Press Release
VIS Reaffirms Entity Ratings of Century Paper & Board Mills Limited
Karachi, May 22, 2025: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Century Paper & Board Mills Limited (‘CPBML’ or the ‘Company’) at ‘AA-/A1’ (Double A Minus/ A One). Long term rating of ‘AA-’ signifies high credit quality; protection factors are strong. Risk is modest but may vary slightly from time to time because of economic conditions. Short-term rating of ‘A1’ depicts strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. Outlook on the assigned rating is ‘Stable’. The previous rating was announced on February 26, 2024.
CPBML, the flagship company of the Lakson Group is involved in the manufacturing of a wide range of paper and board products, including coated and uncoated boards, writing and printing papers, machine-glazed papers, and superior quality corrugated cartons capacity. The Company focuses on sustainability through recycled fiber usage and energy-efficient processes. Its operations are supported by an Oracle-based ERP system. CPBML’s established market position is bolstered by integrated operations, product diversity, and its affiliation with the Lakson Group.
The business environment remained challenging, driven by inflation, raw material cost volatility, and persistent import competition. These factors contributed to demand contraction and reduced sales volumes across core segments. Industry-wide pricing pressures and limited ability to pass on rising costs led to margin compression. Additionally, operational cash flows were adversely affected by declining sales, elevated input costs, and higher working capital requirements resulting from extended inventory holding. Profitability was further impacted by rising finance costs amid a high-interest rate environment; however, these costs are expected to ease as interest rates begin to decline. Looking ahead, the recovery in profitability will hinge on improved capacity utilization, enhanced cost efficiencies, a rebound in industry demand, and greater reliance on locally sourced inputs.
For further information on this rating announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria: Corporates
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf