Press Release

VIS Reaffirms Entity Ratings of Ittehad Chemicals Limited

Karachi, April 02, 2024: VIS Credit Rating Company Limited (VIS) reaffirms entity ratings of Ittehad Chemicals Limited at 'A-/A-2'. 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 'A-2' indicates good certainty of timely payment. Liquidity factors and company fundamentals are sound. Access to capital markets is good. Risk factors are small. Outlook on the assigned ratings remains Stable. Previous Rating action was announced on March 30, 2023.

Ittehad Chemicals Limited (“ICL” or “the Company”), is one of the major corporates in Pakistan's chemical industry operating since 1991. The Company has its origin in United Chemicals, which was set up in 1962 in the private sector, nationalized in 1971, and was subsequently privatized in 1995. Majority ownership lies with the Chemi Group of Industries, which also has interest in other chemical businesses and real estate sector. The Company operates as a manufacturer and seller of caustic soda and various other chemicals. With manufacturing facilities located at Kala Shah Kaku and head office in Lahore, ICL has expanded its product line to meet both local and the international market. In recent developments, ICL commissioned a new LABSA-SLES plant and adjusted its production in response to market demands.

Assigned ratings incorporates the medium to low business risk profile of ICL, supported by its moderate cyclicality, high barrier to entry owing to capital-intensive nature of the industry. A significant market share in Pakistan’s chemical industry also provide assurance to the assigned ratings. Additionally, a strong clientele with major multinationals further provide comfort to the ratings.

The ratings also consider the financial risk profile of the Company buoyed by its notable growth in topline primarily due to higher selling prices and improvement in export sales, particularly of calcium chloride. Significant revenue growth translated into higher gross and net margins, despite substantial increase in operating expenses and finance costs. The coverage profile also strengthened on account of higher profitability and efficient operations during the year. Capitalization metrics improved on account of higher equity base owing to retention of profits while the liquidity metrics commensurate with the assigned ratings.

Going forward, ratings will remain sensitive to the maintenance of company’s overall debt profile on account of its upcoming CAPEX plans.

For further information on this ratings announcement, please contact at 021-35311861-64 or email at

Applicable Rating Criteria:
Industrial Corporates
VIS Issue/Issuer Rating Scale

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