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Fauji Fertilizer Company Limited

Fauji Fertilizer Company Limited

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Published by Anaya Choudhry

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Published by: Anaya Choudhry on Dec 22, 2010
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Internship Report 2010
Page | 1
Department of management sciences
 
 I 
 NTRODUCTION OF THE 
O
 RGANIZATION 
 
F
FC occupies a special niche in the industrial and agriculturaldevelopment of the country with a successful track record of excellence business performance. The company moved fromone high level of achievement to other establishing records year after year and is now ranked as a top tier player in the fertilizer industry with highest production capacity and marketparticipation.During the year, FFC acquired 100% management control. Of PSFL, a wholly owned subsidiary of NFC, through competitivebidding on payment of RS.8.15 billion to the Privatizationcommission. With the integration of PSFL, which now standsdissolved and merged with FFC effective july1, 2002, pursuantto a scheme of amalgamation approved by the Honorable HighCourt of Sindh, the production capacity of our ureamanufacturing facilities has more than tripled from 570 thousandtones p.a. in 1982 to almost 2 million tones p.a. in this shortspan of less than 25 years of existence. FFC now owns threemega plants worth over 1 billion dollars in terms of replacementvalue, besides over 49% stake in FJFC.2002 was a difficult year and business conditions werechallenging because of the economic fall out of the recent
 
 
Internship Report 2010
Page | 2
Department of management sciences
 
regional crisis. Uncertain economic and weather conditions, highnatural gas prices, global product oversupply, fallinginternational urea prices and weak domestic demandcontributed to an extremely difficult operation environmentduring the year which created a downward pressure on pricesand margins.These adverse factors are continuing since past few years andhave created intense competition for the industry players;however, once again our diversification has paid dividends andstrategies implemented over the years allowed the company tomaintain solid financial foundation throughout this prolongeddownturn.With a vision to acquire self - sufficiency in fertilizer production inthe country, FFC was incorporated in 1978 as a private limitedcompany. This was a joint venture between Fauji Foundation (aleading charitable trust in Pakistan) and Haldor Topsoe A/S of Denmark.The initial authorized capital of the company was 813.9 MillionRupees. The present share capital of the company stands at Rs.3.0 Billion. Additionally, FFC has Rs. 1.0 Billion stakes in thesubsidiary Fauji Fertilizer Bin Qasim Limited (formerly FFC-Jordan Fertilizer Company Limited).FFC commenced commercial production of urea in 1982 withannual capacity of 570,000 metric tons.Through De-Bottle Necking (DBN) program, the productioncapacity of the existing plant increased to 695,000 metric tonsper year. Production capacity was enhanced by establishing asecond plant in 1993 with annual capacity of 635,000 metrictons of urea. FFC participated as major shareholders in a newDAP/Urea manufacturing complex with participation of major international/national institutions. The new company Fauji
 
 
Internship Report 2010
Page | 3
Department of management sciences
 
Fertilizer Bin Qasim Limited (formerly FFC-Jordan Fertilizer Company Limited) commenced commercial production witheffect from January 01, 2000. The facility is designed to produce551,000 metric tons of urea and 445,500 metric tons of DAP.This excellent performance was due to hard work and dedicationof all employees and the progressive approach and support fromthe top management. In the year 2002, FFC acquired ex PakSaudi Fertilizers Limited (PSFL) Urea Plant situated at Mirpur Mathelo, District Ghotki from National Fertilizer Corporation(NFC) through privatization process of the Government of Pakistan. This acquisition at Rs. 8,151 million represents one of the largest industrial sector transactions in PakistanRecently Fauji Fertilizers Company offered the highest bid of Rs8.151 billion for the Pak-Saudi Fertilizers Limited here onSaturday. Second highest bidder was the Dawood Hercules thatoffered Rs 3.78 billion while the lowest bid of Rs 3.602 billionwas received from Engro Chemicals. In simple words FaujiFertilizers Company offered Rs 4.50 billion rupees more than

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