Nimir Chemicals makes Rs3bn bet on imports, exports

The company will enter animal nutrition, expand its chlorinated paraffin wax operations and move an oleochemicals plant to Hub, with the investments expected to begin contributing from FY2028 Nimir Industrial Chemicals is preparing to spend Rs3 billion on three manufacturing projects intended to take the company into a new product category, expand a recently established business and give its oleochemicals division better access to customers and export markets in southern Pakistan. The company's board approved the capital expenditure at a meeting on September 9, according to a disclosure filed with the Pakistan Stock Exchange. The programme comprises a new palmitic acid plant, an expansion of Nimir's chlorinated paraffin wax and chlorine-liquefaction facilities, and the relocation of one oleochemicals plant from Sheikhupura to Hub in Balochistan. Nimir expects the projects to begin producing financial benefits from fiscal year 2028. Taken together, the projects offer a reasonable summary of Nimir's broader growth strategy: manufacture locally what Pakistan currently imports, expand products for which domestic demand has already been demonstrated, and position some capacity closer to the country's principal seaports. The palmitic acid facility represents the most explicit diversification. Nimir said the product is used in animal nutrition, particularly for milking cows, and will create an entirely new business line. The company also intends to introduce additional products in the segment, suggesting that the proposed plant may eventually serve as the foundation for a broader portfolio of animal-nutrition ingredients rather than remain a single-product operation. For Nimir, that is a relatively natural extension. The company already processes palm-based raw materials into oleochemicals including soap noodles, stearic acid, glycerine, hydrogenated oils and distilled fatty acids. It says it can manufacture more than 120,000 tonnes of soap noodles and 20,000 tonnes of stearic acid annually, supplying both the domestic and export markets. Palmitic acid therefore introduces a new customer base, but not an entirely unfamiliar manufacturing discipline. The second component of the investment doubles down on a market Nimir helped localise only recently. The company will expand its chlorinated paraffin wax, or CPW, plant and the chlorine-liquefaction facility that supplies its principal feedstock. CPW is an industrial chemical commonly used in products such as PVC, cables, paints, sealants and lubricants. Nimir describes itself as Pakistan's only domestic producer of CPW. Its existing plant, commissioned alongside chlorine-liquefaction capacity in 2023, has reported capacity of approximately 11,000 tonnes a year. The company says demand has risen significantly since the product began being manufactured locally and expects that growth to continue. Expanding the chlorine operation alongside CPW is important: it gives Nimir greater control over the availability of a critical input rather than merely adding downstream capacity. The third project is less about adding a product than putting production in a better location. Nimir plans to shift one of its oleochemicals plants from Sheikhupura to Hub. The company's main industrial complex is located at Bhikhi on the Sheikhupura-Faisalabad Road, an excellent position for serving Punjab's manufacturing base but a considerable distance from Karachi's ports. A Hub facility would place Nimir closer to customers in Karachi and southern Pakistan while reducing the distance between part of its production base and the seaborne trade on which chemical manufacturers depend. The company explicitly expects the relocation to support local demand and improve export opportunities through easier access to sea routes. Crucially, Nimir is moving only one oleochemicals plant; the announcement does not suggest that it is abandoning its much larger Sheikhupura complex. The scale of the investment is meaningful. Nimir reported net revenue of Rs48.3 billion for the year ended June 2026, up 6.7% from Rs45.3 billion a year earlier. Net profit rose 18.3% to Rs2.39 billion, while earnings per share increased from Rs18.29 to Rs21.64. Gross profit margins improved to 15.7%, and lower finance costs helped strengthen the bottom line. At Rs3 billion, the new capital programme is larger than Nimir's entire latest annual profit and equal to roughly 26% of its June 2026 shareholders' equity. It is also more than five times the approximately Rs549 million the company spent on fixed assets and capital work-in-progress during the year. The announcement does not specify how the projects will be financed, how the Rs3 billion will be divided between them or the additional production capacity each will create. Those omissions matter because Nimir remains a working-capital-intensive manufacturer. At June 2026, it had Rs14.3 billion in short-term borrowings and generated Rs1.36 billion in operating cash flow during the year. The two-year period before earnings begin to arrive will therefore require careful management of construction costs, imported machinery, raw-material prices and financing. Still, expansion is hardly unfamiliar territory for Nimir. Incorporated in 1994 as Ravi Alkalis, the company entered oleochemicals in 2000, soap noodles in 2007, large-scale soap finishing in 2014, aerosols in 2020 and CPW in 2022. A management buyout in 2011 was followed by repeated investment in new products and capacity. The latest Rs3 billion programme continues that pattern—but now with a clearer emphasis on exports, southern Pakistan and higher-value specialised chemicals.