Ambe Cement Private Limited long term and short term bank facility worth Rs 99.5 crore graded by Care Ratings Nepal

CARE Ratings Nepal Limited (CRNL) has reaffirmed rating of ‘CARE-NP BBB-’ assigned to the long term bank facilities worth Rs 45 million and ‘CARE-NP A3’ assigned to the short-term bank facilities of Ambe Cement Private Limited (ACPL) worth Rs 950 million .

The ratings assigned to the bank facilities of ACPL continue to derive strength from the established track record of operations and moderate financial and operational performance of the company coupled with moderate level of capital structure and debt service coverage indicators during FY19 (audited, refers to 12 months period ended mid-July 2019).

The rating also factors in continuous enhancement of the capacity & addition of new machinery, product diversification and own brand, demand of cement products in the country along with strong promoters being part of Ambe Group of Companies and experienced management team in the related field.

The ratings are, however, constrained by lack of backward integration and raw material price volatility risk, working capital intensive nature of operations, exposure to volatile interest rates and presence in highly fragmented and competitive nature of cement industry. The ability of the company to manage growth in operations & maintaining the profit margins by passing through changes in raw material prices to the customers along with rationalization of its debt through efficient working capital management would be the key rating sensitivities.

Ambe Cement Private Limited (ACPL) is a private limited company, established in 2004, promoted by the individuals involved in manufacturing industry and trading business, for setting up clinker grinding plant at Parsa District of Nepal. The company is engaged in manufacturing and selling of cement with grinding capacity of 1000 metric tons per day (MTPD). ACPL manufactures Portland Pozzolana Cement (PPC), Ordinary Portland Cement (OPC) and Portland Slag Cement (PSC) cement under ten different brands.

Source: careratingsnepal.com