The credit rating of Polyplast JSC (hereinafter, the Company) is determined by its very strong market position, strong business profile, adequate level of corporate governance, large business size, high profitability, and strong liquidity. The low coverage and very low score for cash flow have a constraining effect on the credit rating.
Polyplast JSC is a Russian chemical company, the absolute leader in the market of plasticizing additives in Russia and the CIS. The Company includes eight manufacturing assets, four research and technical centers, and more than thirty sales offices located in all major regions of the country.
KEY ASSESSMENT FACTORS
The very strong assessment of the operational risk profile reflects the Company’s very strong market position, strong business profile, high geographic diversification, and the adequate level of corporate governance.
The market position is assessed as very strong, as the Company occupies about 70% of the Russian market of plasticizing additives: in 2024, its market share for concrete additives was 67%, for redispersible polymer powders — 60%, for polycarboxylates — 55%. The Company accounts for approximately 25% of the global production of naphthalene sulfates.
The business profile is characterized by low prime costs, very high product diversification, high technological efficiency, and moderate demand cyclicality. The Company purchases its main raw materials on the Russian market at prices below world prices. Production chain is vertically integrated to some extent (the Company consumes at least 50% of its own naphthalene through internal production), which has a positive effect on profitability. A significant part of the production assets has been built in recent years using advanced technologies, so the quality of fixed assets often surpasses their global counterparts. The Company’s products are used in many sectors, including the construction industry and metallurgy, in the production of building materials and household chemicals, as well as in the textile industry. The share of the largest single product in revenue by the end of 2024 was 22%.
Geographic diversification is assessed by ACRA as high. The Company exports over 250 products to more than 80 countries. The share of exports in revenue for 2024 was about 20%, and the Agency expects this indicator to grow to 35% this year. By the end of 2025, the Company’s largest enterprise (Polyplast Novomoskovsk LLC) is expected to account for about 44.5% of the total volume of shipments of final products in physical terms.
Large business size and high profitability. The weighted average FFO before net interest and taxes for the period from 2023 to 2028, according to ACRA’s estimates, will amount to RUB 60.4 bln. The Agency estimates the average FFO before interest and taxes margin for 2023–2028 at 27.2%.
Low score for debt coverage and medium ratio of total debt to FFO before net interest. According to the Agency’s estimates, the weighted average ratio of total debt to FFO before net interest for the period from 2023 to 2028 will be 3.3x. The weighted average ratio of FFO before net interest to interest for 2023–2028 is estimated by ACRA to be above 1.9x.
Strong liquidity and very weak cash flow. The Company’s peak investment costs in 2024 and 2025 are putting significant pressure on free cash flow (FCF). The Agency believes that starting in 2026, FCF will move to the positive area. At the same time, sustainable operating cash flow, comfortable repayment schedule, and a significant amount of open credit lines lead to the strong liquidity assessment.
KEY ASSUMPTIONS
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Capital investment program in line with the Company’s plans.
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Physical production volume growing to 1.54 mln tons in 2028 vs. 909,500 tons in 2024.
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The Bank of Russia key rate declining to 12–13% in 2026 and further to 7.5–8.5% in 2027–2028.
possible outlook or rating change factors
The Stable outlook assumes that the rating will highly likely stay unchanged within the 12 to 18-month horizon.
A positive rating action may be prompted by:
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Weighted average ratio of FFO before net interest to interest exceeding 2.5x;
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Weighted average FCF margin consistently exceeding 2%.
A negative rating action may be prompted by:
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Weighted average ratio of total debt to FFO before net interest consistently exceeding 3.5x;
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Weighted average ratio of FFO before net interest to interest falling below 1.0х.
rating components
Standalone creditworthiness assessment (SCA): a.
Support: none.
issue ratings
No outstanding issued have been rated.
REGULATORY DISCLOSURE
The credit rating was assigned under the national scale for the Russian Federation based on the Methodology for Credit Ratings Assignment to Non-Financial Corporations under the National Scale for the Russian Federation and the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities.
A credit rating has been assigned to Polyplast JSC for the first time. The credit rating of Polyplast JSC and its outlook are expected to be revised within one year following the publication date of this press release.
The credit rating was assigned based on the data provided by Polyplast JSC, information from publicly available sources and ACRA’s own databases. The credit rating is solicited, and Polyplast JSC participated in its assignment.
In assigning the credit rating, ACRA used only information, the quality and reliability of which was, in ACRA's opinion, appropriate and sufficient to apply the methodologies.
ACRA provided no additional services to Polyplast JSC. No conflicts of interest were identified in the course of credit rating assignment.
