Press Release
VIS Reaffirms Entity Rating of Millac Foods (Private) Limited
Karachi, April 30, 2026: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Millac Foods (Private) Limited (‘Millac’ or the ‘Company’) at ‘A-/A2’ (Single A minus/ A two). Medium to long term rating of 'A-' indicates Good credit quality; Protection factors are adequate. Risk factors may vary with possible changes in the economy. Short term rating of 'A2' indicates Good likelihood of timely repayment of short-term obligations with sound short-term liquidity factors. Outlook on assigned ratings remains ‘Stable’. Previous Rating action was announced on February 06, 2025.
Millac is principally engaged in processing and marketing of milk food products. The assigned ratings reflect Millac’s strong positioning in Pakistan’s dairy sector, particularly as a leading local player in the bulk milk powder segment. The Company benefits from a diversified product portfolio across industrial and retail segments, with increasing contribution from higher margin retail sales supporting profitability. During the review period, margins have improved on the back of a favorable sales mix and cost efficiencies, while the business profile is supported by Pakistan’s large milk production base and growing demand. However, structural challenges in the sector persist, including its largely informal nature, low penetration of packaged milk, and exposure to pricing pressures from taxation and competition, particularly in the retail segment.
The ratings also draw comfort from the Company’s conservative capital structure, reflected in low leverage, absence of long-term debt, and sponsor support through interest-free short-term loans. Liquidity remains sound, supported by an efficient working capital cycle and adequate coverage metrics. Governance practices remain relatively informal, given the absence of a formal board and independent oversight reflecting room for improvement. Ongoing ERP implementation is expected to enhance internal controls and reporting. Going forward, sustaining margin improvement, expanding retail presence, and maintaining conservative capitalization profile will remain important from ratings perspective.
For further information on this ratings announcement, please contact on 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria:
VIS Rating Criteria: Industrial Corporates
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf