 |
Rs. 158.75 |
|
Euro |
1 |
Rs. 114.25 |
Subject Company enjoys good reputation in Pakistan as well as in abroad. Directors of
the Company are reported as qualified, experienced and resourceful businessmen.
Payments are usually correct and as per commitments. 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.63.84 |
|
|
1 |
Rs.100.65 |
|
Euro |
1 |
Rs.72.88 |
INFORMATION DETAILS
|
Analysis Done by
: |
RAS |
|
|
|
|
Report Prepared
by : |
TPT |
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 |
Capability to overcome financial difficulties seems comparatively
below average. |
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 |
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-- |
NB |
New Business |
-- |
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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.