Rating Release

Agusto & Co. hereby assigns “Bbb” (long-term) and “A2” (short-term) ratings to Tempo Paper Pulp and Packaging PLC, with a stable outlook. 

The rating expires on 30 June 2027. 

Agusto & Co. hereby assigns “Bbb” (long-term) and “A2” (short-term) ratings to Tempo Paper Pulp and Packaging PLC (“TPPP”, “Tempo” or “the Company”). The ratings reflect the significant improvement in the Company’s earnings and cash flows, driven by stability of foreign exchange rates, better trade terms with foreign suppliers, and access to locally-sourced polypropylene resin from Indorama Eleme Petrochemicals Limited. Furthermore, the ratings recognise the commencement of raw material sourcing from Dangote Refinery in 2026, which will further support cost efficiency. This is in addition to TPPP’s good liquidity profile, growing export earnings which provide some hedge against foreign currency obligations, and its dominant market position as the leading manufacturers of Cast Polypropylene (CPP) and Biaxially Oriented Polypropylene (BOPP) films in Nigeria. The ratings also consider TPPP’s long-standing relationships with major Fast Moving Consumer Goods (FMCG) customers, ongoing product diversification efforts and expansion into new export markets across East Africa and Europe. Nevertheless, the ratings are constrained by Tempo’s rising leverage and exposure to foreign currency-denominated obligations, particularly the €12.8 million Afrexim Bank facility, which leaves the Company vulnerable to adverse exchange rate movements. The ratings are further tempered by Tempo’s low equity cushion and persistent working capital challenges.

Tempo Paper Pulp and Packaging Plc is a wholly owned subsidiary of Obasanjo Holdings Limited and Nigeria’s leading manufacturer of CPP and BOPP films, which are used for packaging snacks and confectionery, as well as for printing and lamination. The Company controls approximately two-thirds of the domestic market. The Company operates a combined annual production capacity of 89,000 metric tonnes (MT) of CPP and BOPP films across three production lines. TPPP serves a broad base of converters and end-users in the food and beverage, pharmaceuticals and cosmetics industry. The Company also exports to several African countries including Ghana, South Africa, Kenya and Tunisia and is actively pursuing registration in Rwanda to extend its footprint into the East African market.