Ratings of Sitara Chemical maintained at AA-, A-1

KARACHI (September 08 2010): JCR-VIS Credit Rating Company Limited (JCR-VIS) has maintained the medium to long-term entity rating of Sitara Chemical Industries Limited (SCIL) at ‘AA-‘ (Double A Minus) and short-term rating at ‘A-1’ (A-One). The market dynamics of the caustic soda industry have experienced a change in competitiveness with the entry of a new player.

The additional capacity added has eased off the supply side significantly thus bringing down the capacity utilisation of the older players including SCIL. Consequently, revenues, margins and market share of SCIL have been adversely affected. With modest growth in demand, excess supply and its consequent impact on margins is likely to persist in near future. In view of altered market dynamics of the industry, outlook on the assigned rating has been revised to ‘Negative’.-PR  -Brecorder