Riyadh: Tassnief has assigned long-term national scale entity rating from “(BBB-)’’ (Triple B Minus) and a short-term entity rating of “T-4” to ASG Plastic Factory Company (‘‘ASG” or ‘‘the Company’’). The assigned ratings reflect adequate creditworthiness, thus low credit risk. Risk profile may exhibit moderately high variation with changes in economic / sector conditions.

Rating Rationale: The ratings assigned to ASG take into account its long operating track record in the Saudi plastics manufacturing sector, diversified product portfolio, strengthening manufacturing scale, and conservative financial policy. The Company has demonstrated sustained, volume-led revenue growth, healthy profitability, and low customer concentration risk, while maintaining a largely unlevered balance sheet. These strengths are partly offset by exposure to competitive pricing pressure in commoditized product segments, an inventory-intensive operating model that lengthens the working capital cycle, and execution risk associated with ongoing capacity expansion.

Business profile of ASG is underpinned by a long and established operating track record, having operated in the Saudi plastics manufacturing sector since 2005. Over time, the Company has demonstrated an ability to scale operations and adapt to changing market conditions, as evidenced by its strong growth trajectory and expanding production footprint. Revenue has grown significantly over the past several years, supported by capacity additions, broader SKU launches, and deeper penetration across both the plastic packaging and fitting pipes segments. Competitive advantages include scale efficiencies, local sourcing of raw materials at competitive pricing, rapid delivery capabilities in key regions, and tariff protection against certain imports. Customer concentration risk is low at the consolidated level.

Financial risk profile is conservative and supported by healthy profitability, positive cash flow generation, zero gearing, and low total-liabilities-to-equity ratio. The Company has maintained healthy gross margins despite pricing pressure, benefiting from volume growth, favorable segment mix, and economies of scale, while near-term margin softness is expected in 2025 due to new product launches and some pressure on pricing. Liquidity is assessed as adequate, underpinned by positive operating cash flows, disciplined procurement planning, and daily liquidity monitoring, although the working capital cycle has lengthened due to higher inventory levels linked to expansion and delivery reliability. Capitalization remains a key strength, with no debt on the balance sheet and ongoing capex expected to be funded primarily through internal cash generation, supplemented by limited long-term financing, keeping leverage ratio low over the rating horizon.

Rating Triggers: Ratings are dependent on ASG’s ability to achieve material growth in scale while maintaining healthy profitability, adequate liquidity, and a conservative capital structure. Key considerations include effective execution and absorption of ongoing capacity expansion, sustained demand across core segments, disciplined working capital and inventory management, and preservation of prudent financial policies amid competitive pricing pressures.

About the Company: ASG Plastic Factory Company, referred to as "ASG" or "the Company" is a Joint Stock Company registered in the Kingdom of Saudi Arabia under the commercial registration number 1126002230 and national unified number 7001660146 dated April 29, 2015. ASG manufactures plastic boxes and cartons, plastic bottles of various shapes, and single-use household, kitchen, and decorative items. Its wholly owned subsidiary, ASK Pipes Company (“ASK Pipes”), in involved in manufacturing of plastic pipes, hoses and tubes along with fitting accessories, household appliances, kitchenware, and disposable decorative items.

For further information on this rating announcement, please contact the senior rating analyst Mr. Talha Iqbal (Ext. 6627) at +966-112506627 or email at RS@Tassnief.com.

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