Press Release

VIS Assigns Initial Entity Rating to Millac Foods (Private) Limited

Karachi, February 06, 2025: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of A-/A2 (Single A-minus/A-Two) to Millac Foods (Private) Limited (‘Millac’ or the ‘Company’). 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 Good likelihood of timely repayment of short-term obligations with sound short-term liquidity factors. Outlook on the assigned ratings is Stable.

Incorporated in 1999, Millac Foods (Pvt) Ltd is principally engaged in processing and marketing of milk food products, operating mainly in wholesale. The Company’s manufacturing plant of milk powder division is located in Raiwind, Lahore while plant of liquid division is situated in Korangi Industrial Area, Karachi. Millac’s shareholding structure is entirely family-owned.

The ratings take into account the Company’s medium to low business risk profile of the industry, where Millac stands as the leading local player in the bulk market for powdered milk. In the retail segment, Millac faces competition from well-established brands. However, its primary focus on the bulk market —characterized by limited competition—has enabled the company to secure a strong market position and drive consistent growth in its topline over the years.

The ratings also reflect the company’s conservative capital structure, supported by sound debt coverage profile. Liquidity indicators are deemed satisfactory and align with the assigned ratings. Nonetheless, the ratings are constrained by the Company’s small equity base and family-controlled governance structure. Moving forward, sustaining the upward trend in profitability indicators, improvement in corporate governance framework, and maintenance of capitalization profile will remain critical for ratings.

For further information on this ratings announcement, please contact on 021-35311861-64 or email at info@vis.com.pk.

Applicable Rating Criteria:

Industrial Corporates
https://docs.vis.com.pk/docs/CorporateMethodology.pdf

VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

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 February 06, 2025 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.