Press Release

JCR-VIS Assigns Entity Ratings of A-/A-2 with a Stable Outlook to JDW Sugar Mills Ltd

Karachi, May 2, 2008: JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned initial medium to long term entity rating of ‘A-’ (Single A Minus) and short-term rating of ‘A-2’ (A-Two) to JDW Sugar Mills Limited (JDW). Outlook on the medium to long term rating is ‘Stable’.

The assigned ratings take into account the consistently high sucrose recovery rates and the management’s focus on supply side dynamics. JDW has nurtured relationship with farmers through timely payment of dues, encouraging sugarcane cultivation in the coming years. Furthermore, associated corporate farms are expected to provide almost one-third of the raw material over the long term, while currently almost 20% of the sugarcane procured is coming from these. The company has a core team of professionals responsible for technical and financial management.

During the last two years, the company leveraged itself to make acquisitions, which had placed a strain on cash flows. JDW has two subsidiaries and the combined produce of the three plants positions the group as one of the largest sugar producing concern. Ratings of JDW take into account the sponsors’ plan to merge the subsidiaries with JDW, bringing in considerable economies of scale. Pricing power remains limited with producers in the local context, though the export market provides an alternative avenue.

Results of all three plants in the current season have been encouraging. Ratings incorporate the expected improvement in cash flow coverages and profitability position of the company. Debt levels are projected to decline going forward while the company is also considering re-profiling of existing long term debt. Accumulation of liquid reserves on balance sheet can mitigate any cash flow stress.

For further information on this rating announcement, please contact Mr. Safdar Kazi ( or Ms. Sobia Maqbool ( at 5311861-70 (10 lines) or fax to 5311873.

Faheem Ahmad
President & CEO

Information herein was obtained from sources believed to be accurate and reliable; however, JCR-VIS Credit Rating Company Limited (JCR-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. JCR-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. JCR-VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings. JCR-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 2008 JCR-VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to JCR-VIS.

JCR-VIS Credit Rating Company Limited