Press Release

VIS Upgrades Entity Ratings of Century Paper & Board Mills Limited

Karachi, November 10, 2021: VIS Credit Rating Company Limited (VIS) has upgraded the entity ratings of Century Paper & Board Mills Limited (CPBM) to ‘ÁA-/A-1’ (Double A Minus/ A-One) from ‘A+/A-1’ (Single A Plus/A-One). Long term rating of ‘AA-’ signifies high credit quality with strong protection factors. Risk is moderate but may vary slightly from time to time because of economic conditions. Short-term rating of ‘A-1’ depicts high certainty of timely payment where liquidity factors are excellent and supported by good fundamental protection factors. Outlook on the assigned rating has been revised from ‘Positive’ to ‘Stable’. Previous rating action was announced on December 01, 2020.

Upward revision in ratings reflects strong sponsor profile (majority shares held by Lakson Group), low business risk and CPBM’s leading market position in coated board segment. Ratings also incorporate improvement in financial profile with consistent growth in sales, higher margins, sound coverages and reduction in leverage indicators on a timeline basis led by growing equity base. Given the relatively stable demand for coated board and expected growth in the segment, CPBM has achieved higher capacity via modifications in existing plant & machinery along with quality & efficiency enhancement initiatives. Ratings also factor in further BMR activities planned for capacity enhancement of paper and board machines, and power and utilities.

After contracting by 6% in FY20, the market size of paper & paperboard industry increased by 3.5% in FY21 on account of gradual improvement in demand. Gradual contraction of imports of coated board along with other benefits (such as availability and lower lead-time to customers) provides support to local industry players. End clients mostly belonging to FMCG segment reduces the demand risk where the demand is relatively stable. In addition, COVID-19 crisis has affected consumers’ consumption patterns and health consciousness which has favorably impacted the packaging industry over medium to long term.

The management envisages consistent financial performance on the backdrop of higher projected industry demand and cost-efficiencies post expansion. Despite projected increase in debt levels to finance BMR, gearing and leverage levels are expected to remain within manageable levels on the back of expansion in equity base through profit generation. Ratings remain dependent on attaining projected sustainability in profitability, maintaining strong liquidity and overall debt servicing ability, going forward.

For further information on this rating announcement, please contact Ms. Asfia Aziz or the undersigned (Ext. 306) at 021-35311861-70 or email at

Faryal Ahmad Faheem
Deputy CEO

Applicable Criteria: Industrial Corporates (August 2021)

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2021 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

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