Press Release

VIS Credit Rating Company Maintains Entity Ratings of Lucky Core Industries Limited (Formerly ICI Pakistan Limited)

Karachi, July 10, 2023: VIS Credit Rating Company Limited has maintained entity ratings of Lucky Core Industries Limited (Formerly ICI Pakistan Limited) (‘LCI’ or ‘the Company’) at ‘AA/A-1+’ (Double A/A-One Plus) with ‘Rating Watch-Developing’ status. The medium to 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. The short-term rating of ‘A-1+’ signifies highest certainty of timely payments; short-term liquidity including internal operating factors and/or access to alternative sources of funds is outstanding and safety is just below risk free Government of Pakistan’s short term obligations. The previous rating action was announced on June 30, 2022.

Incorporated in 1952, LCI is engaged in the manufacture of polyester staple fibre, soda ash, specialty chemicals, sodium bicarbonate and polyurethanes; marketing of seeds, manufacturing and distribution of pharmaceuticals and animal health products; and merchanting of general chemicals and manufacturing of Masterbatches. Assigned ratings incorporates LCI’s strong financial profile and diversified presence of the Company’s sponsor, Yunus Brothers Group (YBG) which is a leading conglomerate having presence across multiple sectors including Cement, Power, Real Estate, Textiles, Chemicals, Pharmaceuticals, Healthcare, Food and Automotive Sectors. Business risk profile of the Company is considered well-diversified with minimal inter-dependence between segments. Ratings take into account LCI’s market leadership position in the soda ash segment, second largest market share in polyester segment, low business risk profile of the pharmaceuticals segment, and sizeable growth potential in the animal health and chemicals and agri-sciences divisions. While all business segments remain exposed to adverse economic conditions, ratings continue to derive strength from the diversity across industries, existence in businesses/products which are essential to the needs of local customers and supported by historical track record of sustained profitability.

Assessment of financial risk profile depicts a steady increase in gearing and leverage indicators on the back of increased short term borrowings resulting from higher working capital requirements of all business segments on account of local currency devaluation, increase in commodity prices and supply chain disruptions. However, cash flow coverage indicators remain comfortable and in line with assigned ratings. Going forward, given the financing requirement for expansion projects along with planned acquisition, we may expect gearing levels to increase. Short term rating remain sensitive to maintenance of short term liquidity metrics in line with assigned ratings.

During the year under review, LCI divested its partial stake of 26.5% in NutriCo Morinaga, now an associate company engaged in manufacturing, marketing and distributing formula products, booking a sizeable gain of Rs.9.8bn. In addition, LCI, through its newly established wholly owned subsidiary ‘Lucky Core Ventures (Private) Limited (LCV)’ is in process of acquisition of 75.01% stake in Lotte Chemicals Limited, subject to receipt of requisite regulatory approvals and fulfilment of other conditions pursuant to the Share Purchase Agreement. On account of this impending acquisition, ratings have been placed on “Rating watch-Developing” status. VIS will review the ratings on completion of the same.

For further information on this rating announcement, please contact Mr. Shaheryar Khan (Ext: 209) or the undersigned (Ext. 207) at 021-35311861-64 or email at

Sara Ahmed

Applicable Rating Criteria: Industrial Corporates (May 2023)

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 2023 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .