INTRODUCTION

FFC occupies a special niche in the industrial and agricultural development of the country with a successful track record of excellence business performance. The company moved from one 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 market participation. During the year, FFC acquired 100% management control. Of PSFL, a wholly owned subsidiary of NFC, through competitive bidding on payment of RS.8.15 billion to the Privatization commission. With the integration of PSFL, which now stands dissolved and merged with FFC effective july1, 2002, pursuant to a scheme of amalgamation approved by the Honorable High Court of Sindh, the production capacity of our urea manufacturing facilities has more than tripled from 570 thousand tones p.a. in 1982 to almost 2 million tones p.a. in this short span of less than 25 years of existence. FFC now owns three mega plants worth over 1 billion dollars in terms of replacement value, besides over 49% stake in FJFC. 2002 was a difficult year and business conditions were challenging because of the economic fall out of the recent regional crisis. Uncertain economic and weather conditions, high natural gas prices, global product oversupply, falling international urea prices and weak domestic demand contributed to an extremely difficult operation environment during the year which created a downward pressure on prices and margins. These adverse factors are continuing since past few years and have created intense competition for the industry players; however, once again our diversification has paid dividends and strategies implemented over the years allowed the company to maintain solid financial foundation throughout this prolonged downturn. With a vision to acquire self - sufficiency in fertilizer production in the country, FFC was incorporated in 1978 as a private limited company. This was a joint venture between Fauji Foundation (a leading charitable trust in Pakistan) and Haldor Topsoe A/S of Denmark.

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The initial authorized capital of the company was 813.9 Million Rupees. The present share capital of the company stands at Rs. 3.0 Billion. Additionally, FFC has Rs. 1.0 Billion stakes in the subsidiary Fauji Fertilizer Bin Qasim Limited (formerly FFC-Jordan Fertilizer Company Limited). FFC commenced commercial production of urea in 1982 with annual capacity of 570,000 metric tons Through De-Bottle Necking (DBN) program, the production capacity of the existing plant increased to 695,000 metric tons per year. Production capacity was enhanced by establishing a second plant in 1993 with annual capacity of 635,000 metric tons of urea. FFC participated as a major shareholder in a new DAP/Urea manufacturing complex with participation of major international/national institutions. The new company Fauji Fertilizer Bin Qasim Limited (formerly FFC-Jordan Fertilizer Company Limited) commenced commercial production with effect from January 01, 2000. The facility is designed to produce 551,000 metric tons of urea and 445,500 metric tons of DAP. This excellent performance was due to hard work and dedication of all employees and the progressive approach and support from the top management. In the year 2002, FFC acquired ex Pak Saudi Fertilizers Limited (PSFL) Urea Plant situated at Mirpur Mathelo, District Ghotki from National Fertilizer Corporation (NFC) through privatisation process of the Government of Pakistan. This acquisition at Rs. 8,151 million represents one of the largest industrial sector transactions in Pakistan Recently Fauji Fertilizers Company offered the highest bid of Rs 8.151 billion for the Pak-Saudi Fertilizers Limited here on Saturday. Second highest bidder was the Dawood Hercules that offered Rs 3.78 billion while the lowest bid of Rs 3.602 billion was received from Engro Chemicals. In simple words Fauji Fertilizers Company offered Rs 4.50 billion rupees more than Engro and Rs 4.371 billion more than Dawood Hercules in bidding for Pak-Saudi Company. Sealed bids for the privatization of Pak-Saudi Fertilizer Company were opened by journalists on the request of Privatization Minister in the presence of bidders, senior government officials and private sector representatives. Three

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companies, Fauji Fertilizers, Engro Chemical and Dawood Hercules filed bids for the said company. Fauji Fertilizers offered Rs 135.85 for each share of the Pak-Saudi Company, Dawood Hercules offered Rs 70 per share, while Engro Chemical offered Rs 66.70 for a share. Seeing a far high difference in the price offered by Fauji Fertilizers, the other two bidders did not take interest in contesting privatization of the said company and wished a good luck for FFC. Announcing price offers by the private sector, Minister for Privatization Altaf Saleem declared the Fauji Fertilizers Company as the highest bidder that intends to buy 100 percent shares.

NATURE OF THE BUSINES
The company is a public company incorporated in Pakistan under the Companies Act, 1913, (now the Companies Ordinance, 1984 and its shares are quoted on the stock exchanges in Pakistan. The principal activity of the company is manufacturing, purchasing and marketing of fertilizer, including investment in other fertilizer manufacturing operations.

FFC HISTORY
  FFC was incorporated on May 8, 1978. Based Unit at Goth Machhi commenced commercial production in June 1982 Based Unit up-graded in April 1992 to produce 695 thousand tones annually. Expansion Unit at Goth Machhi commenced commercial production in March FJFC founded in November 1993 with initial contribution of Rs. 1 billion. The PSFL acquired on May 31,202 and merged with FFC on July 1,2002. Situated at

with annual designed capacity of 570 thousand tones urea.  

1993 with designed capacity of 635 thousand Tonnes.  company’s investment in FJFC now stands at over RS 4 billion.  tones. Mirpur Mathelo the plant has annual designed production capacity of 574 thousand

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FFC has produced and marketed 21million tones of urea. door-step since 1986. 42 billion to the national The company earned a net profit after tax of over Rs. the The company’s annual Reports have been adjudged as one of the best reports in exchequer in the form of taxes and government levies.  In terms of import substitution this has resulted in national savings of well over 3 billion dollars in foreign exchange. FFC was the first company in Fertilizer sector to achieve ISO 9002 certification FFC has been placed amongst the list of top 25 companies of PAKISAN BY KSE 21.5 million Man-hours of operation without injury were achieved in 2003.  the Chemical sector twice by joint committee of ICAP/ICMAP.  since inception.  farmers. 4 . 3 billion for the fifth time The company was the highest tax payer in the corporate Sector ub 1993/1994.  Since inception the company has contributed Rs. topping the list in 1997.   fertilizers. almost 2 million tones annually.  for eight years consecutively. The aggregate designed production capacity of FFC is three plants now stand at Since inception to 2002.  highest ever.   in 1997. including 2002. Since inception the company has sold/marketed almost 28 million tones of FFC is the only company providing Mobile Farm Extension Services at the FFC was the first company in fertilizer Sector to achieve in 2002 the highest ever.

FFC's vision for the future envisages diversification and undertaking ventures at home and abroad in collaboration with leading international partners.Vision Statement Vision Statement FFC is focused on harmonizing its capabilities and maximizing its potential. 5 .

and taking initiatives. 6 .Mission Statement FFC's mission is to sustain its role as the leader in industrial and agricultural advancement of Pakistan by setting and achieving new and higher goals. The Company is committed to ensuring products safe and and allied conducive high services to work quality its environment. providing customers and profitable returns to its shareholders.

To create the agricultural awareness in farmers through media and training. 7 . To provide farmers technical services through technical services department free of cost. extension and marketing personnel in the transfer of fertilizer technology. To hire and retain satisfied workforce To play a vital role in agricultural development of the country To provide the quality products To set high standards for production and sale and achieve these objectives To be environment-friendly organization To promote education in the farmers community by awarding merit scholarships.Objectives of the company The broad objectives of the company are. To deliver exclusive values and services to the shareholders and customers through its strategies To place great value on social responsibilities and welfare To develop a culture based on principles of honesty. faireness and respect. • • • • • • • • • • • • • • To sustain its role as market leader in urea production and marketing. To help upgrade the capability of fertilizer research. To provide a neutral common platform to resolve contentious issues in fertilizer sector. integrity.

the company is confident to take on the new challenges. This performance record is considered unparalleled in the country and matches high standards any where in the world. the company is preparing to harmonize itself with new century.Vision 21 FFC has progressed remarkably from its inception in 1978 till to date. Each of these have incurred an investment of over 300 million US$ amounting to one of the largest investments in Pakistan. The list of different projects that are being evaluated at present are:  Oil Refinery  Paper Mill Project  Software Development House  Off-Shore Fertilizer Complex  Mineral Acid Production  Petrochemical  Revamp of existing FFC facilities 8 . Building on the foundations of the last 20 years. At this point in time. Three projects in a span of less than 20 years have been set up. FFC 's vision for the 21st century looks for diversification and establishing projects beyond the territorial limits of the country in collaboration with world famous international industrial holdings.

QULITY POLICY OF FFC 9 .

HI.F.. Karachi. Rawalpindi Cantt. HI(M) (Retired) Secretary Registered Office Plantsite Brig(Retd.5. Karachi Office D-143. PLANT-I PLANT-I PLANT-III PLANT-IV Goth Machhi. Block-4. Kehkashan Clifton.Company Manufacturing Facilities The Company has three plants and is a shareholder in FFBL. Mahmud Ahmed. 11 Shahrah-e-Aiwan-e-Tijarat. Marketing Division Lahore Trade Centre. Sadikabad. Ferguson & Co.) M. Sadikabad. It markets the whole production of FFBL. KDA Scheme . HI(M) (Retired) CHIEF EXECUTIVE AND MANAGING DIRECTOR Lt. Rahim Yar Khan Mir Pur Mathelo Fauji Fertilizer Bin Qasim Limited Company Information Chairman Lt. Sadikabad. Lahore. Rahim Yar Khan Goth Machhi. Auditors A. 10 . Gen. Gen. Akram Khan (Retd) 93-Harley Street. Goth Machhi. Syed Muhammad Amjad. Rahim Yar Khan.

Nearly half of the strength is located at the plant to provide on-the-spot assistance to the manufacturing units besides feeding vital plant data to the Head Office for immediate processing. advising management on technical matters and development of a technological base along with consultancy functions. a group of selected engineers was assigned to Technology Division-TD (then called CED) Head Office with the objective of providing engineering and technical backup to the plant operations Additional responsibilities that are assigned to TD. Since 1982. The development of TD was equally supported by the FFC management which has recognized the need to promote research and technological development activities. handling capital investment projects. process engineers and IT specialists. Project Feasibilities and Project Development. Project Management. TD has made tremendous progress in the field of Plant Engineering. include monitoring plant performance. development of new projects. TD is equipped with latest computing facilities along with engineering software from world famous engineering designer M/s Haldor Topsoe of Denmark and other technical software purchased from the engineering companies as well as in-house developed 11 . TD is manned by a team of highly trained project engineers.Chartered Accountants BUSINESS AREAS OF THE COMPANY  Engineering  Manufacturing  Marketing Engineering After the successful start-up of the first plant in mid 1982.

finance and administration. Over the years.Goth Machhi is situated at a distance of 2 kms from the main Lahore-Karachi highway and is adjacent to the main railway line. The success achieved so far by TD proves that FFC now possesses requisite in-house capabilities to ensure successful completion of large scale projects within allocated budgets and assigned project schedules. Delegations from China.software related to engineering and other general purpose need of the company. With the commencement of commercial production in June 1982. farm advisory services. TD’s role in all projects starts from the conceptual stage and concludes at the successful commissioning and handing over of the project to the Operation Group. the company started marketing its urea under the brand name "Sona". sales. Manufacturing The largest urea manufacturing facility of Pakistan consisting of two ammonia/urea units owned by FFC. setup in July. the plants have demonstrated an operational excellence which has become a reference for the engineering companies whose process technologies are used here. The two plants are based on natural gas from Mari Gas Fields and have an annual designed production capacity of 1. field warehousing. distribution. 1978 is responsible for all marketing operations including planning. 12 . TD’s most significant contributions to date have been successful project management of FFC Project 1 debottlenecking. is built at Goth Machhi in district Rahim Yar Khan. FFC Plant Expansion Project 2 and the Fauji Fertilizer Bin Qasim (formerly FJFC) Project. Middle East and Far East keep visiting the plant site for gaining first hand knowledge before deciding to purchase a new plant Marketing Division.3 million tons of urea. This technology enables TD to undertake detailed process/engineering design related assignments and to provide most valuable assistance to other departments within the company.

Subsequent to this decision FFC started import of these fertilizers and as a result timely supplies were arranged. The Company is also marketing half a million tonnes of sona urea granular manufactured by Fauji Fertilizer Bin Qasim (formerly FFC – Jordan Fertilizer Co. The Government of Pakistan deregulated the trade and prices of phosphatic fertilizers on 21 August 1993. the other manufacturers namely Engro. When FFC came into the market with its production in June 1982. Ltd). FFC pioneered urea exports which not only helped in stabilizing domestic urea but also earned valuable foreign exchange for the country. marketing quality products backed by efficient and effective support services with emphasis on developing the market through practical and innovative farmer education. enhanced the brand image of its product Sona urea which has become the number one brand. FFC had to face very tough competition from the beginning. For this. Farmers were thus provided with quality product in bags with guaranteed correct weight and this brought about a very positive qualitative change in the phosphatic fertilizer business in the country. FFC not only met the challenge by capturing the desired market share but in the process. phosphate and potash based fertilizers. During the period 1983 to 1986 when a large urea surplus existed in the country. The Marketing Division now has the necessary expertise to handle fertilizer imports and exports.Marketing The company markets not only Sona urea but also imported nitrogen. FFC believes in selling a programme rather than just a product. 13 . The brands of Engro (Engro) and Dawood Hercules (Babber Sher) were considered premium brands in Sindh and Central Punjab respectively. Dawood Hercules and National Fertilizer Corporation were already well established in the market. This competition coupled with the huge surplus of urea in the domestic market posed a great challenge to the company in the initial years. the company has adopted a customer oriented strategy.

where OCP already has a large chemical complex. The cost of the project is estimated at US$ 203 Million and is likely to start commercial production by early 2007. one of the largest in private sector in Pakistan. The proposed project is planned to be located at Jorf Lasfar .300.000 MT Phosphoric Acid per year by consuming 1. This Project will produce 375.000 MT Phosphate Rock and 370.670 metric tones per day of Granulated Urea and 1. It will meet total requirement of phosphoric acid for the DAP production in FFBL plant at Bin Qasim. The project is sponsored by the largest and well known industrial group of Faujis and Jordan Phosphate Mines Company. Fauji Fertilizer Bin Qasim Limited Fauji Fertilizer Bin Qasim Limited is a US$ 461 Million Project.350 metric tones per day of Di- 14 . producing both DAP and Granular Urea for the first time in the country. Fauji Fertilizer Bin Qasim Limited at a glance: Capital Cost: $461 million Joint Venture of Fauji Foundation and Fauji Fertilizer Company Limited Production Capacity: 1. Fauji Fertilizer Company Limited and Fauji Fertilizer Bin Qasim Limited.000 MT Granular Sulfur.IT is a Joint Venture Office Cherifien des Phosphates (OCP) Group of Morocco and Fauji Group including Fauji Foundation.A” with equity of 800 Million Moroccan Dirhams. have entered into a Joint Venture Company in Morocco named “Pakistan Maroc Phosphore S. It is not a grass root project and will utilize basic infrastructure and ancillary facilities already present at Jorf Lsafar Site. Morocco .

15 . 2003. Morocco was signed on July 21. followed by urea in April 1999. ammonia plant was procured for relocation. DAP Plant recommenced its production on September 22. A long term agreement for the Supply of Phosphoric Acid between Maroc Phosphore S. with the same JPMC is no more a partner or equity holder in the Company. USA.A. Company History Of FFBL By the early nineties. a preliminary feasibility was undertaken in 1992. At that time management of Fauji Fertilizer embarked on the FFC-Jordan Fertilizer Project in order to make Pakistan self-sufficient in urea and reduce the import of DAP. By 1993. New plants of DAP and urea were installed and the first production of DAP commenced in Nov 1998. the detailed feasibility studies was completed and the Lake Charles. Termination agreement with Jordan Phosphate Mines Company Limited (JPMC) was signed on 24/06/2003.000 tons of DAP per annum. a wholly owned subsidy of Office Cherifien Des Phosphates.Ammonia Phosphate (DAP) FFBL has the distinction of producing 13% of urea and 31% of Di-Ammonia Phosphate of the country's total requirement. 2003 and supply of DAP in the market started thereto. Pakistan was importing almost one million tons of urea and 800. After initial discussions with the Jordan Phosphate Mines Company.

Vision Statement of FFBL Our vision and overall corporate strategy is to:      Be a leading fertilizer company with a diverse product base Gain excellence in operations Ensure exemplary Business Ethics Ensure Safety. Healthy and friendly environment Exercise effective corporate governess 16 .

quality fertilizers and achieving sustainable and viable growth rate through excellence and generating optimum profits to the total satisfaction of all stakeholders 17 .Mission Statement of FFBL To produce competitively priced.

It is the sole producer of DAP SONA DAP 18 .PRODUCTS OF FFBL Sona Granular It produces 13% of total production SONA Granular SONA DAP FFBL produces 31% of country’s demand.

Fauji Cement Company Ltd Fauji Fertilizer Company Ltd Fauji Jordan Fertilizer Company Ltd Fauji Kabirwala Power Company Ltd Mari Gas Company Ltd OVERVIEW OF AN EX-SERVICEMEN’S WELFARE ORGANISATION An ex-serviceman who spends his life in an atmosphere of discipline . Rawalpindi Foundation Gas.and fairplay finds it rather difficult to adjust to the ‘cavy’ conditions. Rawalpindi. Khoski Fauji Sugar Mills. Nukerji. Hub Chowki Fauji Sugar Mills. Rawalpindi Fauji Oil Terminal Company.Fauji Foundation Profile of a Welfare Organisation for Ex-Servicemen AN ARMY OF BUSINESS INTERESTS Institute of Management & Computer Sciences 1 College of Education 1 Intermediate Colleges 2 Model Schools 81 Vocational Training Centres 67 Technical Training Centres 9 Referral Hospitals 6 Rural Hospitals 5 Fauji Foundation Medical Centres 24 Mobile Health Units 2 Dispensaries 27 Wards in CMH 1 1 (CMH Mardan) Fauji Corn Complex. Tando Muhammad Khan Fauji Sugar Mills. Rawalpindi Fauji Polypropylene Products. Rawalpindi. Rawalpindi Fauji Metals. Islamabad. Fauji Software Company. Sind. Sangla Hill Fauji Foundation Experimental & Seed Multiplication Farm. Fauji Medical Transcription. Karachi. A large number of these simply 19 . NIC Project. Jehangiria Fauji Cereals. Fauji Institute of Information Technology & Medical transcription Fauji Foundation Institute of Management & Computer Sciences.

it is here that the Fauji Foundation comes in a big way in providing them social security and such facilities as education for their children and health coverage. Education    Colleges Schools Scholarships 2 64 1.and some are simply baffled and disillusioned. the Foundation pays its full quota of taxes. I went on to find the sore point of employment of retired officers and for which a very large number of applicants come up. Sciences 9 66 2 Medical:    Hospitals Day Health Centres Mobile Dispensaries 12 24 48 The data explains that some quarters thought that the Foundation was a rather ‘privileged’ outfit. levies and other liabilities as surcharges et al and is never a defaulter on any count. 20 . It is unfortunate that the economic conditions .942 Technical Training:    Technical Training Centres Vocational Training Centres Fauji Institutes of Comp.cannot adjust to the non-egalitarian environments . Far from it.and monetary environments in the country do not permit full social benefits to these otherwise potential human resources.30.

It is both highly humanitarian and forward looking in its industrial planning.and are terribly oppressed and miserable once they shed their uniforms. It is not possible to present the entire budget of the Foundation in this presentation nor even a glimpse of its entire gamut of activities. Surely it is remarkable feat . FF in fact has a massive mandate as it rightly claims to be ‘A charitable trust for the welfare of ex-servicemen. Of course it must make money for its dual role but as I have put it the outfit has much loftier overall goals which are humanitarian and not purely money minting which any thrifty and miserly business house can easily make notwithstanding the dubious means employed for this goal.’ No other business house in the country has such a massive egalitarian mandate . as he did so admirably so far. FF is unique in this respect that it looks after the welfare of a good over nine million exservicemen who are invariably ignored by the other government agencies .categorically that the number of vacancies with the Foundation is very small and now the GHQ Welfare Directorate has also been associated with the process of finding work for retired officers. He must be congratulated for that. and their dependents.in providing.and its present assets stand at over 9 billion which were just around Rs 18 million in midfifties. But now some more vacancies have been created within the Foundation. one should think that Fauji Foundation is a unique outfit for the welfare of exservicemen.and over a short period of time it has grown phenomenally . One should hope that the present MD will continue with the good work of presenting the activities of his outfit personally. I have tried just to highlight some of its more important facets. health. Fauji Foundation (FF) may be singled out for its unique performance and operation. 21 . FF is a bit of a miracle .and a real success story. Finally. It is run with vision and egalitarian purposes.irrespective of the profits made by it. education and re-employment facilities. These poor souls notwithstanding their expertise are misfits and it is FF which comes to their rescue .

Invalid sons of ex-servicemen for medical treatment (No age bars.and it also earned the coveted ‘The World Veterans Federation Rehabilitation Prize’ in 1997 at Seoul (Republic of Korea). It also does not get any donations from any other source. The performance of FF is more remarkable especially as the foundation is a selfsupporting entity in entirety.’ Very few like outfits or NGOs can boast of such a remarkable performance.and divorced daughters until remarried.and out of sheer necessity. • • • • • This is a mouthful .and beyond for education and technical training stipends. artificial limbs and other facilities for the rehabilitation of disabled ex-servicemen. thus enabling them to be full-fledged citizens contributing to the welfare of their communities. Sons of ex-servicemen up to the age of 18 years . the foundation has to do well in its commercial ventures where it must invest wisely. technical training. The citation for this remarkable prize is worth quoting. education. A very brief business profile of FF is indicated as below: Fully Owned Projects include: 22 .FF has earned a very considerable applause outside the country . It has to generate its own funds for the massive humanitarian mandate.) Cadets of service academies invalided out of service for disabilities attributable to military service. It runs that the prize was awarded ‘for its remarkable achievements in looking after ex-servicemen and their families in providing healthcare. Unmarried daughters of ex-servicemen . and run the business shrewdly. It is a charitable trust which receives no financial assistance from either the Federal or the Provincial governments. FF beneficiaries include the following categories of service personnel: • Released. retired and discharged personnel of the Regular armed forces who are citizens of Pakistan. Legally wedded wives and widows of the above personnel. employment.

Fauji Sugarcane Experimental & Seed Multiplication Farm. Fauji Polypropylene Products Foundation Gas. Fauji Sugar Mills Khoski. Fauji Oil Terminal and Distribution Company Limited.Jordan Fertilizer Company Limited. over labour intensive smaller projects. Shareholding Projects include:     Fauji Fertilizer Company Limited. Fauji Sugar Mills Sangla Hill. administrative facilities and infrastructure.  Setting up of profit earning intensive mega projects with foreign investors.  Availability of civic amenities. It is through wise investment and expert management that FF has established a nitche in the Private Sector. Preference given to declare tax free areas by the government. Fauji Cement Company Limited. Marketing prospects for the finished goods/products. Fauji Cereals. Mari Gas Company Limited. 23 . The industrial units/ projects have been set up with great care and some of the factors which have been taken into account for this area:     Availability of raw material in the area. Geological and environmen Parameters related to the project. FFC. New Projects consist of:   Fauji Kabirwala Power Company Limited. Fauji Corn Complex.       Fauji Sugar Mills Tando Mohammad Khan.

In fact it is far from it . And at some repetition the criteria for such locations has a perfect reason.and rather erroneously thought there was no arbitrary consideration for setting up of a particular project in a special area. 24 . At first glance it appears that the welfare projects have been established somewhat arbitrarily.and the lenders. Setting up of the projects in areas with good communications and other administrative facilities needed for the smooth running of these projects. Finally here we have an outfit which has set a pace both in industrial development . the management of this outfit has been most prudent to have developed to such an extent from almost a scratch over such a short time. The main factors taken into account for each location are as below:  Proliferation of the benefits to the area which are densely populated by the exservicemen. Terms and conditions and at times restrictions imposed by financial institutions . It is most confidence giving and interesting to see the pace of growth of welfare projects. And sure. Creation of a balance between the province and different regions within the province by setting up of projects on the basis of percentage of ex-servicemen residing in the area. It will be seen that it is most accelerated in the medical and education sectors especially in the current year.and there is a perfect rationale for the location of every such facility.   In fact as commonly .and welfare sectors which is most confidence giving. and many ex-servicemen who do not have such facilities located in their areas feel that way. This growth is indicated in an inset.

and diverse investment which I am sure will be equally profitable as the previous investments have been. INTRODUCTION TO INDUSTRY 25 .It is heartening that the foundation has in its pipeline still higher goals .

or micronutrients. Macronutrients Plants need large amounts of three nutrients –  nitrogen. Following World War II. Fertilizer makers take those three nutrients from nature and put them into soluble forms that plants can easily use. Plants need large amounts of three nutrients -. simply.nitrogen. Just like the human body needs vitamins and minerals. These are referred to as the minor nutrients. and potassium. Our world would be vastly different without commercial fertilizers. but end up being mixed together in varying amounts to match the needs of a particular crop. Coupled with growing food demand and the development of higher-yielding 26 . phosphorus. The analysis found on each bag or bulk shipment of fertilizer tells the farmer or consumer the amount of nutrients being supplied. Minor nutrients or Micronutrients There are a number of other nutrients plants need in small amounts. These are commonly referred to as macronutrients. These many nutrients are typically produced separately.About Fertilizer Fertilizer is. plant food.  phosphorus. plants need nutrients in order to grow. States have a system of laws and regulations that ensure the fertilizer is properly labeled and delivers the amount of nutrients stated on the bag.  Potassium. new technologies allowed for the rapid expansion of fertilizer production.

981 37. the abundance of food we enjoy is just one way fertilizers help enrich the world around us. While fertilizers provide many important benefits that are necessary for our way of life.182 33.929 14. we will have to work hard to ensure our products are safe.931 11. In order to capture the important benefits of fertilizer. The following data is about consumption and then production.884 47.097 22.736 31. fertilizer helped fuel the Green Revolution.664 9.688 41.920 12.003 52.588 13. In thousand metric tons of nutrient. Today. years ending June 30* World Consumption Item Nitrogenous Fertilizers Phosphate Fertilizers Potash Fertilizers Total Fertilizers 1961/62 1962/63 1963/64 1964/65 1965/66 1966/67 11.231 9.137 14.760 16.crop varieties. We've used the most recent developments in science to study our products and make sure safety comes first.414 8.612 12.799 17.999 10. Around the globe it is produced and used. GLOBAL OVER VIEW OF FERTILIZER World Fertilizer Use Our world would be vastly different without agriculture and agriculture is impossible without fertilizer. the improper use of fertilizers can harm our environment.179 10.106 12.490 15.329 27 .474 19.

704 131.476 145.917 80.829 134.190 28.144 39.590 81.534 21.543 79.946 31.456 24.051 20.853 25.673 26.684 23.308 73.754 112.425 44.480 122.945 91.695 85.442 33.317 82.810 63.117 70.117 22.986 25.248 28.188 138.685 24.657 72.357 82.277 59.475 81.769 36.472 33.401 19.263 49.814 84.173 67.312 33.430 78.536 36.970 18.120 54.140 19.370 22.481 75.147 115.354 72.291 37.086 33. years ending June 30* Country 1997/98 1998/99 1999/00 2000/01 2001/02 Nitrogen 28 .050 13.579 137.492 19.836 70.388 72.811 79.756 33.778 22.340 18.009 25.849 22.612 37.175 75.435 100.417 139.970 35.732 20.041 22.046 31.962 29.368 137.711 56.096 21.609 27.959 25.210 26.490 133.410 25.104 33.870 23.568 35.177 34.252 57.223 60.131 20.549 30.339 120.115 77.801 21.663 31.482 69.471 31.681 134.633 73.463 34.700 30.749 22.210 16.302 135.885 22.288 32.1967/68 1968/69 1969/70 1970/71 1971/72 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 1981/82 1982/83 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 24.928 14.472 116.607 108.323 28.198 137.046 129.452 61.037 19.005 26.159 143.374 28.204 38.949 81.606 125.399 95.244 23.420 45.577 22.730 Major Fertilizer Producing Countries Million metric tons.542 20.241 31.938 24.435 24.293 33.167 27.776 60.566 30.661 20.112 125.196 31.237 129.054 24.310 78.167 140.525 15.720 115.435 17.

3 3.4 3.5 7.4 9.5 6.5 1.1 10.9 22.2 1.8 10.9 2.0 3.7 8.7 3.2 3.0 6.9 1.9 9.1 13.9 11.4 3.8 Source: Food and Agriculture Association (FAO) FERTILIZERS ISSUES The core purpose of The Fertilizer Institute is to bring the viewpoints and interests of members to bear on public policy issues.2 4.2 3.5 3.1 3.4 3.3 3. we continue to improve our environmental performance.4 3.9 5. At both production sites and across the world in daily working with farmers. 29 .7 21.1 3.4 3.3 6.4 1.0 1.5 United States China India Russian Federation Brazil 9.5 9.2 5.0 6.5 10.7 22.6 5.7 3.0 4.0 3.7 Potash 8. Here's a rundown on the position on some of the hottest current issues.6 1.4 2.7 2.3 1.7 3.5 1.China India United States Russian Federation Canada 20.4 3.7 10.7 1.4 7.4 1.6 3.4 1.5 10.6 7.2 10.4 Phosphate 8.2 4.4 Canada Russian | Federation Belarus Germany Israel 9. Fertilizer and the Environment The fertilizer industry is committed to producing and helping farmers use fertilizer in ways that meets the environmental challenges of modern society.0 1.7 3.7 9.5 4.5 3.4 3.8 4.5 13.1 21.

thieves are stealing fertilizer products to manufacture the illegal drug methamphetamine. The members of The Fertilizer Institute support the removal or reduction of trade-distorting subsidies. Recent evidence also indicates that perchlorate is naturally occurring in the atmosphere and in certain arid environments. Methamphetamine In some areas. Perchlorate Perchlorate is a compound found in natural deposits and is also manufactured for various industrial purposes. tariffs.International Trade As an internationally-traded commodity. road flares and air bags. including in trace amounts in Chilean nitrate deposits. Metals in Fertilizers Some fertilizer products contain very small amounts of metals that are not beneficial to plant growth. This practice needs to stopped urgently. and non-tariff barriers to trade. mainly as a propellant for rocket fuel. A joint TFI/EPA round robin study 30 . These metals occur in products because they occur in nature as part of the ore bodies or in the raw materials used to make fertilizers. and when blended into other fertilizers. the members believe free trade benefits both manufacturers and consumers of fertilizer products. fertilizer is an important part of the export economy. The primary manufacturer of these Chilean nitrates has modified its manufacturing process to reduce perchlorate contents below 100 ppm. and often undetectable. the perchlorate content is usually less than 10 ppm. Perchlorate is also used as a solid propellant for fireworks. Three separate scientific studies on the safety of these metals in fertilizers have all come to the same conclusion -that they generally do not pose a threat to human health or the environment. Chilean nitrate fertilizers represent about 1/10th of 1 percent of the commercial fertilizer market. Fertilizer manufacturers serve customers around the globe.

published in 2002 indicated that commercial fertilizers in general do not contain perchlorate. Population Land Population with agricultural profession over 150 millons 796096 km square 70 % 31 . Transportation Fertilizer is transported from manufacturing plants and terminals by rail. The respective Boards hold jurisdiction over the railroads and over rail mergers. In the past.whether hazmat or rail mergers -. Fertilizer transportation is regulated at both the Federal and state level. truck. The importance of fertilizer in agrarian economy is above abord. barge and pipeline. another area of concern for the fertilizer industry.on behalf of its members PAKISTAN Pakistan is a agricultural economy. The Fertilizer Institute has worked to monitor transportation issues -.

982 244.347 310.622 24.805 1.340 197.546 45.499 2.559 54.006 237.422 1.901 57.586.899 60.250 0 52.665 466.007.942 2.243 207.143 1.063 987.352 304.997.413 1.223 286.559 2.767 249.660.665.317 249.856 157.674 133.064.381 212.204 290.017 176.580 58.752 63.008.908 58.816 1.589 298.209 1.116 52.373.600 137.021 60.062 273.610 217.544.510 322.162 312.475 288.157 915.224.900 689.740 59.672 209.928 56.675 1.314 1.218 252.559 816.484 285.360 1.100 698.451 3.120 320.226 FFC Total 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 China* Arab Kharif Season 57.341.007.719 62.776 225.641 214.416 391.004 46.238 0 59.956 9.700 650.896 48.865 52.778 151.762 179.099 1.963 146.698 1.219 57.688.045 281.565 355.207 461.600 700.522 NFC Engro PakSaudi 130.258 375.369 385.669 124.534 142.372 38.955 329.054 54.290.684 0 58.456 271.432 56.184 729.Domestic Production of Fertilizer by Products Urea (tonnes) PERIOD Dawood Hercules 153.408 312.710 59.262.667 32 .022.834 1.108.030 2.981 0 NFC PakNFC PakNFC PakAmercian 0 0 0 0 0 0 0 0 0 2.875 1.973 367.378 128.866 721.203 218.000 115.260 292.334 250.829 311.907 52.412 312.

276 118.852 41.669 333.046 33 .100 1.746 1.054 925.931.296 2.913 582.364 31.032 926.695 186.026 323.375 2.906 369.802 161.836 1.020 87.396 602.900 1.313 3.072 0 0 0 0 61.523 123.873 2.774 1.487 0 0 0 0 0 0 0 625.168 270.900 765.306.620 111.499 57.590.643 280.140 978.115 306.780 168.313 60.392 544.408 190.649 100.846 271.095 525.074.085 291.642.184 134.572 350.108.301.618.090 214.071 102.633 136.078 416.457 424.299 218.952 1.026 512.619 360.188 110.320 407.528 1.654 1.540 1.241 Domestic Production of Fertilizer by Products Urea 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 402.600 309.500 1.263 152.588 413.571 318.464 123.446 188.001 1.869 630.854 3.800 702.064 380.306.737 2.730.701 48.744 57.696 0 0 Rabi Season 60.417.453 332.920 295.732 1.254 701.488 40.994 1.050.822 91.734 313.603 60.769 85.989 41.110 3.1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 190.134 264.356.677 398.747 74.089.461 1.929.011 193.474 44.012.400 610.103.657 53.590 182.057 138.200 2.157 329.971 241.597 430.223 251.486 53.967 857.555 0 0 0 0 0 0 0 0 0 69.501 471 41.474 307.685 34.128 413.228 60.121 629.793 766.287 272.258.776 64.777 416.918 141.188.094 165.144.140 489.930 39.448 903.000.595 565.902.455 299.184 50.767 617.036.341.880 106.624.278 1.865 2.438 731.298 256.970 109.628 173.150 380.683 47.775 127.714 39.942 562.478.739 72.222 538.686 274.100 622.568 114.064 115.345 1.925 47.602 308.322 41.459 136.120 Fiscal Year 112.468 53.199 167.971 1.965 62.221 405.933 126.

257 4.434.968.073.914 411.809 101.690 310.721 412.962 376.101 435. Dawood Hercules (DH) 34 .550.407462 4.671 1.546 2.829 4.284.983.327 0 0 65.838 300. Fauji Fertilizer Company (FFC) Fauji Fertilizer Bin Qasim (Pvt) Ltd.188 818.151 3.510 855.732 602.717 1.028 3.259.590 0 0 124.676 605.720 102.464 517.796 1.518 2.703348 2.625 98.799 663.278 384.168 3.877.422.734.600 289.070 0 0 0 0 112.663 692.677 871. MAIN FERTILIZER PRODUCER IN PAKISTAN 1.457 3.124 233.258.383 624.344 73.498.195 1.135 3.960 887. (FFBQ) National Fertilizer Corporation of Pakistan (Pvt) Ltd.364 772.704 424.612 200.1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 377. 2.545 26. 4.667 92.107 397.050 618.104 96.834 *: M/S Schon Group purchased the plant operated for sometime and now is closed.453. 3.836 556.750 109.610 1.000 122.374 780.736.986 97.

Pak American Fertilizer (Pvt). (NFC)12 NFC 12 NFC12 NFC NFC NFC NFC Product SSP SSP10 SSP3 Urea1 Urea4 CAN9 NP Urea Start Year 1957 1967 1989 1998 1962 1980 Capacity 0 90 90 346 92 450 305 557 Pak. Ltd. Ltd. Ltd. Mirpur Mathelo FFC 35 .FERTILIZER PRODUCTION IN PAKISTAN Fertilizer Production Capacity in Pakistan 2002-03 000 Tones S. Faisalabad Jaranwala Hazara Phosphate Pvt. Haripur. Saudi Fertilizers Pvt. No. Daudkhel Pak Arab Fertilizer (Pvt). Multan Company Name National Fertilizer Corporation of Pakistan (Pvt) Ltd. Ltd. 1 2 3 4 5 Plant and Location Lyallpur Chemicals and Fertilizer Limited.

Ltd. Dharki Schon Pak-China Dawood Hercules (DH) Urea13 Urea5 Plant1 Urea8 1982 1971 1968 102 445 850 8 (Dahirki) Engro Chemical Pakistan Limited (ECPL) Plant2 Urea 11 NPK Plant 1 Urea6 1993 2001 1982 1330 Plant 2 Urea7 Urea2 DAP2 1993 1998 1998 550 446 4.073 4. Domestic Production Of Fertilizer in Pakistan Product Wise.551 46 339 0 284 436 818 603 73 102 200 1736 3. Karachi. (FFBQ) Product Wise.753 100 9 Fauji Fertilizers Co. Haripur (Presently not in operation) Dawood Hercules. Urea Total Total All Products Fauji Fertilizer Bin Qasim (Pvt) Ltd. Domestic Production Of Fertilizer 1997-98 Urea Dawood Hercules Engro NFC Pak-Saudi NFC Pak-China NFC Pak-Arab NFC Pak-Amercian FFC Sub Total DAP Sona FFC CAN NFC PAK-ARAB AS NFC PAK-American NP NFC PAK-ARAB 385 663 618 27 92 0 1.284 0 315 0.499 3. Machi Ghot Fauji Fertilizer Company (FFC) 10 Fauji Fertilizer Bin Qasim (Pvt) Ltd.877 3..968 298 386 0 261 376 781 605 0 110 234 1.407 0 335 0 305 36 .703 4.6 7 Pak-China.272 5.5 293 1998-99 1999-2000 2000-01 412 772 625 97 97 125 1423 3.983 325 374 0 285 2001-02 398 872 517 0 99 301 2.260 67 329 0 306 000 Tons 2002-03 425 888 613 0 102 290 2. Sheikpura Engro Chemical Pakistan Ltd.

384 5.373 4.Wala NFC Hazara Fert. Sub Total N:P:K TOTAL 0 0 0 1 3.128 78 84 162 63 5. Japan.753 Rs. Denmark. England.187 75 72 147 75 5. USA.563 Technology High Technology Source of Machinery Italy.40% Fertilizer Policy 2001   Fertilizer Policy has been announced with effect from 1st July.894 4 17 21 1 4. Private 6 Total 10 Employment 7. Public 4 b. Local Installed Capacities (000 Tons) Public Sector Private Sector Total Total Investment Contribution to GDP 1.SSP NFC LC&FL J.060 78 81 160 2 5. 37 . In next 10 years Pakistan will need additional 2 million tons of fertilizers for local consumption.242 73 73 146 1 5. 87 Billion 0. 2001.269 Spot analysis SPOT ANALYSIS OF FERTILIZER SECTOR Number of Units a.

annually gas prices would increase effective July 2001 to July 2006 @ Nil.77/MMBTU which ever is higher and a discount (less the discount of 10%) Gas will be allocated to new fertilizer plants on the principle of first come. 15% respectively. Thereafter the price is to be $ 1. For new Investments the price of feed gas will be the Middle Eastern Price prevailing on the date of signing of the GSA or $ 0.10 MMBTU or prevailing Middle East price which ever is higher. Recognizing the expected growth in fertilizer demand.5%. the government has decided to dedicate the shallow reservoir of Mari Gas field to the Fertilizer Industry. 7. Fuel Gas price will be same as for other industrial consumers in the country. 10%. The feedstock gas prices are frozen for 10 yrs in case of new plants but only for 7 yrs in case of expansion / BMRE. 12. 38 .Salient Features Policy has four parts:     Existing Fertilizer Plants New Fertilizer Plants Existing Plants Planning for expansion and BMR NPK Compounds. For Existing Plants.5%. 5%. first served basis.

Reduction in withholding tax on import of certain types of fertilizer from 6% to 1%. Mono-Ammonia Phosphate. 10%. To ensure this objective Ministerial Committee would meet when required. Second hand machinery/plant is importable at same duty as new plants i.e. to reduce the cost of fertilizer inputs. Duty free import of raw materials for NPK production i. BMR resulting in enhanced production capacity would be available for 5 years. Tax relief: First year allowance or Initial Depreciation Allowance @ 50% of Machinery & equipment cost or as provided under income tax laws shall be allowed.e. Concessions as per declining in concession policy for additional feed gas in the case of expansion. Triple Super Phosphate etc. 39 . Selling price shall remain deregulated and benefit would be passed to customers. machinery & equipments (not Manufactured Locally) for fertilizer Projects.Custom duty of 5 % under SRO: 457(I)/2004 is leviable on import of plant. Di-Ammonia Phosphate. Withholding taxes at the time of import of fertilizer shall be adjusted against assessed income tax of the year in case fertilizer is imported by a manufacturer of Fertilizer.

170 4.123 1.170 4.per bag in the price of Phosphatic Fertilizer.178 Supply 292 450 450 450 450 450 450 450 450 DAP Deficit / Demand 1.966 4.612 4.300 1.218 4.124 30 9 0 16 0 0 1.179 1.141 2000-01 86 15 773 47 0 0 0 15 22 958 2001-02 0 32 919 26 0 0 20 5 11 1.433 1.170 4.223 Supply – Demand Projection Urea Deficit / Year 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Supply Demand 4.170 4.348 Surplus -220 -329 -442 -557 -675 -796 -920 -1.A relief of Rs. Import of Fertilizers Product Urea AS DAP NP TSP SSP SOP 10:15:20 MOP Total 1999-00 114 21 819 122 15 22 11 5 12 1.170 4.090 4.170 5.238 1.170 5.069 1.365 1.390 4.170 4.499 4.055 -1.013 000 Tons 2002-03 0 17 1.048 -1.845 4.130 National Fertilizer Development Centre (NFDC) 40 .580 Surplus -777 -673 -729 -788 -850 -915 -983 -1.727 4.505 1.170 5.100/.

000. Per hectare average fertilizer use for cropped area increased from about 5 kg in 1964-65 to about 55 kg in 1981-82 and 147 kg in 2003-04. and from the Netherlands upto December.000 nutrient tonnes mark in 2004-05. 2. extension and use made it desirable for the Government to have neutral institution with the objectives to provide a common platform.000 nutrient tonnes mark in 1956. The existence in Pakistan of a number of agencies and organizations. with a view to helping in the formulation of Government policies and their implementation and to give support to other institutions. trade and use. production and imports. pricing and subsidies. extension and training. agronomic efficiency and impact on crop productivity are increasing both in frequency and intensity due to increasing fertilizer use consumption in Pakistan crossed the 10. NFDC studies all fertilizer-related problems from the supply source to the farmers' fields. working on different aspects of fertilizer production. Bottlenecks in fertilizer imports and production. After a brief period of aid from the United Nations Development Programme (UNDP) it has been assisted by the Food and Agriculture Organization (FAO) of the United Nations with Trust Funds from Norway (NORAD) upto May 1981. OBJECTIVES OF NFDC 41 .000 nutrient tonnes mark in 1992-93 and touching 3.The National Fertilizer Development Centre (NFDC) was set up by the Government of Pakistan (Planning and Development Division) in December 1977. In co-operation with the various federal and provincial institutions.000. privatization and deregulation. marketing and credit. NFDC is a multidisciplinary research and development organization at the federal level that integrates disciplines such as economic planning. agronomy and soil science.000 nutrient tonnes mark in 1979-80. research. trade.222.000 nutrient tonnes mark in 1966-67. research. 1997. the 100. 1.

 To conduct research studies on physical and economic returns on fertilizer use to farmers.  To conduct fertilizer use surveys at farm level to monitor fertilizer use by crops. 42 .  To provide a neutral common platform to resolve contentious issues in fertilizer sector.  To promote efficient. balanced and environmental friendly integrated use of plant nutrients for sustainable agricultural growth. impact on crop productivity. impact of input prices on crop output.  To launch new initiatives in soil fertility and plant nutrition management. on all matters related in any way to the fertilizer sector of Pakistan and its relations with the international fertilizer community. prices and evaluate situation critically for the information and action by the concerned organizations. to the fertilizer industry and to other parties as may be relevant.The current broad objectives of NFDC are:  To provide objective and comprehensive advice to all levels of Government. extension and marketing personnel in the transfer of fertilizer technology.  To help upgrade the capability of fertilizer research. consumption. imports. crop responses to fertilizers and problems faced by farmers. deregulation/privatization of fertilizer in order to facilitate policy decisions. so that timely actions can be taken to effect improvement.  To monitor the status of all aspects of fertilizer use development: production.

fertigation. Special programmes and areas of special interest and collaboration include:  Studies on privatization in the fertilizer sector  Fertilizer use development programme. special programmes and areas of special interest and collaboration. balanced fertilization and fertilizer use efficiency  Fertilization in horticulture (e. intenrational prices. e. 43 . integrated crop nutrition. Core activities Constitute those regarded as the central functions of NFDC.g. fertilizer use surves. seasonal and annual).PROGRAMMES AND ACTIVITIES NFDC's programmes are classified as core activities. fertilizer situation reviews. demand forecasting. fertilizer bibliographic updates.g. special technical notes. training courses contributions to and participation in national and international fora and computerized library documentation and retrival of literature. fertilizer esearch reviews. investigations with new products and application techniques)  Fertilizer advisory services  promotion of blends/compounds  Assist soil testing laboratories  Establishment of a regional centre on pant nutrition management and development. crop responses. (monthly. These include data base.

importers and distributors. agricultural universities and research institutes. and testing laboratories. NFDC works in close liason with private sector fertilizer producers and marrketing agencies. its Fertilizer Cell. soil testing and soil fertility laboratories and extension and training organizations.ORGANIZATIONAL LINKS OF NFDC National NFDC works in close collaboration with the Federal Ministries and their executive arms concerned with fertilizer use development. Hague.  Agricultural Economics Institute (LEI). Ministry of Finance and the credit institutions. International Food and Agriculture Organization (FAO) of United Nations : NFDC since its establishment is getting financial as well as technical support from FAO. Ministry of Industries and Production and the National Fertilizer Corporation operating public sector fertilizer plants.  Fertilizer Advisory Development and Information Network for Asia and the Pacific (FADINAP) .ESCAP. Bangkok : NFDC is a technical liaison office for 44 . Department of Plant Protection. etc. Some joint activities are being planned. Ministry of Petroleum and Natural Resources. NFDC is regarded as a pioneer institution of the FAO Plant Nutrition Management Service. At the provincial level NFDC maintains liaison with the Provincial Governments. The most important among these are: Ministry of Food and Agriculture. pesticides associations. Land and Water Development Division and is termed as a `Centre of Excellence’. Hague. NFDC is also represented on various committees at national and provincial level. Netherlands : NFDC and LEI. etc. the Netherlands have signed a memorandum of understanding for technical co-operation between both the organizations. Pakistan Agricultural Research Council.

Paris.  International Fertilizer Development Centre (IFDC). Morocco : World Phosphate Institute and NFDC work jointly in promotional activities particularly on balanced fertilization. production and trade in addition to studies on Plant Nutrition Management  World Phosphate Institute (IMPHOS). National Fertilizer Secretariat. France : NFDC is a member of IFA and shares international statistics of fertilizer consumption. Manila. Egypt : NFDC has signed a MOU with EFDC for technical co-operation in the field of fertilizer use development activities.  International Potash Institute (IPI).  Egyptian Fertilizer Development Centre (EFDC). Philippines. Cairo. FADINAP and jointly had carried a number of studies.  Other International Institutions : NFDC shares information with number of national/regional institutions such as : Fertilizer Association of India. Switzerland : IPI and NFDC has close technical collaboration and some joint studies on potash use development are carried out in the country. Muscle Shoals. Sri Lanka and Arab Fertilizer Association.  International Fertilizer Industry Association (IFA) . establishment of soil test crop response calibration studies. Fertilizer and Pesticides Authority. USA : NFDC has close technical collaboration with IFDC in human resources development and exchange of technical know-how. 45 . training programmes and information management/dissemination in the country.

the demand has flattened out gradually. The urea market is dominantly shared by three manufacturers namely. Dawood Hercules Chemicals Limited. The other manufacturer controlling any significant market share is Pak Saudi Fertilizer. 46 . But. has helped the country in achieving self sufficiency in the production of urea and. Still the off-take was comparable with the consumption in the pervious two years. DEMAND VS SUPPLY The demand for urea has been increasing consistently and significantly. Indigenous production of urea has improved requiring lesser import of the commodity. on the other hand. Fauji has the largest production capacity and contributed 46 per cent of the total sale in 1997 followed by Engro 20 per cent and Dawood 11 per cent. according to the manufactures. Engro Chemical Pakistan Limited . This is due to two factors: the government of Pakistan (GoP) besides offering various incentives to the fertilizer manufacturers to keep the cost of production low also extending soft term loans to growers for the purchase of various inputs. The demand for phosphatic fertilizer took a quantum leap registering a 16 per cent increase. It was encouraging to note that urea off-take during these six months increased by 18 per cent as compared to the corresponding period last year. Fauji Fertilizer Company Limited. FFC-Jordan Fertilizer Company Limited is a joint venture between Fauji Fertilizer Company and a Jordanian company. Various types of fertilizers are used in the country but urea remains the commodity with in the largest demand sector. has reduced the foreign exchange expenditure on import of the product.FERTILIZER INDUSTRY’S PERFORMANCE Three leading manufacturers of urea in the country have recently released their accounts for the first half of 2005. The manufacturers have been able to take the fullest advantage of the GoP policies and have expanded the production capacities over the years. This. on the one hand. All the three are listed at the Karachi Stock Exchange.

They say that they have been importing expensive urea in the past and selling at lower prices – virtually subsidising urea sale — a responsibility of the government. At this time the GoP must protect the local industry. it is a temporary phase as there is an over supply situation in the global markets. In their views. However. with the enhanced availability of indigenously produced urea and an elaborate dealers network the manufacturers have been able to minimise such incidence. The manufacturers do not agree with this. its installed capacity was only 148.Consumption of urea is seasonal. some unscrupulous elements used to indulge in black marketing of the commodity. if the price of urea has declined in the international market. In the past.000 tonnes per annum.2 million tonnes. some of the analysts believe that the advantage of supply of gas at concessional rates to fertilizer manufacturers is not being passed on to the farmers. The policy has benefited the country. The total installed capacity in the country now exceeds 3. However. This capacity will be further increased by one million tonnes by the end of this year when the current expansion by ECPL and FFC-Jordan starts commercial production. When the first urea manufacturing plant was established in the country in 1967 by Exxon Chemical. they should not be asked to lower the domestic price. Therefore. they suggest that efforts should be made by the manufacturers to lower urea price. GAS SUPPLY One of the factors responsible for phenomenal increase in the indigenous production of urea is the policy of the government regarding supply of gas (feedstock) at concessional rate. 47 . In their views. The policy has encouraged establishment of new units and expansion of installed capacities by the manufacturers. during the peak consumption period. And therefore. at present the international prices of urea are lower than its domestic price.

which has exploited the best advantage of the policy. the growers get more cash inflow. The country is almost self sufficient in indigenous production of urea. When there is a bumper crop and support prices are higher. The export of surplus production can be done by the urea manufacturers to pay for the import of DAP type fertilizer and completely free the GoP from its import. But. Following the losses incurred to the cotton growers on various grounds. The manufacturers also say that over the years. switched over to sugarcane cultivation. The result was that per acre yield was low and recovery of sugar was also below than the average recovery achieved in Sindh – the main sugarcane growing belt in the country. it is most probably. The cash flow to farmers is directly related to the prices of agriculture produce and the yields achieved during the preceding year. While many other industries enjoying similar incentives have not taken the fullest advantage of the GoP policies. urea has to be used to overcome the deficiency. They say that by the end of this year the installed capacity in the country will be 48 . With the commencement of DAP type fertilizer by FFC-Jordan the import bill of the commodity will be reduced partly because the country will be importing a major portion of the raw material from Jordan. therefore. urea production capacity in the country has been increased which has gradually lowered the import bill of urea. During the last few years. The urea sale is directly linked to the purchasing power of farmers and the availability of credit to them. The industry has achieved the stage of potential earner of foreign exchange for the country. particularly in Punjab. they could not get the similar income mainly because the climatic conditions of the area were not suitable for the cultivation of sugarcane. the fertilizer industry. concerted efforts should be made to make this a regular export commodity. in order to avoid further losses. the income of cotton growers was adversely affected due to curl leaf virus (CLV) attacks on cotton crop. Some of the industry experts say that the country has exported urea in the past and.NEED FOR NITROGENOUS FERTILIZER Since the lands in the country are deficient in nitrogenous material. many of the farmers.

However. for a long time. The manufacturers have been demanding. the country is expected to achieve surplus in 2007 — may be a temporary phase but the country must make the best efforts to exploit this potential. During 1997 the capacity utilisation was around 82 per cent. While the total import of urea in 1994 was only 78. This include availability of trucks and railway wagons. Market Fauji Engro Dawood Others Share 60% 20% 10% 10% 49 . of the government to expand the roads but the problem still persists. the capacity utilisation of urea manufacturing units remained low on account of load-shedding of gas. Therefore.000 tonnes.increased by one million tonnes. face serious logistic problems. heavy traffic and frequent traffic jams on National Highway as all these units are located within a radius of 100 kilometers. They also said that while all the other urea manufacturing unit had increased their installed capacity. Engro. The plant has been running above designed capacity in the past. To substantiate their point of view they quoted the example of Dawood Hercules. The quantities imported over the year have varied sharply. According to these analysts. Dawood Hercules had not been able to expand its capacity in spite of increasing demand for urea in the country. and import of another 450. the other group believes that the industry is still to achieved the status of potential export earner.000 tonnes is expected before the end of the year. during the last few years. LOGISTICS During the peak demand period the three urea manufacturers. Fauji and Pak Saudi.

the annual production capacity will be enhanced to 850. the project economics remain unchanged due to enhancement in gas utilisation efficiency. The Company operates on a gas network which is primarily domestic consumer oriented.Engro Chemical Pakistan Limited. It is believed that the average capacity utilisation for the year will improve to 90 per cent 50 . After undertaking major expansions.000 tonnes per annum besides improving plant energy efficiency and strengthening the environment conservation measures.000 tonnes of urea annually. However. The project cost due to the change in scope and delayed commissioning has increased from US$ 59 million to US$ 72 million. Engro Paktank Terminal Limited. formally known as Exxon Chemical Pakistan. immediately results in diversion of supply to domestic consumers particularly in winter months. The jetty and chemical storage facility at Port Qasim was built at a cost of US$ 65 million. fertilizer plants in some other areas were able to achieve at least 10 to 12 per cent production above the designed capacityindicating capacity utilisation at 85 per cent as against a capacity utilisation of 76 per cent during the corresponding period in 2004. Dawood Hercules Chemicals Limited has not been able to enhance its production capacity lately. was established in 1967 with an installed capacity to produce 147. the 50:50 joint venture of the Company with Royal Pakhoed of The Netherlands was formally inaugurated in May this year. 4 billion.000 tonnes per annum. It will have a capacity to produce 100. The Company has already expanded the urea production capacity to 750. ECPL is diversifying its operations. The project cost is estimated around Rs. After the completion of current expansion programme. The project is also being built at Port Qasim.000 tonnes of resin annually. The delay in manufacture and shipment of some critical equipment by an overseas supplier has delayed completion of project from March 2004 to last quarter of the year. Engro Asahi Polymer & Chemical Limited (EAPCL) is a joint venture of ECPL with Asahi Glass and Mitsubishi Corporation of Japan for the production of PVC resin. Any increase in demand for gas or reduced gas availability. due to the fault in the system. according to the Company sources.

Efforts should be made to enable the industry to earn foreign exchange after freeing the country from its import liability.provided there is no load-shedding of gas. 51 . This would not only improve the availability of the product but would also result into greater competition. However. approximately one million tonnes of additional urea manufacturing capacity is expected to come on stream in the country. With the present downward trend in the international price of urea. to achieve capacity utilisation above designed capacity the Company needs supply of gas at optimum level. OUTLOOK By the end of year 2005. It is necessary that the government abides by the policy and meets industry demand for allocation of additional gas at reasonable price. the ability to recover escalation in cost through higher prices will be limited. Besides. To remain successful in the tough competition it will be necessary for the manufacturers to focus on cost control and improved productivity. To ensure availability of urea at competitive prices the government must avoid any escalation in the gas (feedstock) prices in the near future as the government intends to enhance production of food and cash crops in the country. The policies of the government assign the highest priority to allocation of gas for the fertilizer industry to boost agriculture production in the country. This will not be possible without improving the pipeline network. the industry has become a potential foreign exchange earner.

HI(M) (Retired) DIRECTORS Dr. Haldor Topsoe Mr. HI. Syed Muhammad Amjad. Gen. SI(M) (Retired) Mr. Munawar Ahmed Rana (Retired) NOMINATED BY Fauji Foundation Fauji Foundation Fauji Foundation National Investment Trust (NIT) Fauji Foundation Fauji Foundation Government of Pakistan (GOP) National Bank of Pakistan (NBP) National Investment Trust (NIT) Pak Kuwait Investment Company Fauji Foundation Responsibilities. Powers and Functions of Board of Directors 52 . Nadeem Inayat Mr. Aftab Ahmad (Retired) Brig. Tariq Iqbal Khan Brig. Arshad Shah. Qaiser Javed Brig.BOARD OF DIRECTORS Chairman Lt. Mahmud Ahmed. Istaqbal Mehdi Brig. Gen. HI(M) (Retired) Chief Executive Officer and Managing Director Lt. Khawar Saeed Dr. Ghazanfar Ali (Retired) Syed Zaheer Ali Shah Mr.

The board exercise its powers to carry out its duties with a sense of object judgment and independence in the best interests and the company has circulated a” statement of ethics and business practices” to establish a standard of conduct. delegations of financial powers.The role and responsibilities of the chairman and the chief executive officer are distinct. Each year. bad debts. as a model corporate citizen .safety and environment . acquisition and disposal of of fixed assets and write-off inventories. the director attend the orientation coerces of their duties and responsibility to manage the affairs of the company on behalf of the shareholders. investments and disinvestments of funds with maturity period exceeding six months. policies and strategies along with maintenance of their record have been delegated to the management under the supervision of the Chief Executive and Managing Director of the company and is executed and controlled through management committees. donations. loans and advances. transitions with related parties. The board monitors the operations of the management through three standard committees. clearly defined and documented and are carried out separately by the two officers. these courses are also attended by the management of the company. The board has also adopted vision and mission statements and an over all corporate strategy for the company and formulated policies including risk management. charities.terms of credit and discount. for the board and employees of the company. Implementations of the decisions. borrowing. healthy . procurement of the goods and services marketing . Management 53 . decisions on material transitions or significant matters are documented through resolution passed at their meetings and circulated for approval. human resource management including succession planning . loans and advances.

54 . Mahmud Ahmed HI(M) (Retired) GENERAL MANAGERS General Manager Technology & Operations Mr. Gen. Muhammad Sadiq General Manager Admin General Manager HR General Manager Technical Operations Mr. Muhammad Saleem Suleman SI(M) (Retired) Meetings of the Board. Abdul Waheed General Manager Industrial Relations General Manager Plant (Goth Machhi) Mr. Tahir Javed General Manager Plant (Mirpur Mathelo) Syed Iqtidar Saeed COMPANY SECRETARY Brig. Abdul Waheed Sheikh General Manager Finance (Operations) Mr.Chief Executive Officer and Managing Director Lt. Abid Maqbool General Manager Marketing Dr.

 In these meetings the issues generally discussed are:  Approval of quarterly financial statements  Approval of half yearly financial statements  Approval of annual financial statements  Annual business plans  Annual budgets  Quarterly forecasts and annual forecasts  Cash flow projections  Performance monitoring  Internal audits reports  External audit recommendations  Agreements and contracts  Amendment of laws  Agreement with staff unions’ Collective Bargaining Agents (CBA)  Status of payments of debts and obligations and repayments of loans The board. In 2004 a total of seven meetings were held which were also attended by chief Financial Officer and the Comp[any Secretary.The chairman presides over meetings of the board and encourages the participation and contribution of executive and non executive directors. The directors meet at least once in each quarter. after each meeting. 55 . The chief Financial Officer and the Comp[any Secretary are the employees of the company and are not entitled to cast votes at the meetings. Minutes of each meeting are recorded and circulated by the company within 30 days. gives the recommendations to strengthen and formalize the corporate decision making process. Written notices of the meetings along with agenda and its details were circulated seven days in advance. Additional meetings are called upon when required.

 Tries to devise strategies to over come problems if any. 56 . These meetings are presided over by GMM. In every month a monthly meeting is held in which reports for the month of all departments are presented to GMM. Annual meeting of all the managers of Marketing Division is also held.Meeting of the Marketing Division. All these meetings are held at Lahore marketing office. Sales performance of all sales officers are compared with targets Best sales officer of the month is selected and rewarded. Sales of all regions are rewieved. Expenses for the month are approved. In monthly meetings the targets and plans for next month are also set. In these meetings monthly sales of FFC against the same period of last year and monthly sales of competitors’ are also analyzed. All the heads of departments meet every Tuesday to  To present the weekly reports to GMM  To discuss the sales situation  To look at the competitors’ activities  To monitor the performance against monthly and annual plans  To monitor fertilizer supply and demand situation.

Marketing Network 57 .

Planning 11. IT Unit 9. Finance 8. Human Resources 5. General Manager Marketing 58 . Regional Office Lahore 14. Sales North Zone 13.Departments in Marketing Division Marketing Division Lahore contains the following departments. Warehousing 3. Procurement 7. Sales Promotion 12. Distribution 2. Administration 4. 1. These departments are listed according to the schedule of my internship schedule at the office. Technical Services 10. Industrial Relations and Welfare 6.

Introduction of All the Departments: Sales Promotion No of the executives Department Head Senior SPO SPO No of the Staff Total employees Objectives  To create . Sultan Ahmad Mr.augment and maintain the demand of FFBL and FFCL products  To enhance and sustain brand image and corporate image  Improve company visibility in the mind of consumers  To safe guard company logo  To strengthen brand loyalty 3 Mrs Nabila Mr. Iqbal Ahmad 3 6 59 .

Muhammad Sadiq Zia Mahmood Minhas Functions of North zone  Conduction sale forecast for regions include in North zone  Monitoring sales allocation as per decided ratios  Monitoring daily sales  Studying competitors price structure  Co-coordinating regions included in North zone  Managing sales force of North zone  Checking and inventory  Coordination wit top management 60 . Lahore 2.Khan 4 5 3 5 Dr. Sahiwal 4. of staff Employees Total Regions 1. Faisalabad 3.I.) Regional officers No. Off. D.Sales North Zone General Manager Marketing Senior Sales Manager North zone contains these regions Total No of Management Employees (lhr. Peshwar 5.

Arshad Mahmood Mr. Muhammad Sadiq Zia Mahmood Minhas Mr.For three days Tuesday –Thursday the officers are on field visits and for rest 2 working days they perform their office work. Gujranwala 2.Din 4. M. The districts included in Lahore region : Lahore Region 1. It is actually involved with direct sales of fertilizer and interacting with dealers. Ensuring availability controlling warehouses  Monitoring of product  Monitoring and keeping record of turnover of productivity REGIONAL OFFICE LAHORE General Manager Marketing Senior Sales Manager Regional Manager Sales officer Lahore Technical sales Officer No. Rawalpindi 5. Hafizabad 61 . Sheikhupura 3. Masood Mr. The regional manager.B. regional TSO and the sales officer Lahore district are working with assistance of stock members . of staff Employees Dr. Zahid Nawaz 3 The regional office Lahore is a front line department. Sialkot 6.

of staff Employees Dr. Objectives of Distribution Department  Ship out entire production of FFC and FFBL plants and imported fertilizer in accost effective manner(3. Salman Ali 3 Distribution department is of the major department helping the sales force. Afzal Mughal Mr. Riaz Ahmad Mr. The primary function of distribution department is to ensure effective and efficient distribution of product from plants up to the final customers.Shakeel Ahmad Mr. their sales and closing stocks  Appointing and terminating dealers as regard to their performance.Activities  Monitoring product wise /district wise achievement with respect to targets  Monitoring current market situation with respect to fertilizer industry  Monitoring competitors activities in detail  Managing warehouses. 62 .4 MT approx)  Satisfying 3580 dealers . 1632 direct customers and 169 warehouses. Muhammad Sadiq Mr. literate goal is to have a strong dealer network Distribution Department General Manager Marketing Senior Distribution and Warehousing Manager Senior Executive Distribution Executive Distribution Distribution Officer No.

 Plan and undertake self imports/exports and ensure prompt handling . port authorities and suppliers. timely delivery and documentation.  Coordinate with plant management to ensure smooth operations. Truck generation for 1556 sales points. NLC. quality packing .correct weight.  Maintain liaison with Pakistan railway . Transportation Arrangements  Private trucking contractions  NLC  Pakistan railways Dispatches 2004 Fig in KT Ex Goth Macchi Ex Mirpur Mathelo Ex Bin Qasim Ex Port Total Road 1348 652 871 244 3315 Rail 111 73 85 12 282 Total 1459 725 956 256 3397 Ratio 92:08 90:1 91:09 95:05 92:08 63 .  Follow up of product quality complaints.  Monitor packing availability and arrange safe storage of surplus production during lean months.

Asad Sultan Mr.Retd.Customer served Dealers Direct customers 3580 1632 Total 5212 Warehousing Department General Manager Marketing Senior Marketing Service Manager Senior Distribution and Warehousing Manager Warehousing Manager Senior Executive Warehousing Warehousing Manager No. appointment of handling contractors. Ahsan khan 3 The ware housing department is involved in completing the formality For hiring And dehiring of warehouses (on need basis) . Shakeel Ahmad Brig. Muhammad Sadiq Mr. Riaz Ahmad Mr. watch and ward contractors. This department works in collaboration with distribution department. 64 . The record of inventories is maintained and physical inspection of the warehouse and product are carried out to ensure safety and security. of staff Employees Dr. Ghulam Rasool Sahi Mr.

Warehousing department is considered with processing of o Lease agreements o Watch and ward agreements o Handling agreements o Watch and ward bills • • • • Conduct the training of warehouse supervisors. Preparing the operational .Functions of warehousing department  Coordinating of warehouse department with regions regarding warehouse selection. training of supervisors. capital and revenue budgets on yearly basis. Formulating warehouse plans. Preparing weekly capacity reports. Zone wise Warehouses and capacity Zone North Central South Total Regions 5 5 4 14 Warehouses 63 53 49 165 Capacity MT 136700 119400 78400 334500 65 . planning capacity of warehouses    To conduct inspections of the warehouses on planned and surprise basis Each warehouse is inspected around 17 time a year.

Type of Warehouses  Strategic Warehouses  Permanent warehouses  Temporary warehouses  Purely temporary warehouses s 66 .

Chowkidars. telephone. Cars. Muhammad Khalid Maj. Jeeps and Poor vehicles Ensure availability of utilities like gas. reception. electricity. E-mail. electricians and drivers) Ensure proper maintenance of the office premises and guesthouses Take disciplinary action under the rules where necessary Disposal of unusable assets of company Managing three major types of transport system related to marketing division. • • • Company maintained Company assisted cars/Jeep Pool transport 67 . and Photocopy facility.e. of staff Employees Dr. Retd. Muhammad Sadiq Col. Under take protocol duties. Retd.Administration Department General Manager Marketing Administration Manager Administration Esxecutive No. For company gussets and officers Ensure the implementation of company policies and rules Provision of uniform to entitle staff (Qasids.e. i. transport. Khaani 3 Administration department is involved with conducting the administration function of the fauji fertilizers of the marketing division Functions Provision and maintenance of transport i. and ticketing etc.

0

Transport holding
Holding of marketing division transport is as under Company assigned cars Company assisted cars Company maintained cars 23 91 63 Total=177

Human Resource Department
General Manager Marketing Administration Manager Senior Executive HR HR Officer-I No. of staff Employees Dr. Muhammad Sadiq Col. Retd. Muhammad Khalid Col. Retd. Asad Sukhaira Mr. Qamar 3

The FFC Management, acknowledging the importance of human resources has always placed personnel management at the top of its priority list. The Human Resources Department, therefore, right from the inception of the Company has played a vital role in steering the Company through all its phases, operations and progress. The functions of Human Resources Department vis-a-vis personnel management and human resources development are going side by side and it is due to the progressive approach and dynamic philosophy of the management that Personnel Management remains abreast with the latest style of management ensuring high level of motivation and satisfaction of the work force under varied situations. Personnel policies are kept updated and are periodically modified to respond to the latest socio-economic changes and market trends of the country.

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Hiring quality manpower, keeping them happy, satisfied and motivated are the pillars of the Human Resources Department; justice, fair play and merit oriented treatment are some of the ingredients of processing cases by the Human Resources Department. For Human Resource development, another aspect which receives its due share is training. The employees are exposed to various kinds of cross training, technical courses, management courses, workshops and seminars both at home and abroad. At Plant site, the Company has a Technical Training Centre, which is unique, and the only centre in Asia having a true replica of the Plant for providing realistic training as far as possible, to the employees. Employees' welfare has all along received due consideration by the Management. A number of agreements have been signed with CBA Workers Union, resulting in handsome remuneration packages to employees. The company, since its inception, has undertaken five salary revisions for Management employees, to remain amongst the top paying organizations of the country. It is due to the sheer sincerity, welfare oriented policies and concern for every single employee that there has never been any strike, lock out or go slow in FFC. Human resources department of the marketing division is responsible for the employees related to marketing division. Maintaining their attendance and payroll of the staff while officers and executives get their pay directly from head office. Functions Work out warehouse supervisor visor’s requirements in consultation with regional manager and arrange recruitment and transfer activities according to head office instructions. 1. Maintain up to date personal records, statistics including leave records , relating to management and non- management employees. 2. Interpret company policy and provision of necessary ruling where required.

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Handling cases relating to following subjects
 Employment/appointment of non management employees. Temporary / contract / daily wages according to authorization.  Promotion of non management employees  Pay and allowances of non management employees.  Leaves (annual, causal, special, sick) are managed for all employees.  Transfer claims of all employees.  House/rent allowances advances  Also the House building loans

Industrial Relations and Welfare Department
General Manager Marketing Administration Manager Senior Executive IR & W No. of Staff Employees 2 Dr. Muhammad Sadiq Col. Retd. Muhammad Khalid

The IR department in organization is formed under the IRQ 69 [industrial relation ordination] of Punjab labor laws act and is under the approval of Management & joint Labor Department of Punjab Govt .IR basically deals with the Labor laws implication in an organization and has to negotiate legislatively with the CBA certified labor union at the office .The criterion for formation of IR department is a office having at least 50 employees and its provisions given in the Punjab as well as GOP labor laws. The IR department not only negotiates with the labor unions but also responsible handling with the labor

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Muhammad Sadiq Col.14 regions.3 zonal officies.At present there are 24 courts in Pakistan. Retd. Ghyoor Procurement department at marketing is responsible for the purchases.Finance and distribution offices at Goth Macchi .s. Any employee who may have a complaint about the management can go to the court so IR department representative follow the case Major Activities  Leave records of workers  Appointment records  Record of upgrading  Annual increment record  Vertical performance appraisal records  Staff no allocation Procurement Department General Manager Marketing Administration Manager Senior Executive procurement Manager Procurement No. of Staff Employees 2 Dr. There are labor courts at regional level .One of the functions of IR department at FFC to tackle with all types of court problems. Purchases for the following offices are made by Lahore Marketing Division.Mirpur Mathelo distribution office at FFBL port and head office requirements GOALS “To procure quality goods at the most economical and competitive rat 71 .5 FAC. Khalid Col. Retd.

FUNCTIONS
• • • • Quality, Economical and timely procurement of items /spares for marketing division and plants ensuring complete backup support /after sales services. Price enquiry of different items to estimate the price so that the budgeted amount may be endorsed on the PR before initiation Disposal of obsolete /surplus/scrap material Continuous updating of reliable vendors list for both plants and marketing division

PROCEDURES INVOLVED IN PROCUREMENT STEPS
• • • • • • • • • Raising of purchase request Approval of PR Request for quotation Bid opening Comparative statement Placement of order Delivery receipt of goods Verification of bills against orders Final payment

IT DEPARTMENT
General Manager Marketing Administration Manager Senior Executive IT No. of Staff Employees Dr. Muhammad Sadiq Col. Retd. Khalid Mr Sherazi

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Information Technology unit was properly setup in FFC Marketing division Lahore. IT unit is one of the most important departments working at marketing division Lahore. The Unit has to play a leading role in the marketing division in order to enable all the department to perform all their functions effectively and efficiently .It enables the management to make timely decisions.

OBJECTIVES OF IT UNITS
• • • • • To meet computing needs of all the departments of all the departments of the marketing divisions. To design and develop, efficient, effective and user friendly information systems To provide the maintenance services and proper updating of all these systems To properly cope with the security and ethical challenges related to information technology and information system To design proper feed back and control procedures toward achievement of its goals.

SYSTEMS DEVELOPED BY I.T UNITS
• • • • • • • • Sales accounting system General accounting system Order processing system Regional information system Sales promotion system Distribution management system Procurement system Human resource system

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Finance department
The finance department working at marketing division Lahore is responsible for all the sales collections either sales are made directly through plant or through warehouses. the finance department is divided into two sections. 1. General accounting 2. Sales Accounting

Specific responsibilities of General accounting
  Payroll of permanent and temporary staff employees Deduction of income tax from payroll and deposition in govt. treasury.  Forwarding detailed of provident fund contribution of permanent employees to head office.    Reimbursement of regional imprested/distribution imprested. Forwarding of L/C opening request to head office for import of fertilizer. Processing of export related documents.  Deduction of income tax from various supplies and deposit into government treasury.  Maintenance of books of account including fixed assets ,supplies , employees etc    Payment of telephone , electricity and medical bill Payment in respect of bags and line for imported fertilizers Clearing and forwarding charges in respect of import of fertilizer

Specific responsibilities of the Sales Accounting
  Maintenance of dealership records Processing and banking of sales and proceeds received from field force for the sale of fertilizer

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review by management. approval Budgetary control  Circulations to cost controllers  Quarterly budget variance reports  Monthly revised cash flow statements 75 . Transfer of data to plants for shipment Transfer of funds to head office recording of invoices for sales ex-warehouses Receiving data from plants for direct sales Processing of bank Guarantees for secured credit sales Monitoring of unsecured credit sales to fauji sugar mills/forms Preparation of pricing and discount structure for various fertilizers Receiving data from plants for warehouse shipment Recording of stock movement reports Overall reconciliation of stock movement with intimation of head office Follow up receivables for sale through rail Recording of stocks receives from FFBL for sale on their behalf Sending the information regarding dealers balance recovery of receivables on various accounts to field force for           Annual Business plan of FFC Review and development of  Historical data  Key assumptions  Inputs from regions Review meeting  SMs/RMs/Deptt. Board of directors.Managers  GMM Collation and submission to Head office.

 Review of import requirements of fertilizer FFC related statements/ reports Daily / fortnightly  Remittance status  Sales status Monthly  Trial balance and related schedule  Receivables report along with age analysis  Revised cash flow statements  Finance dept progress report  Capital budget utilization statues  Progress report of sales and w/h dispatches  Stock report to insurance company and banks  Bank reconciliation statements  Tax deduction at source  Dealer network status report Quarterly  Budgeted vs actual expenses comparison  Performance review of marketing operations Yearly 76 .

Mission Statement of Technical Department ‘Help the farmer optimize utilization of his resources to rejuvenate farm productivity and increase his income’ Objectives  Farmer education /training  Dissemination of latest and complete package of technology  Promotion of balanced fertilizer use  Focus on increasing farmers income  Counter fertilizer misconception  Enhancing crop yield/overall crop production  Supplement government effort for agricultural 77 . Company is providing technical services all over the country free of cost. Naseem Ahmad Technical department is providing support function to sales. Muhammad Sadiq Mr. Senior technical executive who is reporting to SMSM heads the technical department. Trial balance and related schedule  Proposed capital and revenue budget  Inputs for tax returns  Inputs for company’s annual reports Technical Department General Manager Marketing Technical Services Manager Technical Services Executive Services Officer Dr. The 14 technical officers are serving in 14 regions all over the country in coordination with sales officers. AurangzaiTechnical Mr. Riaz Ahmad Mr.

farm visits and group discussions. Khan. Moreover. Soil Testing is a valuable tool to propagate appropriate and balanced use of chemical fertilizers and to identify soil problems.I. providing multifarious advisory services through crop demonstrations. Fertilizer recommendations are developed on the basis of soil analysis and recommendation reports are delivered to the growers for proper and balanced fertilizer use. Each centre has a team of five Agricultural Experts.G. Soil/water samples are collected from farmers’ fields and analyzed in the laboratories. farmer meetings. The soil/water testing and micronutrient analysis facility is offered free of cost. Jhang. The company is providing quality farm advisory services all over the country through its 5 Farm Advisory Centers and 14 Regional Technical Services Officers. we have 78 . Our organization in pursuit of its national commitment and moral obligation maintains regular contact with farmers and Agricultural Institutions to ensure constant and efficient transfer of latest technology. Farm Advisory Centers are located at D. Mirpur Khas and Kasur. field days. Khan. Besides these five farm advisory centers. D. FFC has also established a micronutrient testing laboratory at Farm Advisory Centre Jhang having Atomic Absorption Spectrophotometer and other analytical instruments. for increasing the agriculture production in general and the farmers’ economic returns in particular. village meetings.Functions  Establish proper linkage sales and technical services  Increase and faces on farm management expertise  Professional development on personnel  Collaborative research Farm Advisory Services Fauji Fertilizer Company Limited has been providing Agricultural Advisory Services to the farming community throughout Pakistan since 1981. crop seminars. All the centers are fully equipped with modern sophisticated computerized Soil & Water Testing Laboratories and high-tech extension equipment.

vegetable. To further strengthen our advisory services and facilitate our farmers. For any further information or agricultural advisory service. we publish a quarterly Urdu News Letter “Zari Report” containing season specific information regarding crops. vegetables. orchard brochures. their application methods and their economic use.14 Technical Services Officers based at 14 Regional Offices of FFC spread all over the country extending these services in their respective areas. Following is the list of crop brochures available with us: • Wheat Brochure • • • Maize Brochure Banana Brochure Oil Seed Brochure • Sugarcane Brochure • • Mango Brochure Vegetable Brochure • • • Rice Brochure Citrus Brochure Guava Brochure • • • • Cotton Brochure Potato Brochure Apple Brochure Salt-affected Soils Brochure These brochures and Zari Report are also available in the Kashtkar Desk of our website . we also publish crop. improved agronomic practices and articles on agricultural issues. We encourage our farmers to get registered on our mailing list by sending a request in writing or through e-mail at the following addresses to receive copies of our published material free of cost. wheat. For a stronger direct link and timely guidance of farmers. a “Fertilizer Guide Book” has also been published containing comprehensive information on various fertilizers available in Pakistan. 79 . Cotton. FFC has also adopted the pragmatic approach of telecasting crop documentaries on PTV before the onset of sowing season of major crops. and orchards grown in Pakistan. In these documentaries all the components of crop production are covered with sufficient elaboration. To improve the fertilizer use efficiency and to obtain optimum crop yields. posters and pamphlets containing latest information regarding production technologies of crops. sugarcane and rice documentaries can be viewed in the Kashtkar Desk of our website. fruits. agro-grams. please visit any of our nearest Farm Advisory Centers or Regional Offices closer to you.

Chiniot Road. Lahore Phones: 042 – 6365119 Farm Advisory Centre D. Vehari Phone: 067-3361913.heads it. Dial Road. Kasur Phone: 0492-671848.671118 Farm Advisory Centre Kasur Farm Advisory Centre Vehari Faqiriay Wala. D. 3 – km Khudian Road.5 – km. The department coordinate the activities 80 . Senior executive planning who is responsible to SMSM . 0492-2003977 2. Khanewal Road. Khan Jhang Phone: 0961 – 741701 Near Chenab College. Khan Farm Advisory Centre Jhang Faqir Manzil. 11-Shahrah-e-Aiwan-e-Tijarat. 3360223 Planning Department The planning department is the integral part of fauji fertilizer company.I.Technical Services Department (Marketing Division) Fauji Fertilizer Company Limited Lahore Trade Centre. Phone: 0471 .I.

These reports are prepared on need basis  Preparation of Fertilizer Industry Report  Reviewing FFC sales performance on quarterly basis  Develop plans for training of officers  Monthly analysis of FFC ex-plant road and rail fright analysis 81 .FFC performance  And industry situation. Functions  Coordination and development of annual business plan  Provision of historical information to regions and senior sales managers for developing sales forecast  Finalizing sales forecast with coordination related sales force  Preparation of fertilizer data book  Monitoring international fertilizer price trend  Preparing Pakistan industry Urea market participation reports  Chairman’s report for board of directors meeting containing analysis.Major responsibility of the department is collection of information about competitors and analyzing their strategies.of all other departments within marketing division .

Board of Directors and Executive Committee devise strategies keeping in view the vision. Top management and middle management are given powers to carry out the operations for the achievement of long-term objectives. Corporate Governance Practices Good governance has always been vied as an inspiration by the board in enhancing the timeliness . They encourage the views and suggestions of employees as well. These strategies are executed according to the instructions of top level of hierarchy. comprehensiveness and transparency of financial and non financial information and the board endorses the practices contained in the code of corporate governance of the listing regulations in performance of the board’s duties and enforcement at all management and non. Corporate responsibility for the overall strategy .management levels. assets management and operations of the company and for identifying and overcoming any challenges . polices are devised at the peak level. mission and the objectives of the company. 82 . It helps in the effective implementation of the formulated strategies.Policy Formulation Procedure At FFC. accuracy. business and macroeconomic risks faced by the company and devising business ventures for sustained growth in long term profitability of the company aimed at enhancing the shareholders returns.

some direct spotchecking has an important place in the audit program even where controls are well developed. Among the factors determining the level of deposits in a FFC are some that the FFC usually cannot affect significantly. Good auditing can be said to consist of substantial verification of the accuracy and completeness of a FFC records and of the safety and efficiency of its operations. POLICIES REGARDING EMPLOYEES Some of the policies adopted by the FFC regarding employees and personnel are as: 83 . POLICIES FOR ATTRACTING DEPOSITS Although management and directors of FFC do have absolute control over the level of their deposits. some of the leading are monetary and fiscal policy and the level of general economic activity. they can never the less influence the amount the FFC hold. Because deposits are so important to the profitable operation of FFC. In FFC most direct form of auditing is simple rechecking have a second person redo what someone else has already done.Managerial Policies: AUDIT PRACTICES A number of excellent manuals are available for the professional auditor or the member of a director’s examining committee who wishes to familiarize himself with specific audit techniques. In addition to this. the FFC tends to compete aggressively for them.

the FFC maintains close relationships with guidance directors of local high schools and colleges it also encourages employees to bring in their friends and it see to it that students have opportunities to visit the FFC and head about some of the advantages of working there. interest or previous experience for clerical personnel.e. TRAINING The newly hired employee generally starts as a clean state on which nothing has yet been written. The FFC urges the recruitment of several young MBA’s at competitive salaries. The employee’s attitude towards the FFC and job are shaped by the first few weeks of experience. it behooves management to look for prospective employees who are believed at the outset to have officer potential because of their education. New employees have a fundamental need for a broad idea of their job. aptitude. Thus FFC emphasizes both cases i.in short for orientation. There is a known need for officer replacements in five or 10 years. As we can say. good training is an art if not a science and should be entrusted only to those within an organization who have an aptitude for it or who have received special training in the instruction of others.RECRUITMENT The standards set by FFC when it first selects its employee largely determine the caliber of the staff in the future. The FFC allows summer employment programs to allow college students to see the challenges of fertilizer careers and are always alert for able and interested people employed at other companies or in other fields. to challenge the 84 . In the process of learning the first few simple tasks the employee grasps the relationship between what he is doing and the work of the department or the FFC as a whole.

A more effective incentive is a well designed profit sharing plan with benefits that vary from year to year in direct proportion to the financial success of the FFC operations. The salary administration of FFC is reasonable as at many factors contribute towards the working conditions job security. listens as well as interacts. Such meetings are regular features of efficiently operated FFC and take a wide variety of forms. The competent officers discuss rather than directs. SALARY (PAY SCALES) The principal criteria for a well considered salary policy are. gain clarity if they are put in writing. the relationship of the salary paid to one person to that paid to others for jobs of comparable difficulty within the FFC. COMMUNICATION A good deal of verbal interchange takes place in FFC each day. hospitalization. The major portion of communication necessary for the day to day operations of a FFC consists of simple person to person conversation more complex ideas. It is a two way street. second. FFC provides fringe benefits to or better than those offered in other industries pension plans. Thus the FFC is talented in the ability to write clearly which is an invaluable management talent that needs constant practice and development.employees so that they will continue to be interested in FFC and will realize the need for continued training as their responsibilities become greater. and group life insurance are the rules prevailing in the FFC. the relationship of the FFC salary scale to salaries paid for comparable jobs in the community and the industry and. 85 . first. ranging from daily or weekly officers meetings to annual weekend conferences. The FFC makes the communication channel more effective by staff meeting eventually it is an extent ion of the conversational or discussion technique but embraces a larger segment of the organization. however. prestige and opportunity for advancement all enter into the competitive package.

86 . practices/styles FFC has the strong management system to run the business. There are many planned policies which are adopted by the company. MOTIVATION LEVEL Job design for motivation is another personnel approach that has been increasingly emphasized in recent years. as it deals with many leading institutions. Job contents. The officers employed in the FFC are mostly graduated from either foreign universities or some of the leading universities in the country. Jobs are being designed to fit the people who hold them in the hope that greater employee motivation (which is essential to higher productivity) will result. making them feel insecure about their jobs. Major managerial policies. Sensitivity training and / or organizational development programs have been used to aid in the broad development of Top executive talent and teamwork. Today FFC is one of the most successful companies and its all due to its superb managerial policies. Mostly the employees are hired on contractual basis.EDUCATION: FFC focuses on the higher quality of education. GROWTH OPPORTUNITIES FFC provides growth opportunities to its employees and officers. methods and relationships are structured not only to satisfy technological and organizational requirements but also to accommodate human needs for meaningful and self-fulfilling work. RETIREMENT The FFC does not emphasis on having regular employees. Therefore most of the time the employees are interested in finding secure and more appropriate job.

87 . There are certain other essential things about the sales strategies. Marketing and Sales Policies Marketing and sales departments serve as backbone in the company. who are actually. Just because of this policy the company continues to benefit from the efforts of its valuable people. In case of consumer products the freight are born by the company. the cost of change in design is charged to the customer. In case of industrial products freight are the responsibilities of the customer. The management believes that their employees are major assets of the company. however. Moreover. Meetings are held where decisions are taken for the efficient functioning of the company’s marketing and sales areas because the company depends a lot on its marketing and sale policies.Human Resource Policy FFC has strong human resource policy. supports all these sales strategies by product development through the creation of public awareness. promotion and customer contacts. The various personnel strategies can be that the employees are chosen solely on the basis of merit and they are given monetary rewards and incentives with a view to increasing the commitment and motivation of the employees. Marketing. the strength of FFC through training and development activities the human resource policies aim at the improved working conditions all over the organization. The customers are offered no discount and also products are sold on cash basis. Marketing budget is carefully determined and sales people incentives and salaries are reviewed from time to time. Products are sold throughout Pakistan with no change in prices anywhere. FFC has fully planned and organized marketing and sale policies. Although the salaries are not really competitive if you look at the market scenario yet the employees are quite satisfied as they are working in an excellent environment and enjoying as an employee of a market leader.

Financial Policies FFC has the well established rules for their financial transactions. They try to acquire the related companies or part of business to give a boost to the business growth. Customer Relationship FFC adopts the strong customer relationship policy. They are following 20 – 80 strategy in dealing with the customers. Before making investment future is seen rather than the present i.e. FFC has many other policies to run their business. Internal Strong Relationship Packages maintain a strong relationship between the departments. All departments are interrelated. which will increase the sales in the future. These all contribute to the success to the success of the FFC. investment is made only in the projects.Backward Integration Strategy FFC follows the backward integration to support their business. Thus synergy is given a lot of importance. They think customer as the king. It is one of the main aspects of strategic management that all the various functions performed in the company by the different departments must have interrelation and collaboration if company wants to achieve success. One of the most important strategies in this regard is of investment. 88 .

IMPACT OF MANAGEMENT STYLES ON EMPLOYEES: MOTIVATION The term motive implies action to satisfy a need. The essence of management is the activity of working with people to accomplish results. The management styles adopted by the FFC affect greatly. The way managers treat and deal with their subordinates in order to accomplish the multiple objectives of the organization is determined primarily by management system of beliefs about the nature of man and about the determinants of cooperation in an organized endeavor. and employees are motivated in order to enhance their performance and achieve the derived goals. Motivation can be defined as a willingness to expend energy to achieve a goal or a reward. direction. training communicating with and coordinating others. MORALE AND PRODUCTIVITY 89 .MANAGERIAL STYLES Management is process of utilizing material and human resources to accomplish designated objectives. MANAGING THE ORGANIZATION The management of the FFC focuses on some of the objectives that it wants to achieve. leading. The role of manager is to assemble the best work team he can obtain and then to provide a supportive motivational environment to guide that team to accomplish agreed upon objectives. It involves the organization. motivating. It involves organizing. coordination and evaluation of people to achieve these goals.

Recruitment of Workers Minimum qualification for the post of the workers is Matriculation 2nd Division with science subjects. Job attitudes and morale are quite positive for two reasons. Recruitment and Selection Criteria FFC has designed a sound but easy method of recruitment. When any department needs an employee. These are employed as "Apprentice Trainee". In case of the posts requiring some experience. previous work history and the like. training courses completed. The management believes in developing the employees according to the requirements of the organization. secondly high morale result from high motivation to produce. The workers should not be more than 21 years old and must be medically fit. except for high managerial posts where experience is must. only interview method is used to select the best candidate. which in turn advertises the vacancy in the leading newspapers and asks for the qualified people. that management should put its eggs in the basket that creates a high-motivated work force. Working conditions and supervision good. Firstly employees gain social satisfaction from interactions at the work place.The employees of the FFC possess high morale. education. The employees are happy and are also productive workers. it sends its requirement to the Human Resource Department. The guiding principles for Recruitment FFC encourages the recruitment of fresh graduates than experienced once. Sometimes other factors are considered such as length of service. If the performance of the 90 . PROMOTION FFC decisions about promotions are decided upon the basis of merit in one’s present position and ability and potential to assume the impossibilities of higher level positions. and thus exhibit high productivity. In other words we can say.

advertisements are given in the newspapers.worker is satisfied during the probation period. These applications and CVs are screened out on the basis of:  Merit. Keeping in view the time constraints. Normally workers get promotion after two years on the recommendation of their supervisors.  Budget constraints  Process The recruiting and hiring process starts from the applications submitted by the degree holders. They provide their CVs along with the applications.  Institute. the Human Resource Department contacts the authorized institutions. it sends its requirement to the Human Resource Department. 2) Recruiting & Hiring For recruiting and hiring some factors are taken into consideration. This post is not advertised. and  Experience etc. 91 . Otherwise if the vacancy has to be filled immediately. These factors are as follow:  Nature of the job. and  Time required filling the vacancy. he is hired. Recruitment of Executives 1) Job Identification When any department requires an employee. universities etc.

20 or 30 applicants (according to the job requirement) are chosen for the first interview. Then the H. Interests. Normally 30% of the applicants. and Maturity According to these observational factors rating or grading is made. Through telephone calls or letters.R Department lists out the salient features of the CVs (only the accepted CVs). Communication skills. Leadership skills. Social acceptance. for which the applicants have applied. and  Some questions about the particular job.Q. approximately 50% of the applicants are selected for the further process.  Data sufficiency. Then successful candidates are called for final interview which is taken by: 92 . the selected applicants are informed about the date and time of the interview. H. At this stage the selection of applicants also depends on the H.After this. Manager takes a test based on:  English comprehension. Relevant knowledge. After taking the test. the top 10. Then the H. Manager and the departmental head take first interview. are selected for interview. who have given the test. Normally two interviews are taken.R.R. Manager and the departmental head. Confidence. Normally 5% rating in each factor is acceptable.  Basic mathematics. First impression.  I. In this interview they observe: • • • • • • • • • Alertness.R.

After the orientation program. • • • • • • LUMS PIM Intek Solution British Council Informatics Employers Federation of Pakistan Performance & Appraisal 93 . the participants may ask to put forward a short report or presentation . Some external courses may be offered not only to the existing employees but also to the new trainees. The trainee is given a brief view (orientation) of the company.R. Manager and tells him what he has learnt in this program. In the Consumer Products Division after one year they are given the designation of “Assistant Manager Sales”. the trainee goes to H. Training & Development* Appointed persons are trained for six months. After the final interview. this orientation is two months. These courses are held in. they are given the title “Management Trainee”. rules & regulations etc. the selected applicants are sent for medical test and then the Industrial Relations Manager issues them the appointment letters. various processes.• • • • General Manager Deputy General Manager Human Resource Manager Departmental Head (sometimes) Previous traits or factors are once again examined. After the 6 months training.

various modification jobs were also executed to improve operational efficiencies. Annual maintenance turnarounds of both plants were carried out in the first quarter of 2004 and were executed safely and successfully within the stipulated time. plant monitoring. System implementation through enforcement of FFC. maintenance turnarounds are now schedule on bi-annual basis. which is filled by immediate officer. plant operating efficiencies surprised all previous records with large margins. For the appraisal of the performance. there is a Performa. This Performa is named as (PPE) Performance Planning & Evaluation.Performance & appraisal are two sides of a coin. maintenance. Plant 1 created a new record of daily urea production this year. The particulars of the candidates are written on the top of the form. Comprehensive inspection and major overhauls of equipment and machines were carried out in house . 94 .s operational. improve operations and maintain its position at the leading fertilizer manufacturer in the country. Immediate officer appraises performance. Cost effective and professional solution are adopted to address any major potential reliability threats. With on going efforts to improve plant reliability and performance. There are seven sections in this form. Plants Goth Machhi Operational performance of the plants 1&2 Goth Machhi was excellent during the year with a total “SONA” urea production of 1458 thousand tonnes. Plant Sites The year witnessed exceptional performance at every level . housekeeping and safety practices remained in the lime –light and deficiencies were overcome utilizing the gap analysis approach. Plants reliability improvements projects remained of prime importance and significant progress has been achieved by addressing major unreliable areas and chronic problems. The continued with selective investments necessary to sustain profitability .

To fulfil our commitment with the GOP for enhanced urea production.In our endeavour of self reliance in areas of critical maintenance activities. We are pleased to report that the company was able to achieve the required “SONA urea” quality level for”FFC urea” produced by the plant 3. annual maintenance turn around of the plant was deffered to 2006 after careful technical review of efficiency maintained during tge period of meet the increase in demand.3 Gcal/ Met ammonia. Plant Mirpur Mathelo Taping the potential of our recently acquired plant Mirpur Mathelo has resulted in a noteworthy efficiency of 125% of name plate capacity with annual production 716 thousand tonnes. which was formally declared As “SONA urea” on March 2004. Utilization of the safe natural gas would also result in 18 thousand tonnes of additional urea production. general water shortage in the country with frequent canal closures and declining water fliw in the rivers in the past few years has also put more strain on our water supply wells. this implantation would result in an energy saving of 0. 95 . detailed engineering of energy revamp project of plant 1 Ammonia unit is under process and commissioning is expected in 2006. 14% in excess of last year output. refurbishment of old bimetallic stripped of plant 3 was successfully completed in the fabrication shop which made this expensive equipment operational again at plant 1.The continious decline in natural gas supply pressure from Mari gas field poses a new challenge with a direct impact on production . The exchanger has completed its useful life and order has been placed for a new exchanger with modified design. ]evaluation of existing BFW heat exchanger E-211 was carried out for vibration and leakage estimation. we are confident that benefits will continue to acquire to the company by providing value added quality products to our customers. Dedicated booster compressor have been planned to be commissioned in the first quarter of 2005 to boost gas supply pressure and further expansion of raw water resources and its optimization is currently under way to meet water requirements.

new inventory management system and computer training of all employees. FFC has also planned de. the marks are modern fiber optic network . 12. Almost all the piping isometrics of Urea Hydrdolyzer projects have been approved and most of the piping / equipment erection work has been completed.To meet its commitment to the Govt .50 million per annum through improved energy efficiency. Information technology culture was successfully inculcated at the plant in order to reduce and simplify routine workload and to keep pace with modern technology. The project is ready for commissioning after turnaround 2006 and will help reduce NH3 contents of effluent water and provide additional urea production of 17 MTPD.bottlenecking of its plant three for increasing nameplate production capacity to 725 thousand tonnes annually in a normal year. Cooling tower packing replacement for another two cells shall be completed before the onset of next summer season and is expected to yield a saving of Rs. 96 .

It includes product 97 . Price 4. Place 3. However. Product 2. Place. including psychological as well as physical benefits. These components are called marketing decision variables because a marketing manager can vary the type and amount of each element. Promotion 1. Major components of Marketing Mix: 1. Marketing mix often is viewed as “controllable” variables because they can be changed.MARKETING MIX Marketing Mix consists of major components: Product. PRODUCT: It can be defined as every want satisfying attribute a consumer receives in making an exchange. there are no limits to how much these variables can be altered. They are not totally controllable. Promotion and Price. One primary goal is to create and maintain a marketing mix that satisfies consumer’s needs for a general product type.

Promotion includes such areas as sales management. and the service accompanying the product. and evaluation of channels. personal selling. product research and development. and specific pricing strategies. Mostly it is manufactured in the form of prills. but FFC is producing in prilled as well as granular forms. Place: It is the making available of products in quantity desired to as many customers as possible and to hold the total inventory. Promotion: It is used to facilitate exchanges by informing one or more groups of people about an organization and its products. transportation. 2. straight nitrogenous and most widely used fertilizer in the country. Coordination. and inventory control. Because of 98 . It includes selection. transportation and storage costs as low as possible. product testing. Product Sona Urea Sona Urea is the most concentrated solid. free flowing. readily soluble in water and both contain 46% Nitrogen. warehousing. It includes price determination.planning. Prilled and granular fertilizers are white in color. 4. pricing policies. 3. advertising sales promotional programs and all other forms of marketing communications. PRICE: It is the value that one puts on the utility that one receives of goods and services.

0 1. From nutrients' concentration point of view.87 < 1.82 ~ 2.87 Dust Free 2. it is suitable for solution fetilizers and folira application.0 ~ 5. it has got the highest quantity of total nutrients in a 50 KG bag i. Due to high solubility it can also be used through fertigation as well as by foliar application. The solubility of DAP is more than 95%.30 0. Description Physical Condition Nitrogen(%) Moisture (%) Biuret (%) Fines (%) AV Prill Size (mm) ActualStatus Prilled Free Flowing Prills 46 < 0.5 ) makes it an idea fertilizer for Basal application to meet the initial requirement of most of 99 . storage and application. Urea is the best suited to our soild because some of the salient physical and chemical charecteristices of Sona Urea Prilled and Granula are below. 32 KG of nutrients / bag. It is the widely used phosphatic fertilizer in the world as well as Pakistan.30 0.its high solubility.0 DAP Sona DAP is the most concentrated phosphatic fertilizer containing 46% P2O5 and 18% Nitrogen.80 ~ 0.e. which is highest among the phosphatic fertilizers available in the country. Its nitrogen to phosphoris ratio ( 1 : 2.0 Granular Free Flowing Granules 46 < 0. The highest concentration of plant nutrients i na bag helps saving costs of transportation. handling.80 ~ 0.

which is also an important nutrient especially for oil seed crops and it also has an ameliorating effect on salt-affected soils. it is well suited for our alkaline soils.7 FFC SOP This fertilizer is an important source of Potash. which is a quality nutrient for production of crops especially fruits and vegetables. 100 . Potash improves the resistance of the plants against pests. Potash is an important nutrient for activation of enzymes in the plant body and helps increasing sugar and starch contents. Use of potassic fertilizer in Pakistan is minimal.the crops. Its salient characteristics are listed below: Sona DAP Description Nitrogen(%) P2O5 (%) Crushing Strength (Kg) Size (mm) Moisture (%) Actual Status 18 46 6 2~4 < 0. As readily soluble in water so it can be used through fertigation as well as foliar application. which needs to be promoted for qualitative as well as quantitative crop production. SOP is well suited fertilizer for all types of crops and soil. Having an ultimate acidic effect on the soil. FFC SOP contains 50% K20 in addition to 18% sulfur. diseases and stresses like water / frost injury etc.

1035 101 .Price Sona Urea(P) Sona Urea(G) Sona DAP Sona SOP Sona Boron Rs.485 Rs. 480 Rs.

But to make the whole system very smooth a company is having well structured distribution department. The primary function of distribution department is to ensure effective and efficient distribution of product from plants up to the final customers. Objectives  Ship out entire production of FFC and FFBL plants and imported fertilizer in accost effective manner(3. quality and price are the same as suggested by the company policy. 1632 direct customers and 169 warehouses. The company also ensures that the prices of the product do not vary in any part of the country because of transportation cost.4 MT approx)  Satisfying 3580 dealers .PLACEMENT The product is distributed directly from the plants.  Truck generation for 1556 sales points. 102 . There is a great demand of fertilizers in the country and company is having in advance orders. Which coordinates with carriers both company and individuals. Because fertilizers is required in all the parts of the country and FFC being a national firm takes it as it obligation that its product is distributed trough out the country. Distribution Distribution department is of the major department helping the sales force. The contractors are responsible for any loss to the product on the way. The distribution department makes contract with private contractors to accomplish the tasks. who belong to far-flung areas. For this purpose company gives some discount to those dealers. The management also pays surprise visit at different dealers shop to ensure that the quantity in the bag.

timely delivery and documentation.  Maintain liaison with Pakistan railway .  Follow up of product quality complaints. quality packing . Plan and undertake self imports/exports and ensure prompt handling . Transportation Arrangements  Private trucking contractions  NLC  Pakistan railways Dispatches 2004 Fig in KT Ex Goth Macchi Ex Mirpur Mathelo Ex Bin Qasim Ex Port Total Road 1348 652 871 244 3315 Rail 111 73 85 12 282 Total 1459 725 956 256 3397 Ratio 92:08 90:1 91:09 95:05 92:08 103 .correct weight. port authorities and suppliers.  Coordinate with plant management to ensure smooth operations. NLC.  Monitor packing availability and arrange safe storage of surplus production during lean months.

Customer served Dealers Direct customers 3580 1632 Total 5212 Zone wise Warehouses and capacity Zone North Central South Total Regions 5 5 4 14 Warehouses 63 53 49 165 Capacity MT 136700 119400 78400 334500 Type of Warehouses  Strategic Warehouses  Permanent warehouses  Temporary warehouses  Purely temporary warehouses 104 .

105 . So. FFC in spite of all these hurdles take all the option to promote their product. But FFC does it for many good reasons one of them is to protect its brand name. Fertilizer industry is different from FMCG’s. And the reason is because demand is greater than supply. As a matter of fact.Promotion Promotion is the backbone of the successful marketing network. many problems including media and education level arises. that is SONA Actually company wants that whenever any former in the country thinks to use fertilizers the only name that should come into his mind should be SONA. IN fertilizer industry the users mainly residing in rural areas. Especially promotion becomes crucial when company needs to introduce a new product. But in fertilizer industry in Pakistan companies need little promotion to achieve its objectives. FFC is using different mediums to promote its product.

FFC marketing division Lahore has a sales promotion department.V  ARY-Digital Campaigns  Kharif campaign  Rabi campaign 106 . is responsible all the promotional activities. The department is using various ways to promote their products. which is working under marketing service department. These are Different Medias used at FFC for promotion  Television  Radio  CCTV  Print media  Road side  Point of purchase Electronic Media  Ptv  Ptv -world  KTN (Sindhi Language)  GEO  Indus T.

Radio  National radio channels  Add duration 10sec-60sec  All around the year CCTV  Islamabad airport  Multan airport  Faisalabad airport  Lahore railway station  Multan railway station  Hyderabad railway station  Faisalabad railway station  Daewoo coaches  Daewoo lounges Print Media  National daily’s  Regional news paper  International magazines  National magazines  Regional cultural magazines  Add size 108 pcm(standard size of add) Road side Advertisement 107 .

 Jumbo hoardings  Bill boards  Ware house boards  Dealer shops boards  Plastic whole signs Point of Purchase  Crop posters  Corporate posters  Crop booklets  Agro grams  Zari reports  Buntings 108 .

Company Analysis in Terms Of:  Vertical Analysis (Common size statements)  Horizontal Analysis (indexed analysis)  Ratio Analysis o o o o o o o Liquid ratios Financial leverage / solvency ratios Coverage ratios Activity ratios Profitability ratios Du-pont analysis Market ratios  Book values per share (with assumed changes)  Projections of income statement (with assumed changes)  Sensitivity analysis 109 .

plant & equipment FIXED ASSETS (INTANGIBLE) goodwill LONG TERM INVESTMENTS LONG TERM LOANS & ADVANCES 67328 LONG TERM DEPOSITS & PREPAYMENTS 3492 CURRENT ASSETS stores. spare & loose tools stock in trade trade debts loans & advances deposits & prepayments other receivables short term investments cash & bank balances TOTAL ASSETS 1727309 219180 1407736 86368 24633 560895 4464157 1055830 26443107 3040 1686980 681297 1876381 63982 23111 560526 2200845 1834148 27219468 63920 5831105 74233 100000 2184088 1741 83333 598297 2522000 3356904 83562 2972333 1447011 1740 41667 329910 384743 27219468 2004 2949703 160000 442455 8742749 2868403 2003 2564959 160000 8797753 4556886 26443107 2004 9180716 1778464 5866999 2003 9259008 1883079 7083151 110 .Balance Sheet Balance sheet SHARE CAPITAL & RESERVES share capital capital reserve reserve for issue of bonus shares revenue reserve NON CURRENT LIABILITIES DEFERRED TAXATION 2407000 CURRENY LIABILITIES trade & other payables interest & mark up accrued short term borrowings current portion of long term financing loan murabaha taxation proposed dividend TOTAL LIABILITIES ASSETS FIXED ASSETS (TANGIBLE) property.

59 0.05 -0.16 -96.56 -17. plant & equipment FIXED ASSETS (INTANGIBLE) goodwill LONG TERM INVESTMENTS LONG TERM LOANS & ADVANCES 5.94 0.17 2004 15.98 34.84 -42.33 LONG TERM DEPOSITS & PREPAYMENTS 14.99 6.00 0.00 -0.83 -24.05 111 .00 81.85 73.35 -100.56 CURRENY LIABILITIES trade & other payables interest & mark up accrued short term borrowings current portion of long term financing loan murabaha taxation proposed dividend TOTAL LIABILITIES ASSETS FIXED ASSETS (TANGIBLE) property.07 102.63 -37.00 -2. spare & loose tools stock in trade trade debts loans & advances deposits & prepayments other receivables short term investments cash & bank balances TOTAL ASSETS 2.Horizontal Analysis SHARE CAPITAL & LIABILITIES SHARE CAPITAL & RESERVES share capital capital reserve reserve for issue of bonus shares revenue reserve NON CURRENT LIABILITIES DEFERRED TAXATION -4.70 -11.43 -2.85 -5.87 CURRENT ASSETS stores.39 -67.06 100.85 0.64 50.

112 .85%. which is of 2. Total liabilities have increased by 14.3%. There is overall decrease in Total assets.61% which is due to increase in stockholder’s equity increased by 46. company is attracting more capital from investors in order to expand its operations.Horizontal Analysis of Balance Sheet There is a decrease in cash and bank balance during 2003-2004.

HORIZONTAL ANALYSIS LIABILITIES: 150 100 113 .

ASSETS: 120 100 80 114 .

Under common size statements all items are stated in term of percentages. Under vertical analysis of balance sheet each asset is stated as a percentage of Total assets and each liability and stockholder’s equity item is stated as a percent of Total Liabilities and Stockholder’s Equity.VERTICAL ANALYSIS : Under vertical analysis of income statement each item is stated as a percentage of net sales. as calculated in vertical analysis. 115 .

Vertical Analysis vertical analysis SHARE CAPITAL & RESERVES share capital capital reserve reserve for issue of bonus shares revenue reserve NON CURRENT LIABILITIES DEFERRED TAXATION 9.725624 22.06249 10.262582 100 9.828874 5.013206 CURRENT ASSETS stores.085555 6.280727 0.259574 0.212037 1.01612 6.323641 0.007359 34.423252 0.011168 6.71875 6.121139 16. plant & equipment FIXED ASSETS (INTANGIBLE) goodwill LONG TERM INVESTMENTS LONG TERM LOANS & ADVANCES LONG TERM DEPOSITS & PREPAYMENTS 0.23506 0.05151 0.32155 16.74128 0.605073 1.33273 0.084906 2.502977 6.84745 2003 9.738368 100 22.316088 0.587815 32.059283 8.918133 26.413485 100 2004 11.006584 0.532171 0.02237 116 .37817 8.102561 CURRENY LIABILITIES trade & other payables interest & mark up accrued short term borrowings current portrion of long term financing loan murabaha taxation proposed dividend TOTAL LIABILITIES ASSETS FIXED ASSETS (TANGIBLE) property.315141 2.265427 12.18725 0.153078 1.007579 34.893526 0.88212 3.006392 0.093155 2.91988 5.992836 100 0. spare & loose tools stock in trade trade debts loans & advances deposits & prepayments other receivables short term investments cash & bank balances TOTAL ASSETS 6.1549 0.326618 0.197696 2.306994 10.673234 33.

but some of the current & fixed assets are also increasing at the same time . but are backing up the short term investments and some of the other current assets.Vertical analysis of balance sheet Vertical analysis shows that There is an increase in the capital from year 2003 to 2004 which is 9. 117 .15. Some of the current liabilities of the company are increasing with the minor fractions but some of the current liabilities (trade payables. There is an overall decrease in the assets of the company in 2004 as compared to 2003. There is also increase in the reserves of the company due to which the worth of the company has been increased.42 to 11. But the company is using its assets productively in its operations.which means these liabilities are increasing. including fixed and current assets. murabaha. current portion of financing ) showing a little bit higher increase . this significant increase shows that people are willing to invest in the business of the company.

Income Statement PROFIT AND LOSS ACCOUNT 2004 sales cost of sales gross profit other incomes 21027030 13157653 7869377 933762 8803139 OPERATING EXPENSES distribution cost other operating expenses operating profit financial cost NET PROFIT BEFORE TAXATION provision for taxation NET PROFIT AFTER TAXATION EARNING PER SHARE basic & diluted 1766652 560494 6475993 372949 6103044 2099000 4004044 13.57441 \2003 21034629 13701319 7333310 457413 7790723 1851170 488206 5451347 520838 4930509 1786000 3144509 10.66044 118 .

310028 104.Horizontal analysis 2004 sales cost of sales gross profit other incomes -0.56565 14.33447 119 .5252 27.1398 12.33447 EARNING PER SHARE basic & diluted 27.80686 18.99515 OPERATING EXPENSES distribution cost other operating expenses operating profit financial cost NET PROFIT BEFORE TAXATION provision for taxation NET PROFIT AFTER TAXATION -4.96798 7.03613 -3.78122 17.7962 -28.3944 23.

Horizontal analysis of Income Statement: During 2003-2004 there is a significant decrease in cost of goods sold by 4%. Net profit increased by 27% which is tremendous achievement for the company. Financial charges have been decreased by 28% which is good sign for the company and it is due to increase in the equity financing. 120 .

982389 19.476098 23.174571 37.9492 121 .79842 1.91606 2.02476 9.57495 37.44077 41.665588 30.43996 8.13697 34.86303 2.03761 OPERATING EXPENSES distribution cost other operating expenses operating profit financial cost NET PROFIT BEFORE TAXATION provision for taxation NET PROFIT AFTER TAXATION EARNING PER SHARE basic & diluted 8.773665 29.86582 100 65.Vertical analysis 2004 2003 sales cost of sales gross profit other incomes 100 62.401814 2.320963 25.490761 14.42505 4.04237 8.800583 2.

at the same time increase in the other incomes and decrease in the operating & financial costs leading to a huge increase in the profits of the company. 122 .Vertical analysis of income statement: There is a very slight decrease in the sales but as compared to that decrease there is a huge decrease in the cost of goods sold. due to which increase in the gross profit.

213 CHART: 1.119 2003 1.Ratio analysis Liquid ratios: Liquid ratios: (i) Current ratio (ii) Quick ratio (iii) Cash to C.036 0.076 1. liability ratio 2004 1.957 0.2 1 123 .051 0.

this means that company can readily pay off its liabilities. 124 . but the company must maintain a specific cash position to improve its cash liquid position. and this position has improved within the years 2004 and 2003. (iii) The cash to current liabilities ratio is weak which means company’s cash is more readily utilized.INTERPRETATIONS: (i) Company has a sound current ratio in 2004 than 2003. (ii) But the quick ratio is better than the current ratio.

108 0.245 0.409 CHART: 0.167 0.45 INTERPRETATIONS: (I) In year 2004 the company’s debt has been reduced against the proportion of the equity.261 2004 2003 0.4 125 .195 0.324 0. due to payments of debts and increase in equity level the company’s position of debt to equity has a significant 0.163 0.Solvency / financial ratios Solvency / financial ratios (i) Debt equity ratio (ii) Debt to total assets ratio (iii) Total capitalization ratio (ix) Debt to fixed assets ratio 0.

(ii) There is a 6% decrease in the debt backing up the total assets. but in 2004 this situation has reduced to 26%. (ix) Fixed assets were backed by 40% debt financing in 2003. in 2004.there is a decrease of 13% in the debt equity ratios of 2004 and 2003. Sign of increasing equity.decrease in 2004 as compared to the 2003. showing trend of investment in equity. (iii) In 2003 the debt portion in the capitalization is 24% while in 2004 it is 16%. this is a significant sign that the company’s debt position is decreasing and it’s assets position is improving. there is a decrease in the debt portion of capitalization which is of 8%. Coverage ratios Coverage ratios 2004 2003 126 .

it is also due to the decrease in the cost of the good sold and other operating expenses.(i) Interest coverage ratio 10.466 Debt coverage ratio -- 17.364 3.645 INTERPRETATIONS: Although the interest expenses of the company are increasing but the interest covering capacity of the company is also increasing in 2004 as compared to the 2003. 127 .

Turnover ratios
Turnover ratios (i) Debtors turnover ratio 11.21 Debtors collection period (days) (ii) Creditors turnover ratio Creditors payment period (days) 18.51 (iii) Inventory turnover ratio 20.11 Inventory over in days (ix) Total assets turnover 0.773 (x) Investment turnover 1.131 2004 2033 14.94 24 6.23 58.54 60.03 6.08 0.795 1.196 18.15 32 19.72

70
128

INTERPRETATIONS:
(i) In 2004 there is a more rapid turnover of 14.94 against 2003 turnover which is 11.21, at the same time the debtors collection period has also decreased from 32-days to 24-days. This is healthy sign for the company point of view. (ii) The creditors turnover of the company is decreasing from 19.72 in 2003 to 6.23 in 2004, and the payment period is also increasing from 18.51 in 2003 to 58.54 in 2004. With this help the company is in a position to use its cash and different resources for other productive works. (iii) Inventory is showing a tremendous increase in the turnover from 20% to 60%, a tremendous increase of 40% from 2003 to 2004,but at the same time the company’s inventory turnover in days has decreased from 18-days to 6-days, which is a remarkable achievement for the company. (iv) Total assets are showing an increased turnover of 79% in 2004 as compared to 77% of 2003. (v) Increase in the investment in the form of equity is showing a gradual improve in its turnover from year 2003 to 2004.

129

Profitability ratios
Profitability ratios (i) Gross profit ratio (ii) Net profit ratio 0.149 (iii) Return on investment ratio 0.115 (ix) Return on equity ratio 0.223 0.151 0.272 0.374 0.190 2004 2003 0.349

0.4

0.35

130

(iii) Investments are showing a constant and gradual improve in their returns improving from 11. This is a slow increase but we know that the sales are also decreasing. 131 . there is an increase of 5%.55% to 15. this shows that the company’s other expenses are also decreasing although the financial cost is increasing. which is due to the decrease in cost of goods sold.INTERPRETATIONS: (i) Gross profit of the company is showing an increase of 3% from year 2003 to 2004.14% in 2003 to 2004 respectively. (iv) Increase in equity also showing an improving trend in their returns from 22% to 27%. (ii) The net profit is improving from 14% in year 2003 to 19% in year 2004.

2723 2003 0. net profit and equity is improving from 22% to 27% in 2003 to 2004 respectively. 0.2239 0.Du pont analysis: Du pont analysis: 2004 0.3 INTERPRETATIONS: (i) Du pont analysis shows that company’s position of sales.25 132 . total assets.

69 0.69 (Vi) Price earning ratio 8.091 8.81 2004 13.74 10.84 9.38 121.57 133 .96 0.Market ratios: Market ratios: 2003 (i) Earning per share 10.81 0.66 (ii) Dividend per share (iii) Dividend payout ratio (iV) Dividend yield ratio 0.087 (V) Intrinsic value per share 108.

41 2.1 INTERPRETATIONS: 14 134 .(Vii) Market price to book value 16 ratio 2.

(v) Intrinsic value of the shares of the company is increasing from 108 in year 2003 to 121 in year 2004. (ii) Company’s dividend is showing an increase of Rs.57 in year 2004. (iii) Dividend payout ratio of the company showing almost no change from year 2003 to 2004.3 separate from the quarterly announced dividends in the form of interim and other dividends. (vi) Price earning ratio is showing a slight decrease in the year 2004. 135 .66 in year 2003 to 13. This increase will strengthen the company’s position in the eyes of the present as well as the potential investors. (iv) Dividend yielding capacity of the company is showing an increase of 1% from year 2003 to year 2004. due to this position the shares of the company have huge market price from its face value.(i) Company’s earning per share is increasing from 10. Showing a great market appreciation of the company’s shares in 2004.

Increasing cost by 50% will lower down the net profit after tax to 4983721.BOOK VALUE PER SHARE It is suggested that the company should raise its capital through debt financing instead of equity financing because through debt financing the company’s book value of the share increases while through equity financing the book value per share decreases as u can see from the calculations given.88/ share. 136 .38 while raising capital through equity keep the earning per share to 15. Therefore company must raise its capital through debt financing. PROJECTIONS The projections of the income statement for year 2005 shows that if company raise its capital through debt financing then its earning per share increases to 16. While increase in sales and decrease in cost leads an increase in the net profit after tax.60.4 and 3051522 respectively. SENSITIVITY ANALYSIS Sensitivity analysis shows that increasing tax to 40% and 50% will lower down the earning after tax to 3661826. Decrease in the assets value at the time of liquidation leads to the liquidity value per share as 40.

24 139.52 15.59 1.1 2003 10 8.46 16.5 3.22 17.76 1.85 2002 9 7. Price earning ratio analysis: 12 10 8 6 4 2 0 price earning ratio 1999 2000 2001 2002 2003 2004 Company’s price earning ratio is showing a decreasing trend from year 1999 to 2001 and then increasing trend from year 2001 to year 2004.06 21.96 1.81 10.08 1.61 40.SIX YEARS TRENDS OF COMPANY’S MARKET year dividend payout ratio(before tax) price earning ratio market price to book value ratio dividend yield ratio market value per share 1999 8 5.27 2.46 53.2 2000 8 4.5 2004 12 10.32 16.51 73.86 95.1 2001 8.02 1. 137 .45 Dividend payout ratio (before tax) analysis: 14 12 10 8 6 4 2 0 divdend payout ratio(before tax) 1999 2000 2001 2002 2003 2004 Company’s dividend payout ratio is increasing constantly in the last five years.19 41.

but from 2001 to 2004 the market price in relation to the book price is increasing and showing a huge increase in 2004. 138 . Dividend yield ratio: 25 20 15 10 5 0 dividend yield ratio 1999 2000 2001 2002 2003 2004 The dividend yielding capacity of the company is showing a decreasing trend from 2001 to 2004.5 0 market price to book value ratio 1999 2000 2001 2002 2003 2004 Market price of the company was decreased from year 2000 to year 2001.5 1 0.Market price to book value ratio analysis: 3 2.5 2 1.

Market value per share: 160 140 120 100 80 60 40 20 0 market value per share 1999 2000 2001 2002 2003 2004 The market value of the shares of the company is showing a constant increasing trend from year 2001 to year 2004 Training Programme 139 .

IT Unit 9. Human Resources 5. Technical Services 10. Distribution 2. General Manager Marketing Distribution Department Distribution department is of the major department helping the sales force.During my internship at FFC my training programme was arranged in the following manner by visiting these departments. Administration 4. 1. Planning 11. Departments in Marketing Division Marketing Division Lahore contains the following departments. Objectives 140 . Regional Office Lahore 14. Warehousing 3. Finance 8. Industrial Relations and Welfare 6. The primary function of distribution department is to ensure effective and efficient distribution of product from plants up to the final customers. Sales Promotion 12. Sales North Zone 13. These departments are listed according to the schedule of my internship schedule at the office. Procurement 7.

 Truck generation for 1556 sales points.  Coordinate with plant management to ensure smooth operations. Ship out entire production of FFC and FFBL plants and imported fertilizer in accost effective manner(3. port authorities and suppliers.  Plan and undertake self imports/exports and ensure prompt handling . NLC.  Monitor packing availability and arrange safe storage of surplus production during lean months. Transportation Arrangements  Private trucking contractions  NLC  Pakistan railways Dispatches 2004 Fig in KT Road 1348 652 871 244 3315 Rail 111 73 85 12 282 Total 1459 725 956 256 3397 Ratio 92:08 90:1 91:09 95:05 92:08 Ex Goth Macchi Ex Mirpur Mathelo Ex Bin Qasim Ex Port Total Customer served 141 . quality packing .  Follow up of product quality complaints.4 MT approx)  Satisfying 3580 dealers . 1632 direct customers and 169 warehouses.  Maintain liaison with Pakistan railway .correct weight. timely delivery and documentation.

technical courses. right from the inception of the Company has played a vital role in steering the Company through all its phases.Dealers Direct customers Total 3580 1632 5212 Human Resource Department The FFC Management. operations and progress. another aspect which receives its due share is training. The employees are exposed to various kinds of cross training. the Company has a 142 . justice. The functions of Human Resources Department vis-a-vis personnel management and human resources development are going side by side and it is due to the progressive approach and dynamic philosophy of the management that Personnel Management remains abreast with the latest style of management ensuring high level of motivation and satisfaction of the work force under varied situations. workshops and seminars both at home and abroad. management courses. Personnel policies are kept updated and are periodically modified to respond to the latest socio-economic changes and market trends of the country. For Human Resource development. The Human Resources Department. therefore. keeping them happy. fair play and merit oriented treatment are some of the ingredients of processing cases by the Human Resources Department. acknowledging the importance of human resources has always placed personnel management at the top of its priority list. At Plant site. satisfied and motivated are the pillars of the Human Resources Department. Hiring quality manpower.

resulting in handsome remuneration packages to employees. A number of agreements have been signed with CBA orkers Union. 4. and the only centre in Asia having a true replica of the Plant for providing realistic training as far as possible. which is unique. lock out or go slow in FFC. statistics including leave records . Maintain up to date personal records. It is due to the sheer sincerity. 143 . their attendance and payroll of the staff while officers and executives get Functions Work out warehouse supervisor visor’s requirements in consultation with regional manager and arrange recruitment and transfer activities according to head office instructions.Employees' welfare has all along received due consideration by the Management. has undertaken five salary revisions for Management employees. The company.Technical Training Centre. to the employees. Interpret company policy and provision of necessary ruling where required. to remain amongst the top paying organizations of the country. since its inception. Maintaining their pay directly from head office.management employees. 3. Human resources department of the marketing division is responsible for the employees related to marketing division. welfare oriented policies and concern for every single employee that there has never been any strike. relating to management and non.

sick) are managed for all employees. Sales Accounting Specific responsibilities of General accounting  Payroll of permanent and temporary staff employees  Deduction of income tax from payroll and deposition in govt. electricity and medical bill 144 .  House/rent allowances advances  Also the House building loans Finance department The finance department working at marketing division Lahore is responsible for all the sales collections either sales are made directly through plant or through warehouses.  Maintenance of books of account including fixed assets . treasury. employees etc  Payment of telephone .  Reimbursement of regional imprested/distribution imprested.supplies . special.  Forwarding of L/C opening request to head office for import of fertilizer. Temporary / contract / daily wages according to authorization. General accounting 4.Handling cases relating to following subjects  Employment/appointment of non management employees.  Processing of export related documents. the finance department is divided into two sections.  Promotion of non management employees  Pay and allowances of non management employees. causal.  Leaves (annual. 3.  Forwarding detailed of provident fund contribution of permanent employees to head office.  Deduction of income tax from various supplies and deposit into government treasury.  Transfer claims of all employees.

 Payment in respect of bags and line for imported fertilizers Specific responsibilities of the Sales Accounting  Maintenance of dealership records  Processing and banking of sales and proceeds received from field force for the sale of fertilizer  Transfer of data to plants for shipment  Transfer of funds to head office recording of invoices for sales exwarehouses  Receiving data from plants for direct sales  Processing of bank Guarantees for secured credit sales  Monitoring of unsecured credit sales to fauji sugar mills/forms  Preparation of pricing and discount structure for various fertilizers  Receiving data from plants for warehouse shipment  Recording of stock movement reports  Overall reconciliation of stock movement with intimation of head office  Follow up receivables for sale through rail  Recording of stocks receives from FFBL for sale on their behalf  Sending the information regarding dealers balance to field force for recovery of receivables on various accounts 145 .

Annual Business plan Review and development of  Historical data  Key assumptions  Inputs from regions Review meeting  SMs/RMs/Deptt.Managers  GMM Collation and submission to Head office. review by management. approval Budgetary control  Circulations to cost controllers  Quarterly budget variance reports  Monthly revised cash flow statements  Review of import requirements of fertilizer  FFC related statements/ reports Daily / fortnightly  Remittance status  Sales status 146 . Board of directors.

Monthly  Trial balance and related schedule  Receivables report along with age analysis  Revised cash flow statements  Finance dept progress report  Capital budget utilization statues  Progress report of sales and w/h dispatches  Stock report to insurance company and banks  Bank reconciliation statements  Tax deduction at source  Dealer network status report  Quarterly  Budgeted vs actual expenses comparison  Performance review of marketing operations Yearly  Trial balance and related schedule  Proposed capital and revenue budget  Inputs for tax returns  Inputs for company’s annual reports 147 .

The department coordinate the activities of all other departments within marketing division .Planning Department The planning department is the integral part of fauji fertilizer company. Functions  Coordination and development of annual business plan  Provision of historical information to regions and senior sales managers for developing sales forecast  Finalizing sales forecast with coordination related sales force  Preparation of fertilizer data book  Monitoring international fertilizer price trend  Preparing Pakistan industry Urea market participation reports  Chairman’s report for board of directors meeting containing analysis.FFC performance  And industry situation. Senior executive planning who is responsible to SMSM .heads it.Major responsibility of the department is collection of information about competitors and analyzing their strategies. These reports are prepared on need basis  Preparation of Fertilizer Industry Report  Reviewing FFC sales performance on quarterly basis  Develop plans for training of officers  Monthly analysis of FFC ex-plant road and rail fright analysis 148 .

Mission Statement of Technical Department ‘Help the farmer optimize utilization of his resources to rejuvenate farm productivity and increase his income’ Objectives  Farmer education /training  Dissemination of latest and complete package of technology  Promotion of balanced fertilizer use  Focus on increasing farmers income  Counter fertilizer misconception  Enhancing crop yield/overall crop production  Supplement government effort for agricultural Functions  Establish proper linkage sales and technical services  Increase and faces on farm management expertise  Professional development on personnel  Collaborative research 149 . Senior technical executive who is reporting to SMSM heads the technical department.Technical Department Technical department is providing support function to sales. Company is providing technical services all over the country free of cost. The 14 technical officers are serving in 14 regions all over the country in coordination with sales officers.

Jhang. D. Soil/water samples are collected from farmers’ fields and analyzed in the laboratories. Farm Advisory Centers are located at D. Fertilizer recommendations are developed on the basis of soil analysis and recommendation reports are delivered to the growers for proper and balanced fertilizer use. Moreover.I.Farm Advisory Services Fauji Fertilizer Company Limited has been providing Agricultural Advisory Services to the farming community throughout Pakistan since 1981.G. FFC has also established a micronutrient testing laboratory at Farm Advisory Centre Jhang having Atomic Absorption Spectrophotometer and other analytical instruments. crop seminars. farm visits and group discussions. Besides these five farm advisory centers. The company is providing quality farm advisory services all over the country through its 5 Farm Advisory Centers and 14 Regional Technical Services Officers. Each centre has a team of five Agricultural Experts. field days. for increasing the agriculture production in general and the farmers’ economic returns in particular. Mirpur Khas and Kasur. Our organization in pursuit of its national commitment and moral obligation maintains regular contact with farmers and Agricultural Institutions to ensure constant and efficient transfer of latest technology. The soil/water testing and micronutrient analysis facility is offered free of cost. village meetings. All the centers are fully equipped with modern sophisticated computerized Soil & Water Testing Laboratories and high-tech extension equipment. we have 150 . Khan. Soil Testing is a valuable tool to propagate appropriate and balanced use of chemical fertilizers and to identify soil problems. farmer meetings. Khan. providing multifarious advisory services through crop demonstrations.

fruits. To improve the fertilizer use efficiency and to obtain optimum crop yields. In these documentaries all the components of crop production 151 . Following is the list of crop brochures available with us: • • • • Wheat Brochure Maize Brochure Banana Brochure Oil Seed Brochure • • • • Cotton Brochure Potato Brochure Apple Brochure Salt-affected Soils Brochure • • • Sugarcane Brochure Mango Brochure Vegetable Brochure • • • Rice Brochure Citrus Brochure Guava Brochure These brochures and Zari Report are also available in the Kashtkar Desk of our website . For a stronger direct link and timely guidance of farmers. To further strengthen our advisory services and facilitate our farmers. vegetables. a “Fertilizer Guide Book” has also been published containing comprehensive information on various fertilizers available in Pakistan. agro-grams. improved agronomic practices and articles on agricultural issues. and orchards grown in Pakistan.14 Technical Services Officers based at 14 Regional Offices of FFC spread all over the country extending these services in their respective areas. FFC has also adopted the pragmatic approach of telecasting crop documentaries on PTV before the onset of sowing season of major crops. their application methods and their economic use. vegetable. we publish a quarterly Urdu News Letter “Zari Report” containing season specific information regarding crops. we also publish crop. orchard brochures. posters and pamphlets containing latest information regarding production technologies of crops.

We encourage our farmers to get registered on our mailing list by sending a request in writing or through e-mail at the following addresses to receive copies of our published material free of cost. Dial Road. For any further information or agricultural advisory service. 2. Khanewal Road. Lahore Phones: 042 – 6365119 Farm Advisory Centre D. D. Khan Road.are covered with sufficient elaboration. 152 .5 – km. wheat. Chiniot Phone: 0471 . please visit any of our nearest Farm Advisory Centers or Regional Offices closer to you. Jhang Phone: 0961 – 741701 Near Chenab College. sugarcane and rice documentaries can be viewed in the Kashtkar Desk of our website.671118 Farm Advisory Centre Kasur Farm Advisory Centre Vehari Faqiriay Wala. 11-Shahrah-e-Aiwan-e-Tijarat. Khan Farm Advisory Centre Jhang Faqir Manzil.I. Technical Services Department (Marketing Division) Fauji Fertilizer Company Limited Lahore Trade Centre.I. Cotton. 3 – km Khudian Road.

Mirpur Khas Phone: 0233 – 860760 153 . Ali Farms. 0492-2003977 3360223 Vehari Phone: 067-3361913.Kasur Phone: 0492-671848. Hyderabad Road. Farm Advisory Centre Mirpur Khas 162-A. Gulshan-e-Hussain.

At present there are 24 courts in Pakistan. Any employee who may have a complaint about the management can go to the court so IR department representative follow the case Major Activities  Leave records of workers  Appointment records  Record of upgrading  Annual increment record  Vertical performance appraisal records  Staff no allocation  Negotiation legislatively with the union  Follow up of all types of cases of labor court 154 . The IR department not only negotiates with the labor unions but also responsible handling with the labor One of the functions of IR department at FFC to tackle with all types of court problems. There are labor courts at regional level .Industrial Relationship Department The IR department in organization is formed under the IRQ 69 [industrial relation ordination] of Punjab labor laws act and is under the approval of Management & joint Labor Department of Punjab Govt .The criterion for formation of IR department is a factory having at least 50 employees and its provisions given in the Punjab as well as GOP labor laws.IR basically deals with the Labor laws implication in an organization and has to negotiate legislatively with the CBA certified labor union at the factory .

augment and maintain the demand of FFBL and FFCL products  To enhance and sustain brand image and corporate image  Improve company visibility in the mind of consumers  To safe guard company logo  To strengthen brand loyalty Different Medias used at FFC  Television  Radio  CCTV  Print media  Road side  Point of purchase Electronic Media  Ptv  Ptv -world  KTN (Sindhi Language)  GEO 155 .Advertising and Sales Promotion The major function of the advertisement and sales promotion department is to enhance the corporate and brand image of SONA products. Objective  To create .

 Indus T.V  ARY-Digital

Campaigns
 Kharif campaign  Rabi campaign

Radio
 National radio channels  Add duration 17sec-35sec  All around the year

CCTV
 Islamabad airport  Multan airport  Faisalabad airport  Lahore railway station  Multan railway station  Hyderabad railway station  Faisalabad railway station  Daewoo coaches  Daewoo lounges

Print Media
 National daily’s  Regional news paper  International magazines 156

 National magazines  Regional cultural magazines  Add size 108 pcm(standard size of add)

Road side Advertisement
 Jumbo hoardings  Bill boards  Ware house boards  Dealer shops boards  Plastic whole signs

Point of Purchase
 Crop posters  Corporate posters  Crop booklets  Agro grams  Zari reports  Buntings  Mobiles

157

IT DEPARTMENT
Information Technology unit was properly setup in FFC Marketing division Lahore. IT unit is one of the most important departments working at marketing division Lahore. The Unit has to play a leading role in the marketing division in order to enable all the department to perform all their functions effectively and efficiently .It enables the management to make timely decisions.

OBJECTIVES OF IT UNITS
• • • • • To meet computing needs of all the departments of all the departments of the marketing divisions. To design and develop, efficient, effective and user friendly information systems To provide the maintenance services and proper updating of all these systems To properly cope with the security and ethical challenges related to information technology and information system To design proper feed back and control procedures toward achievement of its goals.

SYSTEMS DEVELOPED BY I.T UNITS
• • • • • Sales accounting system General accounting system Order processing system Regional information system Sales promotion system

158

14 regions.s. Purchases for the following offices are made by Lahore Marketing Division. Price enquiry of different items to estimate the price so that the budgeted amount may be endorsed on the PR before initiation Disposal of obsolete /surplus/scrap material Continuous updating of reliable vendors list for both plants and marketing division PROCEDURES INVOLVED IN PROCUREMENT STEPS • • • • • Raising of purchase request Approval of PR Request for quotation Bid opening Comparative statement 159 .• • • • • Distribution management system Procurement system Human resource system Medical control system Technical support system Procurement Department Procurement department at marketing is responsible for the purchases.5 FAC. Economical and timely procurement of items /spares for marketing division and plants ensuring complete backup support /after sales services.Mirpur Mathelo distribution office at FFBL port and head office requirements GOALS “To procure quality goods at the most economical and competitive rates” FUNCTIONS • • • • Quality.Finance and distribution offices at Goth Macchi .3 zonal officies.

Din Rawalpindi Sialkot Hafizabad COMPETITORS DCL Engro NFML Jaffer Brothers Ali Akbar groups PVT importers Activities Monitoring product wise /district wise achievement with respect to targets 160 . The regional manager.For three days Tuesday –Thursday the officers are on field visits and for rest 2 working days they perform their office work. The districts included in Lahore region : LAHORE Gujranwala Sheikhupura M. regional TSO and the sales officer Lahore district are working with assistance of stock members .• • • • Placement of order Delivery receipt of goods Verification of bills against orders Final payment REGIONAL OFFICE LAHORE The regional office Lahore is a front line department.B. It is actually involved with direct sales of fertilizer and interacting with dealers.

These zones are further divided into fourteen regions and further districts.Khan FFC North zone competition • • • DCL Engro Private importers Functions of North zone • • • • • • Conduction sale forecast for regions include in North zone Monitoring sales allocation as per decided ratios Monitoring daily sales Studying competitors price structure Co-coordinating regions included in North zone Managing sales force of North zone 161 . SALES NORTH ZONE Fauji Fertilizer company has divided Pakistan into three zones North.I.Monitoring current market situation with respect to fertilizer industry Monitoring competitors activities in detail Managing warehouses. The allocation of districts is different from civil districts. South and Central . There are five regions in North zone • • • • • Lahore Faisalabad Sahiwal Peshwar D. their sales and closing stocks Appointing and terminating dealers as regard to their performance. literate goal is to have a strong dealer network Checking sales performance of all the products and calculating percentage achievements with respect to that month and in comparison with cumulative previous months.

• • • • • • • Checking and inventory Coordination wit top management Ensuring availability controlling warehouses Monitoring of product Monitoring and keeping record of turnover of productivity Providing product on secure credit Preparing market participation reports Challenges  Equitable distribution in short supply situation  Cost control  Competition  Brand image Strategies  Quality operations/ethical selling  Rationalization of warehousing capacities  Judicious utilization of secured credit sales  Improvement in dealer network  Emphasis on customer service effective utilization of technical services  Human resources development Administration Department Administration department is involved with conducting the administration function of the fauji fertilizers of the marketing division 162 .

telephone. E-mail. transport. electricity. • • • Company maintained Company assisted cars/Jeep Pool transport Transport holding Holding of marketing division transport is as under Company assigned cars Company assisted cars Company maintained cars 23 91 63 Total=177 163 . and Photocopy facility. Jeeps and Poor vehicles Ensure availability of utilities like gas. For company gussets and officers Ensure the implementation of company policies and rules Provision of uniform to entitle staff (Qasids.e.Functions Provision and maintenance of transport i. reception. electricians and drivers) Ensure proper maintenance of the office premises and guesthouses Take disciplinary action under the rules where necessary Disposal of unusable assets of company Managing three major types of transport system related to marketing division. Under take protocol duties.e. Chowkidars. and ticketing etc. Cars. i.

Warehousing department is considered with processing of o Lease agreements o Watch and ward agreements o Handling agreements o Watch and ward bills • supervisors. This department works in collaboration with distribution department. 164 . The record of inventories is maintained and physical inspection of the warehouse and product are carried out to ensure safety and security. revenue budgets on yearly basis.Ware Housing The ware housing department is involved in completing the formality For hiring And dehiring of warehouses (on need basis) . planning capacity of warehouses    To conduct inspections of the warehouses on planned and surprise basis Each warehouse is inspected around 17 time a year. training of supervisors. watch and ward contractors. appointment of handling contractors. Functions of warehousing department  Coordinating of warehouse department with regions regarding warehouse selection. capital and Formulating warehouse plans. • • • Conduct the training of warehouse Preparing the operational . Preparing weekly capacity reports.

Zone wise Warehouses and capacity Zone North Central South Total Regions 5 5 4 14 Warehouses 63 53 49 165 Capacity MT 136700 119400 78400 334500 Type of Warehouses  Strategic Warehouses  Permanent warehouses  Temporary warehouses  Purely temporary warehouses 165 .

 FFC is using a single brand name SONA for its products like SONA urea.  FFC peruses an innovative education oriented advertising policy utilizing electronic/ print media and road side advertisement  FFC is only fertilizer company in the industry conducting seminars on core agricultural issues. SONA DAP helping farmers to remember the name.SWOT Analysis Strengths  FFC is the market leader in the fertilizer having 60% of the market share.  FFC has developed a well [planned network of 170 field warehouses to ensure that fertilizers is available to the farmers uninterrupted  Company has employed well-trained. Currently company is having 5 FACs all over the country.  Company being the market leader sets standards for the industry  FFC devotes considerable time and efforts to promote awareness regarding good farmers techniques and methods among growers community  The company continues to enhance the facility of providing farmers free farm advisory services through farm advisory centres. disciplined and motivated workforce to facilitate to achieve desire targets 166 . Inviting local and foreign luminaries  In 2004 FFC had record urea production of 2174000 tons from all the plants  Company is having strong dealer network all over country that helps in proper availability even in far-flung areas.

167 . which cause the lack of performance of policies. Company is fully automated having the extensive information systems for the plant site as well as the marketing division  FFC is offering best package of salaries to its employees comparable with any multinational organization  FFC is among one of the top taxpayers in country  FFC is introducing Farmer Friendly Culture  SONA being the farmers first choice  ISO certification  Countrywide location of plants  It has product range  FFC is experienced in production and marketing of product.  Sales force has to face a tough time when moved to far.  The promotion of the management employees is made after the period of three years.  The high differences between the salary packages of the executives and the employees.flung areas equally in other provinces. Weakness  Size of the company is very large which produces administrative problems.  Transfers are made after the period of three years .

 Being an agriculture country and due to increasing awareness about the balanced use of fertilizer.availability transport during peak season.  Lengthy organizational hierarchy.  The increasing governmental support for meeting the demand pf fertilizer in the country. Opportunities  Having a strong financial position company can start production of the new product line.  If FFC decides for the export of Urea it can earn much better revenues.  The insufficiency of technical sales orders.  FFC can export Urea to Afghanistan and other neighbouring countries. demand for the fertilizer will increase.  Availability of natural gas from Iran can helping setting up a new Urea plant in that vicinity and thus meeting the demand of Urea in the country at cheap rates.  Adding some new unit can enhance the production capacity of the plants.  Dumping of fertilizer by the dealers.  Non. for the most part orders are assigned from higher authorities.  FFC can participate in the acquisition of their companies being privatized by the government. The ideas from the bottom are not welcomed. 168 .  Company can start over sea investment like that one of PAKISTAN MARCO PHOSPHORSE-SA.  Company is in a position to set up a new plant in the country.

Threats  Natural gas  Farmer’s liquidity  Weather conditions  Future fertilizer demand  Availability of raw material  WTO challenges  Fertilizer supply in remote areas.  Dumping of under priced imported urea in local markets  Inconsistent governmental policies  Importing urea due to rising demand  Changing fertilizer prices  Difficult coexistence between public and private fertilizer producer/importer  Lack of education in grower community  New competitors in the industry  Long of gas supplies  No availability of railway wagons  Unbalanced use of fertilizer 169 .

04 .03 .06 .06 2.10 .10 .03 .15 . Very frequent transfers 9.10 . Dumping of the fertilizer by dealers 2.0 = Not Important 1.03 . Corporate Culture 8.10 . Goodwill in market 6. Countrywide location of plants 5. Strong Financial Position 7. Growing Sales 4. Non availability of transport during peak season 6.10 .12 .15 .04 .09 . Lengthy hierarchy TOTAL 0.30 .30 .36 .61 Internal Weaknesses 1. 16 . Highest Market share 3.04 . Low advertising campaigns 7. Strong Distribution Channel 9.05 .05 .08 .05 . Insuffiency of technical sales officers 3 The administrative problems due to large size of the company 4.05 . ISO Certification Weights . Wider Product line 10.04 .05 .09 . Centralized authority 5.0= Important 1 = Major Weakness 2 = Minor Weakness 3 = Minor Strength 4 = Major Strength External Factors Evaluation (EFE) Matrix 170 . Sales force has to face tough time in remote areas 8.03 Rating 3 4 3 4 3 3 3 4 4 3 1 2 2 1 2 1 2 2 2 Weighted Score . Larger fertilizer Producer 2.04 .05 . 15 .08 .03 .05 .06 .20 . Phenomenal increase in the prices of basic feedstock’s Internal Factor Evaluation (IFE) Matrix KEY INTERNAL FACTORS Internal Strengths 1.

0= Important 1 = Poor Response 2 = Average Response 3 = Above Average 171 . Per unit cost in increasing.05 foreign countries to improve the marketing campaign 5. entry of new and well financed organization in fertilizer sector 3.03 .04 .0 = Not Important 1.18 .32 .02 2.15 .08 the production capacity of the plants 2.10 .10 more chances of export 8.10 .02 . Increasing sales by implementing the .05 increase the production of plants 1. Natural gas prices 2.04 .05 9.15 . Advertising in international media and .74 4 = Superior Response TOTAL 0.03 improving the quality of products 10.06 magazines to increase the market share 6. Farmers liquidity 4. having strong financial position .15 External Threats 3 4 3 2 2 2 2 2 3 1 .09 .06 . Adding some new units can increase .06 . Weather conditions 10.07 company can introduce new products 3.10 .06 . WTO in 2005 (no quota Restriction) .02 Rating 4 3 2 3 3 1 3 2 3 3 Weighted Score . Availability of raw material 8.KEY EXTERNAL FACTORS External Opportunities Weights 1.05 the fertilizer demand in country 4.30 .05 .21 .12 .04 credit policy strategies 7.05 . Instable political situation in country 6. Increase in prices of raw material . reduction in profits 5. Domestic Competition. Opening new marketing office in . Strong demand of products in future .03 .03 . Increasing the customer satisfaction by .03 . WTO challenges 7.09 . Weak economic structure of Pakistan 9.20 . the increasing govt support for meeting .30 . Availability of gas from Iran can .06 .

15 3. 4= major strength Interpretations The Competitive Profile Matrix (CPM) identifies the firm’s major competitors and its particular strengths and weaknesses in relation to the sample firm’s strategic position.05 2 3 3 2 2 2 2 2 .20 .60 .10 .10 .20 .# 1 2 3 4 5 6 7 8 Critical Success Factors Customer Loyalty Market share Price Competitiveness Management Financial Position Advertising Global Expansion Product Quality Total FFC Engro NFC Weight Rating Score Weight Rating Score Weight Rating Score .50 The Rating values as follows: 1= major weakness.10 .10 .30 .10 .40 .10 .10 2. customer’s loyalty is very high.40 .20 . 172 .15 .20 .45 .20 .20 .60 .20 .20 .30 .10 .10 .10 2.15 .05 3 4 3 4 4 3 4 3 .30 .40 .20 the quality of FFC product is superior as it has a rating of 4.30 . 3= minor strength.10 .55 .30 .10 .10 .30 .75 . From the CPM provided above we see that loyalty and the global expansion are the most important critical success factors as indicated by a weight of 0.10 .40 .60 .80 .20 .40 .Competitive Profile Matrix Sr .40 . 2= minor weakness.30 .15 .05 3 3 3 4 3 4 1 2 .

50 Y-axis: (FS: ES) 2. Highest production 2. Demand Variability 4.SPACE MATRIX Rating Total Average Financial Strength (FS) 1. Control over Suppliers and Distributor 4. Political stability 3.00 +3 +3 +2 +2 +3 +2 +2 +2 -4 -3 -2 -3 -3 -1 -2 -2 -2 -7 -1.25 +10 +2.00) = -0. Technological Advancement 3. Customer Loyalty Conclusion FS Average = +2.75 + (+2. Quality products 4.75 IS Average = ES Average = +2. Competition Competitive Advantage (CA) 1. Net Income 2.25) = +0. Return on Equity Industry Strength (IS) 1.50 CA Average = -1.75 -15 -3 +9 +2. Barriers to Entry in New Markets 5.25 -3.5 Directional Vector Coordinates: x-axis: (CA: IS) -1.50 + (-3. Liquidity Position 4. Pakistan largest producer of fertilizer 2. High Inflation Rate 2.50 173 . Bigger market share Environmental Stability (ES) 1. Leverage Ratios 3. Increased Demand of products 3.

50) FS IS CA ES 175 .0.(+0. .50.

market development and product development) or integrative strategies (backward integration.0 4.61 3.74 2. forward and horizontal integration) can be most favorable.0 EFE Total Weighted Score 3. It can then be divided into 3 major regions that have different strategy implications.0 1.0 Interpretations The Internal – External matrix is based on the key dimensions of: the IFE total weighted scores on the x – axis and the EFE total weighted scores on the y – axis.0 2. 176 .0 2. In the above matrix it can be seen that both the Products in the sections relating to Grow and Build. Thus intensive strategies (market penetration.The Internal – External Factor (IEF) Matrix: IFE Total weighted Score 4.0 2.0 1.

The Grand Strategy Matrix: Rapid Market Growth II Weak Competitive Position I FFC Strong Competitive Position III IV Slow Market Growth Since FFC has rapid market growth and strong competitive position so it lies in 1st Quadrant of GS matrix . So it must follow the following strategies  Market development  Market penetration  Product development Since FFC have also excessive resources  Forward integration  Horizontal integration 177 .

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