Karachi October 06 2021: The Board of Directors of Ghani Chemical Industries Limited (GCIL),one of the subsidiary Companies of the Ghani Global Holding, and the largest manufacturer of medical and industrial gases in Pakistan, has decided to make an Initial Public Offering (IPO) of Ghani Chemical Industries Limited, at the Strike Price to be determined through Book Building Process.
The funds raised from the IPO will be used for the setting-up of two state-of-the-art chemical plants for manufacturing of Citric Acid (import substitute) and Sulphuric Acid in Alama lqbal Industrial City, Faisalabad. with an approximate cost of PKR 8.5.
After the ensuing financial structuring and the IPO. GGL shall come to hold more than 50% equity in the listed GCIL with an expected valuation cap of GGL' holding is PKR 13 billion.
As a major breakthrough, after long term sales contract of 5 years with Attock Renery, the subsidiary company has succeeded to enter into long- term sales contract for a period of 15 years with Engro Polymer & Chemicals Limited, Port Qasim, Karachi and supply against this contract is expected to be commence during second quarter of nancial year.
To meet the expected increase in demand of industrial and medical gases the subsidiary is setting up its 4th ASU plant in Port Qasim.
Ghani Chemical has decided, to setup an additional manufacturing plant of 275MTPD capacity for medical and industrials gases at Hattar Economic Zone, District Haripur, Khyber Pakhtunkhwa (KP).
This decision has been made to respond to the national cause of overcoming the growing shortage of Oxygen in hospitals, and especially as a result of the recent EOI published by the Khyber Pakhtunkhwa Economic Zones Development & Management Company. The added capacity shall ensure consistent supply of Oxygen to the hospitals in KP and Northern regions of the
country with the spirit of combating COVID-19 emergencies besides meeting the industrial requirements of CPEC projects.
Land for this project is already available with our subsidiary in Hattar Economic Zone. Approximate investment size of this project shall be PKR 2.00 billion (US$ 13Mn), and completion target has been set for September 2022. Detailed nancial plans for this expansion phase will be released in next few weeks' time.
With this expansion, the Company shall have a total of ve manufacturing plants, more than any other producer, at separate strategic locations of three provinces of the country. The disbursing of manufacturing locations would enable the Company to cater to the requirement of the entire country with better logistical and distribution
The added capacity shall ensure not only consistent supply of fast growing demand of Oxygen to the hospitals in KP and Northern regions of the country but also meeting the increasing demand of gases for development projects by
Government and for industrial requirements of CPEC projects.
This subsidiary (being one of the largest manufacturer of industrial and medical gases in Pakistan) played a vital role to meet the increased demand of Medical Oxygen for COVID pandemic with close liaison with Government departments and Hospitals.
To meet the requirements of funds for repayment of borrowings and working capital, the board of directors of this subsidiary during December 2020, decided to increase paid up capital of the Company for Rs. 385.250 million by further issue of 38.525 million ordinary shares i.e. 33.5% right shares at par value of Rs. 10 per share. In compliance with special resolution passed by the shareholders of Ghani Global Holdings Limited (GGL) in Extra-Ordinary General Meeting held on September 05, 2020, the GGL (being majority shareholder) declined to subscribe this right issue. Thereafter the board of directors of this subsidiary offered the declined portion of right issue to other existing shareholders and employees of this subsidiary and its associated company.
Ghani Chemical Industries Limited (GCIL) is engaged in manufacturing and sale of industrial and medical gases and chemicals.
Sales and end result performance of Ghani Chemical has considerably increased as compared with the same period of last year.
Annual sales of the company for the year ended June 2021, closed at Rs. 4,350 million as compared to last year June
2020, sales of Rs. 2,330 million which is showing tremendous increase of 86.5%. Gross prot has jumped from Rs. 494 million to Rs. 1,657 million showing increase of Rs. 1163 million, depicting an increase of 236%, in terms of percentage it has improved from 24% to 43%, due to increase in sales volume as well as increase in average selling price of the products. Distribution expenses and administrative expenses also decreased in terms of percentage to sales from 12% to 8%, and 6% to 4%, respectively. Company's operating prot year ended June, 2021, is amounting to Rs. 1,175 million as compared to last year's operating prot of Rs. 97 million showing increase of Rs. 1,077 million, depicting increase of 1,110%. Financial cost of the company also decreased from Rs. 320 million to Rs. 208 million showing decrease of 35%, having positive impact on the bottom line protability of the company. Net prot of the company has jumped from loss of Rs. 160 million to prot of Rs. 691 million i.e in terms of percentage from net prot ratio of -8% to 18%. Accordingly, EPS of company has increased from Rs. (1.22) to Rs.4.88.
Company is managing its repayments against the long term loans timely. Return on capital employed has improved from 3% to 28%. Financial, Current ratio of the company has improved from 0.72 to 1.03. Debtors days has also improved i.e. debtors days decreased from 97 days to 56 days. Short term borrowing of the company has been reduced by Rs. 455 million i.e. from Rs. 1,292M in June 2020 to Rs. 837 million in June 2021. Debt equity ratio also improved from 55:45 to 43:57.