Press Release
VIS Reaffirms Entity Ratings of Gamalux Oleochemicals Limited
Karachi, October 17, 2025: VIS Credit Rating Company Limited (VIS) reaffirms entity ratings of Gamalux Oleochemicals Limited (“GOL” or “the Company”) at 'A-/A2' (Single A minus/A Two) with a “Stable” outlook. 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 'A2' indicates a good likelihood of timely repayment of short-term obligations with sound short-term liquidity factors. Previous rating action was announced on August 26, 2024.
Gamalux Oleochemicals Limited (‘GOL’ or ‘the Company’) was established in 2000 as a Private Limited Company and transitioned into a public limited company (Unlisted) in May 2021. The Company's primary operations involve managing and running facilities for oleochemicals production, distillation, and soap making for sale to bulk buyers and retailers. Also, GOL supplies raw materials to soap manufacturers (B2B), produces its own consumer products for beauty and laundry soaps (B2C), as well as undertakes toll manufacturing. GOL also exports its products to UAE and Uzbekistan.
The assigned ratings take into account the business risk associated with the domestic oleochemical industry, moderated by the Company’s diversified product portfolio and its demonstrated ability to adjust production and sales mix in response to changing demand trends. The Company continues to benefit from stable demand for fatty acids and glycerin, which underpins its revenue base and contribute significantly to profitability, though challenges persist in the laundry soap segment due to evolving consumer preferences towards detergent powder. The sale of soap noodles has declined as several downstream buyers have shifted to toll manufacturing arrangements instead of procuring soap noodles. The Company’s continued focus on operational efficiency, product diversification, and toll manufacturing partnerships provides resilience against input cost volatility and currency pressures inherent in the sector.
Financial risk profile indicates moderate improvement, driven by a stronger equity base and low leverage, although reliance on short-term borrowings remains significant due to high working capital requirements. Liquidity is considered adequate, supported by continued access to banking lines, though timely recovery of trade receivables remains important. Debt coverage indicators are adequate, reflecting the Company’s capacity to service obligations from its operating cash flows, albeit with sensitivity to margin fluctuations.
Going forward, improvement in the Company’s profitability profile and working capital management remains imperative for maintaining the assigned ratings.
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