DATA:

I. TOTAL ASSET AND TOTAL SALES

# Name of Total Assets (Thousand Rupees) Total Sales (Thousand Rupees)

Firm
2014 2015 2016 2017 2014 2015 2016 2017
1 Engro 111,726,183 106,085,726 102,803,512 111,816,249 61,424,934 85,420,742 69,537,253 77,129,343
Fertilizers
Ltd
2 Fatima 83,120,963 115,010,199 134,455,072 117,660,541 36,169,191 32,318,145 42,395,739 45,371,156
Fertilizers
Ltd
3 Fauji 47,478,13 59,407,356 63,794,501 65,651,800 49,445,256 52,182,072 45,011,359 52,732,954
Fertilizers
Bin
Qasim
Ltd

4 Fauji 115,453,341 113,680,293 124,713,493 140,770,260 84,013,999 87,340,258 75,377,857 93,583,447

Fertilizers
Co. Ltd
Total 231053380 257261217 232322208 268816900

II. MARKET PER SHARE RATIO:

# Name of Firm Market Per Share Ratio
2014 2015 2016 2017
1 Engro Fertilizer Ltd 30.93% 30.37% 27.52% 28.54%
2 Fatima Fertilizer Co. 3.26% 3.55% 3.67% 3.97%
Ltd
3 Fauji Fertilizer Bin 7.78% 7.82% 7.83% 7.80%
Qasim Ltd
4 Fauji Fertilizer Co. Ltd 10.57% 10.43% 10.71% 10.60%

III. EXPENSES:

Name of Firm Selling & Distribution Expense (Thousand Rupees)

2014 2015 2106 2107
Engro Fertilizer Ltd 4,638,361 4,653,188 3,898,109 4,138,496
 Fatima Fertilizers 57,545 37,735 71,522 101,031
Ltd
Fauji Fertilizers Bin 17,408 20,633 20,703 27,530
Qasim Ltd
Fauji Fertilizers Co. 17,408 20,633 20,703 27,530
Ltd

IV. HHI & Concentration Ratio:

# Name of Firm Market Per Share Ratio
2014 2015 2016 2017
1 Engro Fertilizer Ltd 30.93% 30.37% 27.52% 28.54%
2 Fatima Fertilizer Co. Ltd 3.26% 3.55% 3.67% 3.97%
3 Fauji Fertilizer Bin Qasim 7.78% 7.82% 7.83% 7.80%
Ltd
4 Fauji Fertilizer Co. Ltd 10.57% 10.43% 10.71% 10.60%
HHI(%) 1139.54 1104.87 946.83 1003.49

HHI = Sum of square of firm market shares of each year

 HHI of 2014 shows that market is competitive as it lies between 1 – 1500.
 HHI of 2015 shows that market is competitive as it lies between 1 – 1500.
 HHI of 2016 & 2107 shows that market is competitive as it lies between 1 – 1500.

# Concentration Ratio Market Per Share

2014 2015 2016 2017
1 Engro Fertilizer Ltd 30.93% 30.37% 27.52% 28.54%
2 Fauji Fertilizer Co. Ltd 10.57% 10.43% 10.71% 10.60%
3 Fauji Fertilizers Bin Qasim 7.78% 7.82% 7.83% 7.80%
Ltd
4 Fatima Fertilizers Co. Ltd 3.26% 3.55% 3.67% 3.97%
3rd Largest Firm ratio 49.28% 48.62% 46.06% 46.94%
4th Largest Firm ratio 52.54% 52.17% 49.73% 50.91%

Oligopoly: If lies between 40%-70%

Monopoly: If lies above 70%

Relevant Market of Fertilizers in Pakistan:

Pakistan is an agro-based country and there are well renowned manufacturers and suppliers of
fertilizers in Pakistan. Pakistan is one of the ten major producers of wheat in the world with an
average 24 million tons output per season. Major Fertilizers industries of Pakistan produced
different kind of fertilizers with ranking of Engro Pakistan 33% Urea Production share Fauji

1
Fertilizers (Goth Machi) 38%Fauji Fertilizers (Bin Qasim) 7%,Engro Fatima 6%, Pak Arab
(Multan) 8%,Agri Tech (Mianwali) 7%, Dawood Hercules (Skp) 6%. Urea and Phosphate
Market Share by Firm 44%, 9% ,27% ,6% ,9%, 5%. Urea Market share Fauji Fertilizers National
Fertilizer Marketing Ltd. Engro Fertilizers Dawood Hercules Reliance Group.
Conclusion:
The fertilizer industry in Pakistan is of an oligopolistic nature, with the four major players
namely Engro, FFC, FFBL and Dawood Hercules, who form 90% of the total urea production in
Pakistan. FFC has the highest share of urea production (45%), Engro (20%), FFBL (13%) and
Dawood Hercules (11%).
Fauji Fertilizer Company remains the market leader in Fertilizer Industry and still remains strong
in domestic market. About 44% shares in FFC are owned by Fauji Foundation group. Fauji
Fertilizer Company has its monopoly in the province of Punjab, the hub of agricultural activities.
FFC also holds 51% stake in Fauji Fertilizer Bin Qasim and 12.5% in Pak Maroc Phosphore.
FFC has also filed a pre-merger application for 7579 per cent shares of Agritech Limited. FFC
has also diversified its operation by taking up wind projects in Thatta/Sindh. FFC is one of the
most stable companies with strong cash flows, stable earnings, consistent dividend payouts and
low leverage. FFC is likely to remain stable benefitting from government subsidies, strong urea
growth, domestic market advantage and high prices gap between domestic and international
markets. The recent gas curtailment will also benefit FFC since it gets gas from Mari Gas
network while other major fertilizer companies are based on the SNGPL network which is
increased span of gas curtailment. FFC is likely to continue its steady growth along the lines of
agriculture growth trends. Its likely acquisition of Agritech and expansion in wind energy might
create synergy benefits as well. The acquisition of Agritech will require debt raising along with
cuts in dividend payouts, however strong domestic demand for urea along with current low
capex business can reap higher dividends in subsequent years.