Press Release
VIS Maintains Entity Rating of Frontier Foundry Steel Limited
Karachi, September 16, 2026: VIS Credit Rating Company Limited (VIS) has maintained the medium to long-term rating of Frontier Foundry Steel Limited (“FFSL” or “the Company”) at ‘A/A1’ (Single A /A One). Medium to long term rating of ‘A' indicates good credit quality; Protection factors are adequate. Risk factors may vary with possible changes in the economy. Short term rating of 'A1' indicates a strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. Outlook on the assigned ratings changes from ‘Stable’ to ‘Positive’. Previous rating review was conducted on June 23, 2025.
Frontier Foundry Steel Limited, operating under the brand name FF Steel, was incorporated in Pakistan in 1986 as a private limited company and was converted into an unlisted public limited company in 2023. FFSL is principally engaged in the manufacturing and sale of deformed steel bars, including Grade-60 and Grade-80 bars, with products manufactured in line with international standards. The Company operates two steel manufacturing units located in Lahore and Peshawar, with annual production capacities of 252,000 tons and 144,000 tons, respectively. Owing to its strategic location in Central Punjab, the Lahore plant efficiently caters to the existing market demand while delivering economies of scale in both production and freight costs. The Peshawar manufacturing facility is currently non-operational and is being relocated to Karachi with more than 60% energy requirements planned to be met through renewable sources i.e., Solar and Wind. The planned relocation will take around 18 months and the plant are expected to commence operations from Karachi in June 2028. This timeline indicates that the impact from this relocation will be available towards the end of the rating horizon at best and therefore has not been factored into the current rating. In addition, FFSL operates an export-oriented copper ingot production unit located in Gujranwala.
The assigned ratings reflect Company’s established track record in the long steel segment, supported by its manufacturing operations in Lahore. During FY25, the Company maintained a satisfactory operating profile despite subdued construction-linked demand and competitive pressures in the long steel market. Profitability and coverage indicators remained moderate, even though borrowings reduced significantly due to lower working capital requirement in line with lower sales and rationalized receivables. FFSL’s financial performance improved during FY26, supported by margin recovery leading to stronger internal cash generation. The long-term debt also remained manageable, aligned with the strategic gradual shift to renewable energy, with the new long-term financing availed only for the solar projects at Lahore. 15MW Solar has been energized at Lahore plant with further expansion in full swing to achieve the targeted capacity of 43MW in coming 6-8 months. Coverage indicators also improved, supported by higher funds from operations and reduced debt servicing pressure. The Company’s ongoing investment in solar energy is expected to support operating efficiency and margins over the medium term.
Going forward, the ratings remain sensitive to FFSL’s ability to sustain profitability, maintain prudent leverage while increasing volumes, manage cost volatility and preserve working capital discipline. Continued improvement in financial performance, successful execution of the Karachi expansion and realization of planned energy cost efficiencies will remain important rating considerations. Potential supply chain disruptions due to the volatile situation in West Asia will also continue to be monitored.
For further information on this rating announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria:
Corporate Rating
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf