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Running head: The analysis of fertilizer industry 1

The analysis of fertilizer industry


Zainab kashan 63075
Tariq khan 63327
Haider abbas 63325
Running head: The analysis of fertilizer industry 2

Contents
Geographical region....................................................................................................................................2
fauji fertilizer...........................................................................................................................................2
Engro fertilizer.........................................................................................................................................7
Fatima Fertilizers.....................................................................................................................................9
History of Fertilizer....................................................................................................................................12
Fertilizer in Pakistan..............................................................................................................................12
First Year After The Formation Of Industry............................................................................................14
Effect Of Nationalization........................................................................................................................15
Swot analysis of fertilizer industry.............................................................................................................19
Strengths...............................................................................................................................................19
Weakness..............................................................................................................................................20
Opportunities........................................................................................................................................20
Threats...................................................................................................................................................20
Choronology Of The Fertilizer Sector In Pakistan......................................................................................21
Opening Of Companies..............................................................................................................................24
Fauji Fertilizer........................................................................................................................................24
Fatima Fertilizer.....................................................................................................................................24
Engro Fertilizer......................................................................................................................................25
Services......................................................................................................................................................26
Fauji Fertlizers.......................................................................................................................................26
Engro Fertilizers.....................................................................................................................................28
Fatima Fertlizers....................................................................................................................................29
Seminars............................................................................................................................................30
Merger.......................................................................................................................................................32
Fatima Fertiizers:...................................................................................................................................32
Fauji Fertlizers:..................................................................................................................................34
Fatima fertilizers 2019...........................................................................................................................34
Labour Or Union:......................................................................................................................................35
Fauji fertilizers union protest:................................................................................................................35
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Engro Fertlizers Union Protest:..............................................................................................................36


Fatima Fertilizers:..................................................................................................................................38
Elections:...................................................................................................................................................39
Engro fertilizers:....................................................................................................................................39
Trade Show in fertilizers............................................................................................................................42
Ratio analysis.............................................................................................................................................43
World Trade Organization.........................................................................................................................46
WTO Regulations on fertlizers industry:................................................................................................46
Pakistan and the WTO:..........................................................................................................................48
Agreement on Agricultural Commodities:.............................................................................................51
Incentives..................................................................................................................................................52
Running head: The analysis of fertilizer industry 4

Geographical region

fauji fertilizer Geographical location of

Registered office

Sona Tower, 156 - The Mall, Rawalpindi Cantt, Punjab

Production plants

Goth Machhi Goth Machhi, Sadiqabad (District: Rahim Yar Khan)

Punjab Mirpur Mathelo Mirpur Mathelo (District: Ghotki), Sindh

Karachi office

B-35, KDA Scheme No. 1, Karachi, Sindh

Marketing division

Lahore Trade Centre, 11 Shahrah-e-Aiwan-e-Tijarat, Lahore, Punjab

Zonal marketing offices

North zone Lahore Trade Centre, 11 Sharah-e-Aiwan-e-Tijarat Lahore, Punjab Central zone Ali Maskan,

District Jail Road, Multan, Punjab

South zone B-35, KDA Scheme No. 1, Karsaz, Karachi, Sindh

Regional marketing offices

Faisalabad Region 495-C, Amin Town, Quaid-e-Azam Road, Faisalabad, Punjab

Sahiwal Region 77-B, Canal Colony, Off Farid Town Road, Sahiwal, Punjab
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Lahore Region Lahore Trade Centre, 11 Shahrah-e-Aiwan-e-Tijarat, Lahore, Punjab

Sarghodha Region House No. 1, Bilal Park, Muradabad Colony, University Road, Sargodha, Punjab

Peshawar Region 9-B, Rafiqui Lane, Peshawar Cantt, Khyber Pakhtunkhwa

Bahawalpur Region House No. 39-A, Tipu Shaheed Road, Model Town A, Bahawalpur,

D. G. Khan Region House No.3, Khyaban-e-Sarwar, Main Multan Road, Dera Ghazi Khan, Punjab

Multan Region Ali-Maskan, District Jail Road, Multan, Punjab

R.Y. Khan Region 37-A, Ali Block, Abbasia Town, Rahim Yar Khan, Punjab

Vehari Region House No. 48, Quaid e Azam Block, Ludden Road, Tariq Bin Ziyad Colony, Vehari,

Punjab

Hyderabad Region Bungalow No. 208, DHA, Phase-2, Hyderabad, Sindh

Sukkur Region House No. 64-A, Sindhi Muslim Co-operative Housing Society, Airport Road, Sukkur,

Sindh

Nawabshah Region House No. A-11, Housing Society, Near Thalassemia Hospital, Nawabshah, Sindh

Region name No. of district offices No of warehouses


Faisalabad Region 5 15
Sahiwal Region 4 11
Lahore region 6 17
Sarghoda region 5 11
Peshawar region 5 11
Bahawalpur region 4 12
D.G khan region 4 12
Multan region 4 12
R.Y .Khan region 4 9
Vehari region 4 12
Hyderabad region 6 13
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Sukkur region 7 20
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(Source: https://www.ffc.com.pk/investors-relations/annual-reports/ )

Engro fertilizer geographical location

1. Head Office 7th & 8th Floor, Harbor Front Building, Marine Drive, Block 4, Clifton, Karachi

2. Daharki, District Ghotki

3. Zarkhez Plant EZ/ 1 / P – 1 – II Eastern Zone, Port Qasim, Karachi

4. Sale zone-south 6th Floor, State Life Building, Thandi Sarak, Hyderabad

Sale zone-central 3rd Floor, Mehr Fatima Tower, Opp. Highcourt, Old Bahawalpur Road, Multan

5. Sale zone -north 19-A, 4th Floor, Ali Block, New Garden Town, Lahor

Ware house of engro fertilizers

1. Dr. Tahir Waheed

Engro Fertilizers Limited, Engro Ware House, By-Pass Road, Sharifabad, Bahawalpur.

Mobile: 0300-8686356

2. Nadeem Sajjad

AMM Gujranwala, Engro Ware House, More Eminabad, Gujranwala

Phone: 055-3262423 Mobile: 0300-8660348

3. Abid Ziauddin

Engro Warehouse, Near Chowk Chorhatta, Dera Ghazi Khan.

Phone: 064-2462917 Mobile: 0300-8375481

4. Salman Najeeb Khan

Engro Warehouse, Karmawala Town, Lahore Road, Okara.

5. Engro Warehouse, Factory Area, Sillanwalli Road, Sargodha

6. TBN Engro Fertilizers Limited, Engro Warhouse, 3 KM Swabi Road, Mardan


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Fatima Fertilizers Geographical region


 Head Office

E-110, Khayaban-e-Jinnah, Lahore-Cantt, Pakistan UAN: 111-FATIMA (111-328-462) Fax: +92 42

3662 1389

 Plant Site

Mukhtar Garh, Sadiqabad, Distt. Rahim Yar Khan, Pakistan Tel: 068 – 5951000 Fax: 068 – 5951166

Ware house of Fatima fertilizers

1. Mukhtargarh, Rahim Yar Khan, Punjab.

2.  Lahore Rd، Sheikhupura, Punjab.

3. khanewal Road, Shah Rukn E Alam Town, Multan, Punjab.

Phone: (042) 111 328 46

Total employees direct and indirect

KEY GRI 2018 2017 2016 2015 2014

PERFORMANCE

INDICATOR
Total work force LA1 900 849 849 896 856
Total rate of employee LA7 NIL NIL 5.30 7.7% 5.3%

turnover
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Lost timme injuries and LA7 NIL NIL NIL NIL NIL

illness rate
Total number of facalities LA10 108547 26.054 NIL NIL NIL
Man hours of training LA13 15% 19% 26404 11,872 31,038

per year
Female staff head office EC7 100% 100% 26,404 17% 22.5%
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Exports

The company belongs to a mixed group, which is operating fertilizer plants under the name of Pakarab

Fertilizers Limited & Fatima Fertilizers Company Limited as well as sugar & textile industries. The

directors of the company have good market reputation and sound financial worth.

The company had always fulfilled its business commitments and stressed on maintaining quality

standards that have substantially enhanced export/import business. The operations of the company are

ISO 9001:2000 certified and certified with GMP in year 2005 for export of molasses. Due to good

reputation in international market and healthy relationships with foreign investors, Reliance Commodities

Pvt. Ltd. has been one of the leading exporters of molasses from Pakistan. It mainly exports molasses to

Europe.

Reliance Commodities Pvt. Ltd has performed very well in the export business of molasses. In the recent

years its performance has been as follows:

RS 1,061.038 million in the year 2004-05

RS 1,656.281 million in the year 2008-2009

RS 348.202 million in year 2011-12

RS 1,083.217 million in year 2012-13.

The Company has its own state-of-the-art storage terminal at the Oil Installations Area in Keamari,

Karachi for molasses & warehouses for fertilizer


Running head: The analysis of fertilizer industry 12

History of Fertilizer

Fertilizer in Pakistan
The fertilizer industry is an indispensable piece of Pakistan's economy. The Pakistani fertilizer industry

delivers, imports and appropriates different kinds of composts. The National Fertilizer Corporation

(NFC), an administration partnership stayed for a large portion of Pakistan's history as the biggest

producer of composts.

After the parcel of the sub-mainland, the Food and Agricultural association (FAO) entered the scene

shaping a concurrence with the Government of Pakistan. This brought about the inception of Rapid Soil

Fertility Survey and Population of Fertilizers venture in 1958. The end from these examinations was that

the Pakistani soil is exceptionally lacking in Nitrogen substance and in this manner more accentuation

ought to be set on Urea utilization. Besides they likewise presumed that our agribusiness yield is 1/3 rd of

our potential.

Ayub Khan's green transformation underlined on the compost segment in the Public Sector. The NFC set

up Pakistan's first compost plant in 1958. The principal private area plant was set up by Exxon at Dharki

in 1965 at an expense of $43 million. This was trailed by Fauji Fertilizer in 1977 and Dawood Hercules

later on. The NFC claimed and worked six assembling units that represented the parity.

Until 1986, the manure business was exceptionally managed. The administration fixed costs and the

productivity of the makers was topped at 20% of ROE. The directed condition smothered private part

interest in the manure business, prompting an augmenting request supply hole that must be crossed over

through costly imports.


Running head: The analysis of fertilizer industry 13

Urea costs were deregulated in 1986. In any case, this didn't help the producers essentially as urea cost

increments were not enormous enough to counterbalance the misfortune acquired on selling exorbitant

imported urea at lower costs in the neighborhood advertise. By 1991, urea imports had ascended to

584,900 tons, roughly 27% of introduced limit. Imports were making harm the nearby business, but on

the other hand were influencing the nation's remote trade holds. In 1991 the administration started a

manure arrangement which conceded uncommon motivating forces for setting up new undertakings and

extensions.

Manure POLICY OF 1991

The notable highlights of that arrangement were:

 Supply of feedstock gas at costs bolted for a long time

 Ensured supply of gas for at any rate 9 months of the year.

 Obligation free imports of the plant and hardware

 Multi year expense occasion from date of beginning of business creation for new undertakings

 No business assessment or extract obligation on the clearance of manure

 Extension of existing plants to be permitted indistinguishable concessions from new plants

 No administration authorizing of private area speculation required

 Deregulation of costs all things considered

 In the event that value controls are forced by the administration, costs are to be set in such a way,

that ex-manufacturing plant costs ensure a ROE of 20%

 Obligation free import of phosphoric shake.

The Fertilizer Policy of 1991 demonstrated to be useful to the manure organizations as well as to the

compost business overall. With a significant info material being sponsored, the manure organizations

extended intensely. Engro Chemicals and FFC responded by extending their creation limits and verifying
Running head: The analysis of fertilizer industry 14

10 years understanding (finishing 2003) which assurance feedgas supply at concessional paces of Rs.

9.75/kilo cubic feet (kcf). Engro additionally profited the assessment occasion while FFC decided not to

do as such. In 1993, Engro set up another plant to twofold its ability to 600,000 tons and FFC likewise got

another plant of 635,000 tons in 1992. This expanded neighborhood creation diminished our exorbitant

imports and built up this vital industry.

First Year After The Formation Of Industry


1971 Separation of East Pakistan

STATSUS OF THE INDUSTRY IN 1971 (EAST PAKISTAN SEPARATION)

The partition of East Pakistan was a gigantic fiasco for the nation. Be that as it may, it didn't have

so much unfriendly consequences for the compost business. The explanations behind not been influenced

was: The business was not enormous at that specific time

It had all its arrangement in the West Pakistan.

In any case, whatever the issue was, it was confronting the money related crunch on the grounds that,

80% of the riches was in East Pakistan. This was one reason that this industry couldn't develop.

The other explanation was low request in light of the fact that the compost which was being utilized

basically to satisfy needs was "Natural Fertilizer."

Around then, there was three primary organizations in this industry to be specific, Dawood

Hercules (framed in 1968), national Gas and Fertilizer (1962) and Esson (current Engro,

framed in 1965). Among them, Dawood Hercules confronted a few misfortunes however in various

industry items, for example, nationalization of their Dawood Petroleum Ltd.

Effect Of Nationalization
In spite of the fact that this industry was available at the hour of nationalization, however this industry did
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not get nationalized in light of the fact that organizations around then nor were more in numbers, not

huge.

Along these lines, the nationalization procedure which began from 1972, couldn't have sway on

this specific industry

Products of fertilizers

1. Urea

2. Di-Ammonium Phosphate (DAP)

3. Calcium Ammonium Nitrate (CAN)

4. Ammonium Sulfate (AS)

5. Single Super Phosphate (SSP)

6. Nitro phosphate (NP)

7. Sulfate of Potash

8. Zinc Sulfate

Urea: More than 90% of the world's generation is bound for use as a nitrogen-discharge compost. Urea

has the most noteworthy nitrogen substance of all strong nitrogenous composts in like manner use

(46.7%)

Di-Ammonium Phosphate (DAP): It contains 46% P2O5 and 18% N. It is water solvent. It is a decent

wellspring of P manure for all harvests. Great hotspot for issue soils. In general, it suits to about 90% soil

of the nation Calcium Ammonium Nitrate (CAN):

Calcium ammonium nitrate (CAN) contain 27 % N and 20 % of ground limestone. This has a quick just

as changeless impact. The granulation of this manure guarantees a fast and accurate dosing

.Ammonium Sulfate (AS): (NH4)2SO4, is an inorganic salt. It is utilized to a great extent as a counterfeit

compost for antacid soils. It brings down the pH parity of the dirt, while contributing basic nitrogen for

plant development.
Running head: The analysis of fertilizer industry 16

Single Super Phosphate: Superphosphate is a manure delivered by the activity of focused sulfuric

corrosive on powdered phosphate shake.

Nitro phosphate (NP): It gives 22% nitrogen, and 20% phosphorus. Nitrogen is an essential supplement

that truly causes plants "to develop". Phosphorus is an essential supplement that empowers establishing,

blossoming and organic product generation in plants.

Sulfate of Potash: Potassium sulfate (K2SO4)) is a non-combustible white crystalline salt which is

dissolvable in water. This concoction is usually utilized in composts, giving both potassium and Sulfu

BRANDS

1. Engro Chemical Company Ltd

2. Fauji Fertilizer Company Ltd.

3. Dawood Hercules

4. Fatima Fertilizer Company Ltd.

Complete EMPLOYMENT

Direct business:

31,000 individuals are legitimately utilized in compost area.

4139 individuals/day

By implication work:

Agribusiness is the backbone of Pakistan's economy. It represents 24 percent of the GDP and utilizes 48.4

percent of the all out work power.

complete Exports :

In 2002/2003 Pakistan sent out around 46 Thousand Tones of UREA

MANURE BY ENGRO CHEMICAL PAKISTAN LTD.


Running head: The analysis of fertilizer industry 17

Nitrogenous Fertilizers:

 Engro UREA is a trusted, high-grade manure which is reasonable for all yields on all kinds of

soils. Engro Urea is a brilliant wellspring of Nitrogen for most by far developed soils of

Pakistan.

Phosphatic Fertilizers

 Engro DAP: contains 46% P2O5 and 18% N. It is a decent wellspring of P compost focrops. It is

a similarly decent source on issue soils. On a general premise it suits to about 90% soils of the

nation.

 Engro Zorawar: is one of the most elevated evaluation phosphatic manures. It is acidic in

response over 90% is water dissolvable. It is a valuable manure for all yields on all dirts of

Pakistan and produces incredible outcomes on antacid soils, because of its acidic

 Engro Phosphate: is darker shaded mono ammonium phosphate with 11% nitrogen and 52%

phosphorus. It is being promoted as generally less expensive exchange of DAP.

Mixed Fertilizers

 Engro Zarkhez: is homogenously granulated compost which boosts harvest yield by giving
adjusted nourishment to a wide assortment of yields through the uniform accessibility of
Nitrogen, Phosphorous and Potassium. Manures have low dampness content, high smash
quality; 2mm-4mm granule size and free streaming nature - traits which guarantee phenomenal
dealing with and application qualities.

 Engro NP: It gives 22% nitrogen, and 20% phosphorus. ECPL went in NP business in 2005 to

Primary center region for ENP promoting is South Zone (Sind).


Running head: The analysis of fertilizer industry 18

Small scale Nutrients:

 Zingro: Zinc Sulfate, a profoundly viable, fundamentally targets Zinc inadequacy in yield like

Rice, Potato, Maize, Sugar stick, Wheat, Cotton, vegetables and natural products. Zingro

FUJI FERTILIZER COMPANY LTD.

 Sone Urea: most broadly utilized compost in the nation. Manure is white in shading, free

streaming, promptly dissolvable in water and both contain 46% Nitrogen. On account of its high

solvency, it is reasonable for arrangement fetilizers.

 Sona DAP: is the most focused phosphatic compost containing 46% P2O5 and 18% Nitrogen. It

is the broadly utilized phosphatic compost on the planet just as Pakistan. The dissolvability of

DAP is over 95%. Its nitrogen to phosphoris proportion ( 1 : 2.5 ) makes it a perfect compost, to

meet the underlying prerequisite of the greater part of the crops.

 Sona SOP: This manure is a significant wellspring of Potash, which is a quality supplement for

generation of harvests particularly foods grown from the ground. Potash improves the

obstruction of the plants against nuisances

DAWOOD HERCULES CHEMICALS LIMITED.

 Bubber Sher: The Company's important movement is to deliver urea compost. The Company

showcases its urea under the brand name Bubber Sher.


Running head: The analysis of fertilizer industry 19

FATIMA FERTILIZER COMPANY LIMITED:

 Nitro Phosphate

 Nitrogen Phosphorous Potassium

 Calcium Ammonium Nitrate

 Urea

. NATIONAL FERTILIZER CORPORATION:

 Calcium Ammonium Nitrate

 Nitro Phosphate

 Single Super Phosphate

 Zinc Sulfate

Swot analysis of fertilizer industry

Strengths

1. Demand is overwhelming in light of the fact that, being a horticulture nation and because of

expanding mindfulness about the fair utilization of manure, interest for the compost will

increment.

2. Industry has well appropriation focuses.

3. Fertilizer industry scrutinizes a creative training focused promoting approach using

electronic/print media and street side commercial.

4. All organizations in the business have built up a very much arranged system field distribution

centers to guarantee that manures are accessible to the ranchers continuous.


Running head: The analysis of fertilizer industry 20

5. The players working in this part are monetarily solid and they can begin generation of new

product offering. Including some new unit can improve the generation limit of the plants.

Weakness
1. Black market and the demand is high which causes the farmers to pay more than the actual price.

2. Demand of the fertlizers are high by the plant capacity is not high .

3. Lack of resourses and technology as Pakistan is under developing country.

4. Farmers are less educated which causes problem in the use of correct ratio of fertilizer.

Opportunities
1. If the quality of the product is good customers will be more attracted towards the product hence

this is an oppurnity for the industry to grow

2. As there is no restriction by WHO so the exports would result a good impact over the country

economy

3. Government is supporting the fertilizer industry as we are an agriculture country this is our

identity

4. As demand is high as compare to supply so having more plant with more capacity will increase

its sale .

Threats
1. Prices of gas and petrol increases at a certain extent.

2. Bio fertilizer is the major threat as it is much cheaper then the fertlizers.

3. Unstable political condition .

4. Imported fertlizers with less price then local fertilizer will becme a major problem.
Running head: The analysis of fertilizer industry 21

Choronology Of The Fertilizer Sector In Pakistan


Year Detai
1952 Nitrogenous fertilizer were introduced.
1957 Single super phosphate was introduced by the LCFL.
1958 Ammonia sulphate was introduced by PAFL.
1959 Phosphate introduced in Pakistan.
1962 National gas fertilizer was introduced in Pakistan
1965 1965 Esso Pakistan Fertilizer Company Limited (EPFC) is joined and intended to deliver

urea 1968 Designed Capacity of PAFL is expanded.


1966 Potassium was introduced in Pakistan.
1973 National Fertilizer Development Corporation (NFDC) is built with the authorized share

capital of 1000m to manage the existing fertilizers factories and to establish the new one.
1976 Capacity of LCFL was increased.
1978 NGFF is renamed pak arab fertilizer after 48% stock were sold to government of abu

dubai
1980 Pakistan Saudi fertilizer was introduced.
1982 Esso Pakistan Fertilizer Company Limited (EPFC) is joined and intended to deliver urea

1968 Designed Capacity of PAFL is expanded.


1985 Hazara phosphate fertilizer was design to produce granulated sugar super phosphate

fertilizer .
1986 Government regulates the price of nitrogenous fertilizer.
1989 Fertilizer policy maker will provide increment and bonus for the fresh investment in the

sector
1990 Esso(Exxon) wants to sell 75% of its holding in EPFC. Engro Chemicals Pakistan limit is

formed
Running head: The analysis of fertilizer industry 22

1993 FFC once again came upfront and put another urea manufacturing facility at Goth

Macchhi to meet the on going growth demand. The new plant originate commercial

production
1994 FFC has been ranked 5th in KSE
1997 International finance corporation signed an agreement to provide loan to ENGRO

fertilizer Pakistan
1998 ENGRO invested large part of investment in renovation of its plants
1999 Onces again FFC came again forward and put up another urea manufacturing facility at

goth machhi to meet growing demand.


2004 Pak arab unit at a new stage of privatization.
2004 Dawood Hercules has the benefit of being the principal compost assembling organization

to acquire ISO-9001:2000 accreditation in Pakistan.


2005 DHCL has been ranked among the 25th companies in KSE
2006 Engro announced 2.6 million in fiscial year 2006
2007 Engro chemical listed 5 notale COP’s by united nations global compact sector.
2008 Industries provided 100 million subsidies to the farmers

Opening Of Companies

Fauji Fertilizer
Fauji Fertilizer Company Limited (FFCL), is a recorded organization on the stock exchenage, joined in

1978. It was a joint endeavor between Fauji Foundation Pakistan and M/S Haldor Topsoe A/S Denmark.

Fauji Foundation holds the greater part shares (44.35%) and has the board control of the organization.

At Goth Machhi, in District Rahim Yar Khan, FFC works the biggest compost creating complex in

Pakistan. Plant I, authorized in 1982, presently has an updated limit of 695,000 metric tons for every
Running head: The analysis of fertilizer industry 23

annum. Plant II, authorized in 1993, has the limit of 635,000 metric tons for every annum. They are

among the biggest single train urea plants on the planet. The securing of the Pak Saudi plant at Mirpur

Mathelo (60 km away in District Ghotki) in 2002, presently known as Plant III, added another 574,000

metric tons to the yearly limit, which was moved up to 718,000 metric tons in 2008. The consolidated

creation limit of FFCL is presently more than 2 million metric tons for every annum.

FFC, alongside Fauji Foundation, supported Fauji Jordan Fertilizer Company (FJFC) in 1993 and keeps

on being a significant investor in Fauji Fertilizer Bin Qasim Limited (FFBL), the new name of FJFC since

2003. FFBL is the sole producer of DAP and Urea (Granular) in Pakistan. FFC is playing out the joint

promoting and circulation of Urea and DAP under the 'Sona' brand name.

Fatima Fertilizer
Fatima Fertilizer Company Limited was consolidated on December 24, 2003, as a joint endeavor between

two significant business bunches in Pakistan to be specific, Fatima Group and Arif Habib Group.

The manure complex is a completely incorporated generation office, equipped for delivering two

moderate items, i.e., Ammonia and Nitric Acid and four last items which are Urea, Calcium Ammonium

Nitrate (CAN), Nitro Phosphate (NP) and Nitrogen Phosphorous Potassium (NPK) at Sadiqabad, Rahim

Yar Khan.

The Complex has a 56MW hostage power plant notwithstanding off-destinations and utilities. The

Complex has been designated 110 MMCFD of gas from the committed Mari Gas fields.

Establishment stone was laid on April 26, 2006 by the then Prime Minister of Pakistan. The development

of the Complex started in March 2007 and is housed on 950 sections of land of land. The Complex, when

finished, is intended to deliver:

 500,000 Metric Tons of Urea per Annum

 420,000 Metric Tons of Calcium Ammonium Nitrate (CAN) per Annum


Running head: The analysis of fertilizer industry 24

 360,000 Metric Tons of Nitro Phosphate (NP) per Annum

Engro Fertilizer
Our story starts with one organization's ambitious choice to endeavor ahead and contribute when another

had bowed out. In 1957, Pak Stanvac – an Esso/Mobil joint endeavor – discovered immense stores

wealthy in flammable gas in Mari while seeking after suitable oil investigation in Sind. With Pak Stanvac

concentrated only on oil investigation, the disclosure moved the impulse to Esso which chose to

contribute on the gigantic mechanical capability of Mari gas field. Esso proposed foundation of a

mammoth urea plant in Daharki, around ten miles from the Mari gas fields, which would utilize gaseous

petrol delivered as its essential crude material to turn out urea manure.

Chats with the Government of Pakistan proved to be fruitful in 1964, and an understanding was marked

permitting Esso to set up a urea plant with a yearly limit of 173,000 tons. Esso acquired cutting edge

configuration; financially attempted offices; and a profoundly recognized pool of specialized ability to

guarantee a smooth beginning up. Absolute venture made was US$ 46M – the single biggest remote

interest in Pakistan to date at that point. The plant began generation on 4 December 1968 – a couple of

months late and with under 10 % over keep running on the first spending plan.

To support deals, an undeniable showcasing association was set up which attempted agronomic projects

to teach ranchers of Pakistan. As the country's originally marked compost maker, the Company

modernized conventional cultivating practices and lift homestead yields, straightforwardly affecting the

personal satisfaction for ranchers and their families, and for the country on the loose. Rancher instruction

projects expanded utilization of manures in Pakistan, clearing path for Company's marked urea called

"Engro" – an abbreviation for "Vitality for Growth".


Running head: The analysis of fertilizer industry 25

Services

Fauji Fertlizers
Farm Advisory Services:
Fauji Fertilizer Company Limited has been giving farm cautioning organizations to the developing system
all through Pakistan since 1981, for extending the agribusiness age when in doubt and the farmers' pay
explicitly. Our relationship in mission for its national obligation and great responsibility stays in contact
with farmers and Agricultural IThe Company is giving quality property cautioning organizations
wherever all through the country through its 5 Farm Advisory Centers and Regional Agri. Organizations
Officers. Property Advisory Centers are arranged at Hassan Abdal, Sahiwal, Multan, Bahawalpur and
Sukkur.

Each center has a gathering of four Agricultural Experts, giving different admonition organizations
through yield showings, field days, farmer get-togethers, crop courses and property visits. All of the
centers are totally furnished with present day complex electronic Soil and Water Testing Laboratories and
front line expansion gear. Likewise, FFC has moreover settled a micronutrient and plant tissue assessment
lab at Farm Advisory Center, Sahiwal having Atomic Absorption Spectrophotometer and other indicative
instruments. Soil testing is a significant gadget to spread reasonable and balanced use of substance
fertilizers and to perceive soil issues. Soil/water tests are accumulated from farmers' fields and separated
in the examination offices. Fertilizer recommendations and recuperation reports are made dependent on
soil assessment and passed on to the cultivators for the reasonable use of excrement and to recoup the
earth. The soil/water testing and micronutrient assessment office is offered free of cost. Other than these
five property cautioning centers, we have Agri. Organizations Officers, spread wherever all through the
country and widening these organizations in their different locales.

To further fortify our admonition organizations and energize farmers, we similarly disseminate yield,
vegetables and regular items freebees despite agro-grams, distributions and flyers containing latest
information as for age advancements of harvests, vegetables and natural items created in Pakistan. For a
more grounded direct association and helpful course of farmers, we disseminate Newsletter – Zari Report
in Urdu on quarterly reason. This contains season express information regarding crops, natural items,
vegetables, improved agronomic practices and articles on agrarian issues.

To improve the fertilizer use viability and to secure perfect reap yields, an "Excrement Guide Book" and
"Manure Recommendation Book" has in like manner been appropriated containing total information on
various fertilizers open in Pakistan, their application systems and their money related use.

FFC has moreover gotten the sensible methodology of broadcasting crop documentaries on PTV before
the start of each planting time of critical yields. In these documentaries all of the fragments of collect age
are verified with sufficient elaboration. Cotton, wheat, sugarcane and rice documentaries can be seen on
Kashtkar Desk of our site www.ffc.com.pk
Running head: The analysis of fertilizer industry 26

We ask our farmers to get enlisted on our mailing list by sending a requesting recorded as a printed
version or through email and by visiting our Farm Advisory Centers/Regional working environments
arranged all through the country to get copies of our appropriated material free of cost. SMS on current
agribusiness issues are also sent to farmers on the mailing list.

For extra information or country cautioning organizations, farmers can call at our Toll Free FARMER
HELPLINE NUMBER 0800-00332 or visit any of our nearest Farm Advisory Center or Regional
Officenstitutions to guarantee proficient exchange of present day rural innovation in a compelling

manner.

Technical Services

Fauji Fertilizer Company Limited services are now available for the Chemical Process Industry based

upon its dedicated team of engineering specialists with rich experience. We provide services in following

areas:

Inspection & Reliability Assessment

Mechanical Maintenance (Stationary & Rotary)

Electrical Maintenance

Instrument Maintenance

Safety Management

Turnaround (Lump Sum)

Plant Consultancy

Engineering & Design Services

 Our specialists have many years of rich experience of three plant developments and two new plants,

while in-house building of different vitality proficiency at our three plants. This incorporates itemized

building from a BEDP (Basic Engineering Design Package) for Debottlenecking (DBN) of our current

plants from our procedure licensors M/s Saipem Italy for urea plant and M/s Haldor Topsoe for our

Ammonia Plant). This point by point building included total plot and funneling plans, channeling
Running head: The analysis of fertilizer industry 27

isometrics, hardware mechanical structure for RFQs and requesting, and furthermore development

supervision and usage in addition to appointing.

In addition, we offer procedure and just as task building administrations for plant improvement extends in

various regions. We have cutting edge programming/devices/codes/industry practices to embrace

designing activities for customers.

Engro Fertilizers
Innovation & Risk Taking Success requires us to continually strive to produce breakthrough ideas that

result in improved solutions and services. We encourage challenges to the status quo and seek

organizational environments in which ideas are generated, nurtured and developed. Engro appreciates

employees for well thought out risks taken in all realms of business and for the results achieved due to

them, acknowledging the fact that not all risks will result in success.

Ethics & Integrity:

Morals and Integrity We do mind how results are accomplished and will exhibit legitimate and moral

conduct in the entirety of our exercises. Picking the course of most noteworthy uprightness is our aim and

we will build up and keep up the most noteworthy expert and individual benchmarks. A well-established

notoriety for trustworthy managing is itself an inestimable resource.

Health, Safety & Environment:

We will oversee and use assets and activities so that the wellbeing and soundness of our kin, neighbors,

clients and guests is guaranteed. We accept our wellbeing, wellbeing and natural obligations stretch out

past security and improvement of our own offices.

Our People:
Running head: The analysis of fertilizer industry 28

We strongly believe in the dignity and value of people. We must consistently treat each other with

respect and strive to create an organizational environment in which individuals are fairly treated,

encouraged and empowered to contribute, grow and develop themselves and help to develop each other.

We do not tolerate any form of harassment or discrimination.

Community & Society:

We accept that a fruitful business makes a lot greater financial effect and incentive in the network, which

smaller people any charitable commitment. Subsequently, at Engro, feasible business improvement is to

be secured in duty to connect with key partners in the network and society.

Fatima Fertlizers
Technical Services Team:

We have a group of exceptionally qualified and experienced Technical Services Officers, serving the

cultivating network all through the nation. The group is outfitted with the most recent logical learning,

refreshed time to time, about harvest generation and compost the executives rehearses and adjusted

manure use to reestablish soil richness and improve homestead yields. Specialized group uses best in

class strategies and devices to instruct the cultivating network for improving their insight to improve

harvest yields, ranch salary and gainfulness. The group has a nearby contact with the Government and

private research organizations, seed and pesticide organizations for everyday reports on new items and

advances being utilized in the field.

Activities for the Services of farming Community:

Ranchers are consistently reached by the Technical field staff through different available resources. The

essential motivation behind gathering ranchers is to instruct them on harvest and compost the board to get
Running head: The analysis of fertilizer industry 29

greatest yield. This instructive program is kept running on all around arranged exercises. Ranchers are

reached through various procedures those are clarified underneath:

Seminars:

For mass correspondence of our messages, classes are sorted out in every region. Specialized

administrations staff, manures vendors and deals group is engaged with this action. Ranchers from inside

the domain are welcome to visit. Workshops are organized before the planting period of each yield.

Ranchers are evaluated on the most recent harvest the executives procedures, manure necessities and its

application techniques to get greatest advantage and yield. Normally 2-3 workshops are masterminded in

every region on each significant yield.

Farmers meetings:

Other than classes, little ranchers gatherings are additionally masterminded. This aides in giving

appropriate consideration to a gathering of ranchers, teach them and to tune in to their worries. These

gatherings are held beginning from the planting season till the consummation of compost application to

the harvests.

Farm visits / individual contacts: 

Our specialized field staff pays visits to individual homesteads. Nitty gritty discourses are made to

address different cultivating issues. Fields are visited, issues are recognized and arrangements are

proposed. Individual ranch visits furnish a chance to adequately cooperate with the individual rancher,

break down homestead issues and recommend therapeutic measures at the spot.

Product demonstrations & Field days:

Manure assumes a significant job in improving harvest yields and keeping up soil fruitfulness. It

contributes more than 50 % towards yields, gave a reasonable mix is applied at appropriate time. Manure

exhibits are spread out at ranchers' field to teach and persuade the ranchers for adjusted compost use.
Running head: The analysis of fertilizer industry 30

Field days are held at different yield development stages and at reap to demonstrate the impact of adjusted

compost use.

Research trials:

We have a close liaison and interaction with the government educational & research institutes. Research

trials on fertilizer use efficiency, application timing, methods of application and requirements of new

cultivars are planned, discussed with the scientists and laid out at the research stations. The results are

then shared with the farming community.

Team Training:

echnical trainings are arranged regularly to update the team with the latest knowledge and innovations in

agriculture. Highly qualified scientists from various educational & research institutes are invited to impart

these trainings This helps in improving technical skills of the team for effective farmers education.

Biological Control Services:

Fatima Fertilizers Ltd. has built up Fatima Biological Laboratory close to Fatima Sugar Mills at Sanawan,

Kot Addu. Creepy crawly predators (Trichogramma and Chrysoperla carneae) are mass increased in the

research center and are then provided/conveyed to the producers for discharge in the field. Trichogramma

is an egg parasitoid which devastates the eggs of sugarcane borers, maize and sorghum borers, vegetable

vermin and various moths. Chrysopa is a predator and preys on numerous creepy crawlies like sugarcane

Pyrilla, Thrips, Aphids, vermin and White Fly. It is named as Aphid Lion by the researchers. These

predators can be utilized to control creepy crawly irritations of different harvests, similar to, sugarcane,

cotton, maize, sorghum, vegetables and citrus. Again the exertion goes for the decrease in pesticide use,

control bugs naturally and limits ecological contamination. Natural vermin control is the main option of

pesticides for irritation control in harvests and plantations. This strategy for bug control is savvy, simple

to utilize and condition inviting.


Running head: The analysis of fertilizer industry 31

Merger

Fatima Fertiizers:
The Dawood Hercules Corporation is escaping the manure business, having reported that it is wanting to

sell its compost producing auxiliary – at, up 'til now, an unsure value – to equal Pakarab Fertilizers. The

unexpected declaration came by means of an announcement discharged to the Karachi Stock Exchange on

Monday.

The Dawood Hercules Corporation is a holding organization that has a few different business interests –

incorporating a 38% stake in the Engro Corporation. Dawood Hercules Fertilizers is its just completely

claimed auxiliary, however the worry has contributed less and less to the gathering's benefits each year.

Pakarab Fertilizers is a generally little compost producer situated in southern Punjab, mutually claimed by

the Arif Habib Corporation and the Fatima Group. Both the Fatima Group and the Arif Habib Corporation

have stakes in bigger compost producers, including Fatima Fertilizers. The move is probably going to

merge the Fatima Group's offer in the manure business.

Dawood Hercules Fertilizers has the ability to create around 456,000 tons of urea, about 9% of the

nation's absolute introduced urea limit. Be that as it may, the organization has just a 3% piece of the

overall industry in the general urea showcase in the nation, inferable from steady plant shutdowns.

The organization is situated in focal Punjab, near Lahore. The area has truly been deliberately invaluable,

enabling the plant speedy access to business sectors in Pakistan's rural heartland. In any case, its land area

has additionally cost the organization vigorously. As of late, as Pakistan comes up short on gas, the

organization has had the hardship of being the most remote away from Sindh – where the primary

wellsprings of gas are found.

Therefore, Dawood Hercules has endured lopsidedly. It has endured the longest blackouts of gas supply

when contrasted with some other manure producer. Sources acquainted with the issue say that the

organization's administration has everything except abandoned any expectation of being provided with
Running head: The analysis of fertilizer industry 32

gas, after Sui Northern Gas Pipelines administrators said that providing gas to Dawood Hercules viably

makes it hard to supply gas to Lahore.

It is indistinct why Pakarab Fertilizers is keen on purchasing Dawood Hercules. "Possibly they have some

undisclosed data about having the option to verify a gas supply soon," said Naveed Tehsin, an exploration

examiner at JS Global Capital, a speculation bank. JS doesn't cover either Pakarab Fertilizers or Dawood

Hercules for its customers.

Sources inside the compost part have indicated some political variables. Fatima Fertilizers has had among

minimal number of plant shutdowns among other compost makers in the nation. Numerous in the

compost part ascribe the marvel to close ties between the dominant part investors of the Fatima Group

and the Arif Habib Corporation, and senior individuals from the present organization.

Akram Durrani, official executive of Dawood Hercules Fertilizers, stays tight-lipped about the issue. He

will not remark on why the gathering had chosen to sell its manure business; nor on what the conceivable

arrangement structure might be.

That has not prevented a few examiners from wandering an informed theory. Farid Aliani of BMA

Capital figures that the arrangement is probably not going to incorporate the 102 million portions of the

Hub Power Company that the Dawood Hercules Corporation as of now carries on its compost backup's

books. The gathering's administrator Hussain Dawood has made it plentifully certain that he anticipates

holding his stake in Hub Power.

Aliani likewise takes note of that Dawood Hercules Corporation at present conveys its compost backup

on its books at Rs16 per share. It is hazy what the deal cost will be for Dawood Hercules Fertilizers,

however the market is unmistakably anticipating an addition. Offers in the Dawood Hercules Corporation

were up by a most extreme 5% in exchanging on the Karachi Stock Exchange on Monday, shutting at

Rs36.33 per share.


Running head: The analysis of fertilizer industry 33

Fauji Fertlizers:
ISLAMABAD, Jan 27: The Competition Commission of Pakistan (CCP) on Wednesday gave contingent

NOC to the offering by Fauji Fertilizer Company Limited (FFC) for proposed securing of 75 percent to

79.87 percent portions of Agritech Limited (some time ago Pak American Fertilizers Limited). The FFC

had presented its pre-merger application in August, 2010, for procurement of 75 to 79.87 percent portions

of M/s Agritech Limited.

The commission assessed the case and gave the contingent NOC for the proposed merger with the

condition that FFC expected to record its responsibility inside about a month from the date of issuance of

this choice to agree to all conditions laid in the request.

The CCP has requested of the FFC to look after "tara" and "sona" marks independently for a long time

and there will be a cost top on cost increment of "tara" item by FFC for a time of one year.

Fatima fertilizers 2019:

February 20, 2019 (MLN): Pakistan Credit Rating Agency (PACRA) has kept up element appraisals of

Fatima Fertilizers Company Limited at 'AA-' for long haul and 'A1+' for present moment, with a steady

viewpoint conjecture.

The appraisals reflect solid business profile of the organization on the back of broadened item blend.

Secure stockpile of gas from Mari field together with lower feed stock cost (under compost arrangement -

2001 up till 2021), speaks to intrinsic qualities of the organization contrasted with its friends. Generally

speaking limit usage kept on surpassing 100% (already: 90% – 98%) in view of alkali debottlenecking.

In perspective on stopping of urea endowment plot, the industry has expanded the costs of composts also.

GIDC related improvements are relied upon to take shape through the span of time, of which the effect

will be clear once appeared.

Peering toward for a productive plan of action, Fatima Fertilizer has proposed merger with its entirely

possessed auxiliary – Fatimafert alongside the securing of generation and working plants of its partner –
Running head: The analysis of fertilizer industry 34

Pakarab Fertilizer Limited including Ammonia, Urea, Nitric Acid, NP, CAN and clean advancement

instrument. Both referenced exchanges are at a development phase of being appeared.

Post-securing, Fatima Fertilizer will in general become a conspicuous provider of CAN and NP with the

general nameplate limit of 2,572,400 Metric tons/year.

Fatima Group has additionally wandered an endeavor to verify gas supply to Pakarab by laying gas

pipeline. The utilizing is relied upon to go up yet would stay lined up with the hazard profile of the

substance. Given solid incomes, money related hazard stay agreeable.

The evaluations are needy upon the organization's capacity to assimilate obligation profile of the

proposed acquisitions. Restoration of Pakarab's plants, procured by Fatima Fertilizer is in progress.

Labour Or Union:

Fauji fertilizers union protest:


SUKKUR, Dec 24 Hundreds of laborers of Fauji Fertilizer Company (FFC), Mirpur Mathelo avoided

work and organized dissent exhibit before every one of the three entryways of the organization on

Thursday, against non-dispensing of money reward.According to reports, many specialists of FFC drove

by their association office-bearers Ghulam Sarwar Abbasi, Comrade Bhooral Chijjan and others in the

wake of boycotting their work accumulated outside each of the three doors of the organization and

arranged a protest, while yelling mottos against the administration.

Association pioneers told writers that the FFC will undoubtedly pay five percent benefit as money

remunerate each year to its laborers, according to the administration choice. In any case, laborers of other

compost organizations were at that point paid the money remunerate however the administration of FFC

was hesitant to compensating its laborers, they said including that the net five percent of FFC was more

than Rs350 millions, to be circulated among 1313 specialists.


Running head: The analysis of fertilizer industry 35

Occupant Manager Saeed Ahmed had stored the sum in a private bank office and sitting tight for

December 31, the end of banks, while gaining immense premium.

They pledged to proceed with the dissent till the time the sum was not scattered among the laborers.

Engro Fertlizers Union Protest:


THE EXPRESS TRIBUNE > BUSINESStribune newsLabour issues: Engro Fertilizer provisional

laborers fight in DaharkiSHARE TWEET

Work issues: Engro Fertilizer provisional laborers fight in Daharki

By Sarfaraz MemonPublished: October 11, 2011

The fights, which are not yet a strike activity, have been sorted out by the Engro Fertilizer Contract

Workers Union.

The fights, which are not yet a strike activity, have been sorted out by the Engro Fertilizer Contract

Workers Union.

SUKKUR: Hundreds of provisional laborers of Engro Fertilizer – an entirely possessed backup of the

Engro Corporation – have been fighting outside the organization's biggest assembling unit in Daharki,

requesting brings up in pay and advantages, which they guarantee that the administration has been

denying them.

The fights, which are not yet a strike activity, have been sorted out by the Engro Fertilizer Contract

Workers Union, which cases it presented a sanction of requests to the organization's administration yet

had not yet gotten any reaction on the issue. The requests incorporated a raise in compensations, rewards

and different advantages.

"We stayed with sitting tight for the's reaction on the contract of requests for a half year. Just when the

organization sat idle, we began dissenting," Shahzado Panhyar, the general secretary of the worker's

guild, revealed to The Express Tribune.


Running head: The analysis of fertilizer industry 36

Upwards of 800 of the 930 provisional laborers fight outside the processing plant doors each morning

before getting down to business, which proposes that the fights have not disturbed the organization's

assembling limit. Engro Fertilizer as of late finished and started creation at its $1.1 billion single-train

urea plant that is the biggest of its sort on the planet.

The matter of raising pay, be that as it may, is by all accounts somewhat more entangled than may show

up from the outset, in any case. As per Amanul Haq, a representative for Engro Corporation, the

organization doesn't utilize the laborers legitimately but instead honors an agreement to another firm that

at that point enlists and gives laborers. Agreements with that work supply firm are normally for a couple

of years.

It is hazy if the organization would have the option to renegotiate its agreement with the work supply

organization, given that the latest agreement ended up viable on January 1 of this current year.

There is by all accounts some disagreement about how much the laborers at Engro's plant in Daharki are

paid. The trade guild guarantees that they get paid somewhere in the range of Rs7,500 and Rs10,000

every month, in light of their work involvement, while the organization's administration asserts that the

number is somewhere in the range of Rs9,000 and Rs15,000 every month. (Neither one of the figures

incorporates benefits.)

"There are numerous worldwide organizations working in Ghotki and Engro Fertilizer pays the most

noteworthy wages to its provisional laborers," said the organization's representative.

The key staying point between the organization's administration and the association seems, by all

accounts, to be the contractor framework. The association asserts that provisional laborers are paid far

less – and have far less advantages – than the customary representatives of the organization. They

guarantee that a portion of their individuals have been on agreement for more than 20 years without

having been regularized at this point.


Running head: The analysis of fertilizer industry 37

Panhyar said that the association's fights had drawn the consideration of the region organization. He

asserted authorities from the income and work divisions had met with the organization's administration

just as the association, however had not had the option to make an achievement.

Panhyar said his association's fights would proceed until their requests were met. Amanul Haq, the

organization representative, said that the discussions with the association were continuous and

communicated his expectation that an understanding would be come to soon.

Fatima Fertilizers:
BAHAWALPUR:

Forty workers were offered new contracts after a protest at a fertiliser factory on Tuesday.

Around 150 workers joined the protest outside Fatima Fertilizer Company (FFC) in Rahim Yar Khan

demanding new contracts to the employees, which included the president and general secretary of the

FFC All-Contract Workers Union (ACWU).

Muhammad Shoban, the FFC ACWU president, told The Express Tribune they had been trying to get a

union for contract workers registered for the past six months.

“The factory has a total workforce of 2,000m out of which only 450 are permanent. The remaining 1,550

workers are on contracts,” he said. “The union was trying to secure permanent employment for these.”

He said the contracts of 40 workers, including himself and the general secretary of the union, ran out on

Monday, after which the factory administration refused to re-new them. “Seeing this situation, we

protested on Monday and decided to take out a large protest on Tuesday. A large number of workers

joined us,” he said.

The protest on Tuesday started at 6am and continued till around noon, when the factory administration

agreed to offer new contracts to the 40 employees. The Pakistan Trade Union Defence Campaign

(PTUDC) Senior Vice Chairman Qamaruz Zaman Khan was amongst those who negotiated with the

factory administration.
Running head: The analysis of fertilizer industry 38

Addressing the protest, Zaman said no compromise was acceptable on the rights of workers. “Registering

a union is a right and the FFC is trying to stop it. The Labour Department must take notice of this,” he

said.

Production Manager Muhammad Asad and Industrial Relations Officer Abdul Majid told The Tribune

that they had accepted the demands of the workers and offered new contracts to them.

The protest was joined by Ghotki Friends Labour Federation President Comrade Bhoral, FFC Employees

Union (Bagging and Loading) CBA Chairman Nawabuddin Lashari, ACWU President Muhammad

Aslam and Fauji Fertilizer Company Employees Union (Bagging and Loading) CBA Comrade Majeed.

Elections:

Engro fertilizers:

Khawaja Iqbal Hassan graduated cum laude from the University of San Francisco with majors in Finance

and Marketing. He started his career with Citibank N.A. in 1980 where he held key positions including

Regional Business Head and Vice President in Saudi Arabia, Turkey and Pakistan. In 1994 Mr. Hassan

founded Global Securities Pakistan Limited and built it into a top tier stockbroking and investment

banking firm that concluded significant Privatisation transactions in Pakistan and became a joint venture

partner of UBS AG. He subsequently founded NIB Bank Limited in 2003 which, in partnership with

Temasek Holdings of Singapore, became a top 10 ranked commercial bank in Pakistan within a period of

4 years.

Mr. Hassan currently serves as a member of the Board of Directors of the State Bank of Pakistan and ICI

Pakistan Limited. He is also a member of the Monetary Policy Committee of Pakistan in addition to

serving as a member of the Board of Trustees of the Karachi Grammar School, the Layton Rehmatullah

Benevolent Trust and The Cardiovascular Foundation. Mr. Hassan has previously served on the Board of
Running head: The analysis of fertilizer industry 39

Directors of the Civil Aviation Authority of Pakistan (CAA), Pakistan Steel Mills, Habib Bank Limited,

National Fullerton Asset Management Company Limited, NIB Bank, the Lahore University of

Management Sciences, Global Securities Limited, Citicorp Investment Bank Pakistan, The Pakistan Fund

and the Central Depository Company of Pakistan.

Mr. Hassan was awarded the Sitara-i-Imtiaz by the Government of Pakistan for meritorious contribution

to national interests.

Rizwan Diwan

Mr. Rizwan Diwan is the Executive Director of Novatex Limited.

Novatex Limited belongs to G&T group of companies. The G&T group is a leading name in Home

Textiles, Garments, Polyester Textiles and Packaging Resin products in Pakistan. Mr. Rizwan Diwan is a

director in a number of group companies as well as a director in a Joint Venture Company, ThalNova

Power Thar (Pvt) Limited, a 330 MW mine mouth Thar coal based power plant at Tharparkar district.

Mr. Rizwan Diwan has also taught at IBA and holds a Masters Degree in Business Administration from

the Institute of Business Administration, Karachi

Muhammad Abdul Aleem

Muhammad Abdul Aleem is a Fellow Chartered Accountant (FCA) and a Fellow Cost & Management

Accountant (FCMA). He has worked for 16 years in Senior positions with Engro Corporation Ltd and

Esso Singapore. Thereafter, he has worked for another 14 years with British American Tobacco Group

UK (BAT) in Pakistan and Overseas. For over 10 years he served as CEO of BAT operations in

Cambodia, Mauritius and Indian Ocean.

Since 2004, he has served in Senior positions with large Government owned organizations in Pakistan.

His last assignment was as the Managing Director, Pakistan State Oil Company Limited. Currently, he is

the CEO/ Secretary General of Overseas Investors Chambers of Commerce & Industry.

He is also serving on the Boards of Meezan Bank Ltd. and Dawood Hercules Corporation Ltd.
Running head: The analysis of fertilizer industry 40

Abdul Samad Dawood

Abdul Samad is a graduate in Economics from University College London, UK and a Certified Director

of Corporate Governance from the Pakistan Institute of Corporate Governance. He is the CEO of Dawood

Corporation (Private) Limited and Patek (Private) Limited. He is also a Director on the Board of Dawood

Hercules Corporation Limited, The Hub Power Company Limited, Dawood Lawrencepur Limited, Engro

Foods Limited, DH Fertilizers Limited, Tenaga Generasi Limited, and Pebbles (Private) Limited. He is a

member of Young President Organization, Pakistan Chapter. He joined the Engro Board in 2009.

Shahzada Dawood

Shahzada Dawood serves as a Director on the Boards of Dawood Hercules Corporation Ltd, Engro

Corporation Ltd, DH Fertilizers Ltd, Dawood Corporation (Pvt) Ltd, Engro Foods Ltd, Engro Powergen

Ltd, Engro Powergen Qadirpur Ltd, Engro Vopak Terminal Ltd, Pebbles (Pvt) Ltd, Patek (Pvt) Ltd,

Engro Polymer & Chemicals Limited, Sirius (Pvt) Ltd and Tenaga Generasi Ltd. He also serves as a

Director of Dawood Lawrencepur Ltd and Engro Fertilizers Ltd. He is a Trustee of The Dawood

Foundation, which is one of the largest public charitable trusts in Pakistan, supporting education and

health initiatives. He serves as a Member of the Board of Governors of the National Management

Foundation, the sponsoring body of Lahore University of Management Sciences (LUMS). He is an M.Sc.

in Global Textile Marketing from Philadelphia University, USA, and an LLB from Buckingham

University, UK and a Certified Director of Corporate Governance from the Pakistan Institute of Corporate

Governance. He joined the Engro Board in 2003.

Muneer Kamal

Muneer Kamal is Chairman of National Bank of Pakistan and Chairman of Karachi Stock Exchange has

over 33 years of extensive experience in banking and financial sector. His career started with Citibank

where, between November 1979 and July 1994, he served locally and internationally on various senior
Running head: The analysis of fertilizer industry 41

positions including his term as Associate Director Singapore Training Centre. During this association, he

also attended a number of training courses I programs in Far East, Middle East and Africa.

Mr. Kamal then joined Faysal Bank Limited as President/CEO and led to spread out its operations from 3

branches to 11and also expanded the balance sheet size from Rs. 3 billion to Rs. 30 billion

Trade Show in fertilizers:

The CAC Pakistan Summit will be the best way to open up the agrochemical market in Pakistan and it

will also provide the attendees with the opportunity to gain insights into pesticides, fertilizers, seeds,

pesticide production equipment, plant protection equipment, and agrochemical application technology.

Ratio analysis
Ratio Analysis Of Fatima Fertilizer

LIQUIDITY RATIO
Running head: The analysis of fertilizer industry 42

Details % 2018 2017 2016 2015 2014


Current 1.09 1.10 1.03 0.75 0.9
ratio
Quick ratio 0.89 0.90 0.83 0.48 0.79
Account
receivable
turnover
Inventory 9.14 9.86 5.41 4.32 13.49
turnover

PROFITABILITY RATIO

Details % 2018 2017 2016 2015 2014


Asset 1.80 37.86 30.53 31.89 43.51
turnover
Gross Profit 57.61 54.07 53.27 56.30 59.33
margin
Return on
common
stockholder’
s equity
Earning per 6.32 5.04 4.66 4.41 4.41
share
Return on 12.07 10.65 8.84 9.76 11.14
assets
Payout ratio 27.69 44.68 69.77 0.00 62.38

SOLVENCY RATIO

Details % 2018 2017 2016 2015 2014


Debt to asset 20.69 26.77 28.97 30.19 38.20
ratio
Time interest 00.00 00.00 00.00 00.00 00.00
earned

Ratio Analysis Of Fauji Fertlizer.


Running head: The analysis of fertilizer industry 43

LIQUIDITY RATIO
Details % 2018 2017 2016 2015 2014
Current 0.96 0.94 0.91 0.85 0.61
ratio
Quick ratio 0.83 0.93 0.81 0.70 0.65
Account
receivable
turnover
Inventory 8.24 146.07 17.46 17.03 82.75
turnover

PROFITABILITY RATIO

Details % 2018 2017 2016 2015 2014


Asset 61.13 66.48 60.47 76.83 93.85
turnover
Gross Profit 26.64 20.41 25.22 34.97 38.29
margin

Return on
common
stockholder’s
equity
Earning per 12.92 9.04 9.44 15.27 14.28
share
Return on 9.18 8.17 9.64 17.09 20.99
assets
Payout ratio 68.49 77.47 83.65 77.64 95.57

SOLVENCY RATIO

Details % 2018 2017 2016 2015 2014

Debt to asset 10.56 19.28 24.16 26.44 8.17


ratio
Time interest 00.00 00.00 00.00 00.00 00.00
earned

Ratio Analysis Of Engro Fertilizer

LIQUIDITY RATIO
Details % 2018 2017 2016 2015 2014
Running head: The analysis of fertilizer industry 44

Current 1.07 0.97 1.13 0.92


ratio
Quick ratio 0.99 0.87 0.84 0.70 0.99
Account
receivable
turnover
Inventory 22.35 17.86 10.19 12.65 55.76
turnover

PROFITABILITY RATIO

Details % 2018 2017 2016 2015 2014


Asset 57.94 59.26 67.87 83.14 55.10
turnover
Gross Profit 42.20 32.49 24.61 36.73 36.80
margin
Return on
common
stockholder’
s equity
Earning per 12.48 7.59 6.78 11.29 6.32
share
Return on 14.60 9.53 8.81 14.26 7.36
assets
Payout ratio 88.12 111.67 103.23 53.16 47.13

SOLVENCY RATIO

Details % 2018 2017 2016 2015 2014


Debt to asset 28.97 30.48 36.22 30.28 37.17
ratio
Time interest 00.00 00.00 00.00 00.00 00.00
earned
Running head: The analysis of fertilizer industry 45

World Trade Organization


World Trade Organization stands for freer and predictable trade between

countries. It aims to abolish trade distorting practices between countries such as

quotas and subsidies in a phased manner. It does not however, aim at zero

tariffs. WTO has GATT, GATS and TRIPs as the main agreements. Agreement on

Agriculture and Agreement on Textile and Clothing come under GATT. Pakistan

has been the founding member of GATT 1948 as well as WTO. This study

attempts to analyze the impact of WTO on the Agriculture sector of Pakistan.

Pakistan being an agrarian economy is still a net importer of food items. The
Running head: The analysis of fertilizer industry 46

Agreement on Agriculture (AoA) is perhaps one of the most controversial aspects

of WTO. The issues in AoA include subsidies, domestic support and market

access. The developing countries and the developed world are at loggerheads

over agriculture. The developing countries require an AoA that is fair just to

meets both ends meet while the developing countries require that they maintain

their status quo to protect their handful of farmers through subsidies and

domestic support. As far as Pakistan is concerned, Pakistan has comparative

advantage in many primary commodities. But in order to fully utilize our

comparative advantage, we need to focus on and solve the problems in supply

side (domestic requirements). Pertaining to TRIPS, different varieties of plants

and animal species and traditional pharmaceutical and herbal knowledge need to

be registered to take full advantage of them. All valuable export brands like

Basmati rice, varieties of mangoes, oranges, etc need to be protected under

different provisions of TRIPS agreement. Furthermore we need to exploit our

comparative advantage in the production of meat, dairy products, fruits and

vegetables.

WTO Regulations on fertlizers industry:


a)Most Favoured Nation Treatment (MFN):

The most important and fundamental principle of WTO is non-discriminatory

treatment. Any advantage, favour, privilege or immunity granted by one WTO

member to another (such as lower customs duty to one) has to be granted

immediately and unconditionally to all other members. In case of goods MFN

treatment applies to customs duties, other border duties and charges, rules and

regulations relating to imports and exports, methods of levying customs duties


Running head: The analysis of fertilizer industry 47

and international transfers of payments for imports or exports. Customs unions

and free trade agreements, on the other hand, are negotiated under a special

exception to the MFN Principle (GATT Article XXIV). Such favourable treatments

need not be extended to all other WTO members.

b)National Treatment:

The principle of national treatment implies that imported goods will be given

treatment that is no less favourable than that given to domestic goods. This

principle of giving same treatment to others as to one’s own national is

unqualified in case of goods.

c) Stability and predictability through binding:

The stability and predictability of trading conditions is another basic principle of

the WTO. Stable and predictable conditions of access to markets promote

confidence because investors and traders can plan their investments secure in

the knowledge that market access conditions will not change for the worse. This

is achieved through the bindings of tariff. Tariffs on different products that are

reduced or agreed to in trade negotiations are bound, that is, a country agrees

that it will not levy tariffs at rates higher than those agreed to. As regards

industrial products developed countries have bound tariffs on practically all

products, while developing countries have bound them for more than 70 percent

of their products. Each country in its schedule of tariff concessions and

commitments records bound rates of tariffs for different products.


Running head: The analysis of fertilizer industry 48

d) Transparency:

WTO rules oblige member countries to ensure transparency in their foreign trade

regimes by requiring them to publish all laws, regulations, measures and

administrative decisions affecting trade. The publication of laws has to be done in

a manner that allows importers, exporters, consumers and investors to be aware

of them. Transparency is also ensured by requiring member countries to submit

periodic notification to the WTO secretariat on different aspects of the trade

regime.

e) Trade liberalization:

One of the principles of the WTO is progressive liberalization of trade. This

principle is rooted in the belief that the removal or reduction of trade barriers

results in an expansion of international trade that is to the benefit of all countries.

Pakistan and the WTO:


Pakistan is one of the founder Members of the WTO since 1995, and its

predecessor organization the GATT set up in 1948. Pakistan is following an export

led growth strategy and as such market access is of vital importance for our

businesses. The increase in preferential arrangements and free trade areas

between some members is also eroding our market access. Therefore in order to

maintain current markets and gain new ones for our exportable goods and

services we are dependent on the WTO to get tariff and non tariff barriers
Running head: The analysis of fertilizer industry 49

lowered on an MFN (Most Favored Nation) basis. Such MFN liberalization

effectively levels the playing field for competitive suppliers. Pakistan has been

actively engaged in the Doha round of trade talks that were held in November

2001. "Doha Development Agenda" (DDA) has been focusing on removing

distortions in the world agriculture markets and attaining enhanced market

access for both products and service providers from Pakistan. Since 2001, there

have two more ministerial conferences in Cancun in 2003 and Hong Kong in 2005

respectively. There was a breakdown of talks in the summer of 2006 which led

many observers to be skeptical of the entire process. However, sustained efforts

by the membership led to a partial resumption of the talks in November 2006 and

full resumption since January 2007 after the annual meeting of the World

Economic Forum at Davos.

WTO Specific Laws:

Arguments for Protection (Tariffs and Quotas):

In order to justify tariffs and quotas countries present different arguments which

are discussed below: Some countries use high tariffs and quotas to give its own

industries in a new sector to

• develop without the threat of foreign competition. This is known as infant

industry argument. Diversification of Industry argument says that a country

should not depend on the production of

• few goods, rather it should diversify its production base and hence protection is

required to enable diversification into those areas where that country does not

have comparative advantage. Employment argument states that industrial

development through protection increases


Running head: The analysis of fertilizer industry 50

• employment in the country. The defence argument says that a country must

encourage those industries which are necessary

• for the defence of the country. To maintain a trade surplus, it is imperative

that exports are more than imports.

• Protectionism is a way to rectify problems in balance of payments, whereby

imports are restricted through high tariffs. Protection also becomes important

against unfair competition, resulting from dumping

,• subsidies and depreciated exchange rates.

Rationale for Free Trade:

The principle of “comparative advantage” says that countries prosper first by

taking advantage of their assets (human, industrial & agricultural) in order to

concentrate on what they can produce best, and then by trading these products

for products that other countries produce best.

Success in trade is not static. The ability to compete well in particular products

can shift from company to company when the market changes or new

technologies make cheaper and better products possible. Producers are

encouraged to adapt gradually and in a relatively painless way. They can focus

on new products, find a new “niche” in their current area or expand into new

areas.

History shows that competitiveness can also shift between whole countries. A

country that may have enjoyed an advantage because of lower labour costs or
Running head: The analysis of fertilizer industry 51

because it had good supplies of some natural resources, could also become

uncompetitive in some goods or services as its economy develops. However, with

the stimulus of an open economy, the country can move on to become

competitive in some other goods or services. This is normally a gradual process.

the temptation to ward off the challenge of competitive imports is always

present. And richer governments are more likely to yield to the siren call of

protectionism, for short term political gain through subsidies, complicated red

tapism and hiding behind legitimate policy objectives such as environmental

preservation or consumer protection as an excuse to protect producers.

Protection ultimately leads to bloated, inefficient producers supplying consumers

with outdated, unattractive products. In the end, factories close and jobs are lost

despite the protection and subsidies. If other governments around the world

pursue the same policies, markets contract and world economic activity is

reduced. One of the objectives that governments bring to WTO negotiations is to

prevent such a self-defeating and destructive drift into protectionism.

Agreement on Agricultural Commodities:

This agreement has undoubtedly created conditions that will restrain further

growth in agricultural protectionism. Consequently, it is expected that Pakistan’s

agricultural commodities would become competitive in international markets,

provided prevailing domestic policies which discriminate against the agriculture

sector are modified according to the requirements of the agreement. As a result

of the implementation of the agreement Ingco and Winters (1995) predict that for
Running head: The analysis of fertilizer industry 52

Pakistan’s major agricultural imports’ real prices (relative to prices of

manufacturing exports from OECD) are expected to rise by 3.8 percent in wheat,

2.3 percent in coarse grains and 1.8 percent in sugar, while it is expected that

price of rice will decline by 0.9 percent and cotton by 1.2 percent in 2002. There

will be welfare losses for Pakistan due to agricultural trade liberalisation.

However, these losses will be offset by potential efficiency gains from improved

resource allocation due to removal of policy distortions. These losses will be

further reduced provided Pakistan diversify its agricultural exports by exporting

spices, vegetables, fruits, flowers, and plants, where the DCs have agreed to

drastically reduce tariffs. However, a fuller exploitation of Pakistan’s export

potential for these commodities would require considerable improvement in the

areas of storage, transportation, and especially packaging which must conform to

international standards [See Azhar (1995)] .In net terms, the implementation of

reforms in agriculture sector is predicted to result in net gain for Pakistan of

about US$ 27.2 million (in 1992 prices). The estimated gains increase to US$ 43

million if potential induced investment and increasing returns in the sector are

also taken into account.


Running head: The analysis of fertilizer industry 53

Incentives
Pretty much every administration has reported motivators and money related

bundles for the farming division in an offer to guarantee nourishment security

and prevail upon voters. Following in the strides of past governments

organization had reported motivating forces for the agribusiness part

PML-N

•It multiplied agribusiness credits to over Rs1 trillion in the previous five years at

low loan costs

•Revealed Kissan Package worth Rs341 billion

•Given sponsorships on compost and different contributions just as tractor buy

•Gave less expensive power

•Allowed import of hardware and apparatus at lower obligations and offered

protection inclusion for different yields and domesticated animals.

Budget 2017-18

•The government enhanced the agriculture credit target to Rs1,001 billion from

previous year’s target of Rs700 billion.

•Mark-up on loan disbursement was slashed to 9.9% from 14-15% for small

farmers with landholding up to 12.5 acres. Zarai Taraqiati Bank Limited, National

Bank of Pakistan and other banks offered the cheap loans

•Other schemes included small loans of up to Rs50,000 per farmer with

disbursement target of 2 million loans for the year.

•The government announced a subsidy of Rs13.8 billion on di-ammonium

phosphate (DAP) sales with reduction in general sales tax to Rs100 per bag from

Rs400 last year.


Running head: The analysis of fertilizer industry 54

•Urea price was maintained at Rs1,400 per bag through the grant of subsidy in

terms of reduced sales tax. Total subsidy was estimated at Rs11.6 billion.

•Customs duty and sales tax was reduced to zero for five years on the import of

new and up to five-year-old combined harvesters.

Budget 2016-17

•Farmers would continue to take benefit of the prime minister’s Rs341-billion

Kissan Package during the year.

•Total agriculture credit limit was increased to Rs700 billion from Rs600 billion

with reduced mark-up.

•DAP price was slashed to Rs2,500 per bag from Rs2,800 whereas urea price was

reduced to Rs1,400 per bag from Rs1,850 in the previous year.

•Federal and provincial governments would equally share the cost of subsidy on

urea and DAP amounting to Rs36 billion and Rs10 billion respectively.

•Off-peak tariff for agriculture tube wells came down to Rs5.35 per unit from

Rs8.85 per unit, which was estimated to put a burden of Rs27 billion on the

national exchequer.

Budget 2015-16

•Total agriculture credit limit was raised to Rs600 billion from Rs500 billion. The

government initiated the Credit Guarantee Scheme for the sector.

•Schemes for crop loan insurance and livestock insurance launched.

•Then prime minister Nawaz Sharif announced the Kissan Package worth Rs341

billion in September 2015.


Running head: The analysis of fertilizer industry 55

•The scheme brought immediate cash grants for rice and cotton growers,

subsidies on agriculture input worth Rs140 billion including reduction in fertiliser

prices, loan advances valuing at Rs185 billion, insurance premium to be borne by

the government and other small grants.

•Grants were targeted primarily at small farmers that had landholdings of up to

12.5 acres.

•It also included collateral guarantees for loans and tax breaks for dairy, poultry

and fish farming sectors.

•The Kissan Package brought down all taxes on the import of modern agriculture

machinery to 9% from 43%. Sales tax was reduced to 7% from 17%, while

turnover tax on rice was withdrawn.

Budget 2014-15

•Total agriculture credit limit was increased to Rs500 billion.

•A credit guarantee scheme for small and marginalised farmers was introduced

to encourage banks to provide financing to those who previously did not get

access to banking facilities.

•Under the programme, the government provided guarantees for up to 50% of

loans offered to the farmers having up to five acres of irrigated and 10 acres of

non-irrigated land.

•A crop loan insurance scheme worth Rs2.5 billion was introduced for the farmers

that covered the risks posed by natural calamities, climate change and plant

diseases.
Running head: The analysis of fertilizer industry 56

•Sales tax on tractors came down to 10% from 16%.

•An amount of Rs300 million was allocated for the Livestock Insurance Scheme

for small livestock and dairy farmers having up to 10 cattle.

•Livestock insurance in the case of calamity and disease was launched which was

estimated to benefit 100,000 farmers.

Budget 2013-14

•The government set aside Rs240.4 billion in subsidy for energy companies and

essential commodities like wheat, sugar, rice and other agriculture produce.

•A subsidy of Rs870 million was announced for agriculture tube wells.

•The government increased allocation for the Pakistan Agriculture Storage and

Services Corporation (Passco) to Rs6 billion for keeping wheat reserves and

prices stable in the market.

•An amount of Rs6 billion was set aside for the Utility Stores Corporation

(source : https://tribune.com.pk/story/1693973/2-agriculture-sector-continues-

get-incentives/)

Press Release

Ratings of Fatima Fertilizer Company Limited

Karachi, August 26, 2019: VIS Credit Rating Company Limited (VIS) has

reaffirmed the entity ratings of Fatima Fertilizer Company Limited (FATIMA) at

‘AA-/A-1’ (Double A Minus /A-One). The medium to long-term rating of ‘AA-’

denotes high credit quality coupled with strong protection factors. Moreover, risk

factors may vary slightly with possible changes in the economy. The short-term
Running head: The analysis of fertilizer industry 57

rating of ‘A-1’ denotes high certainty of timely payment, liquidity factors are

excellent and supported by good fundamental protection factors. Outlook on the

assigned rating is stable. The previous rating action was announced on December

22, 2017.

The assigned ratings take into account strong sponsorship profile as majority of

the shareholding of the company is held by Fatima Group (FG) and Arif Habib

Group (AHG) through their group companies and individual representatives. The

business risk profile of FATIMA is also underpinned by well-diversified product

portfolio. The company is involved in manufacturing and supply of Urea, Nitrogen

Phosphate (NP), and Calcium Ammonium Nitrate (CAN) fertilizers through a

dealer network of 4,863 retailers in 61 districts of Pakistan. The ratings also

factor in positive earnings trajectory, improving cash flows generation, and

decline in lever

age indicators on a timeline basis. The ratings draw comfort from access to

concessionary gas, which provides a cushion against the increasing gas prices.

FATIMA registered notable growth in net sales as the impact of a slight decline in

fertilizer off-take was offset by higher selling prices. NP remained the leading

revenue contributor, followed by Urea, and CAN. In addition, the improvement in

gross profits was also led by strengthening of margins on the back of higher

fertilizer prices and continued availability of concessionary gas. Liquidity position

of the company is underpinned by healthy cash flow generation. Hence, financial

metrics including cash flows in relation to total debt have largely remained within

benchmark limits for the assigned ratings.


Running head: The analysis of fertilizer industry 58

The ratings factor in proposed amalgamation of Fatimafert into FATIMA and

acquisition of major fertilizer plants of Pakarab, which may take some time to

complete. Fatimafert and Pakarab currently have negative gross margins, which

may put a drag on profitability in initial years; the management however expects

the deal to add value to the company from the benefits of synergies, cost

efficiencies and better use of brands. The post-deal impact on financial profile of

FATIMA with respect to coverages will continue to be tracked by VIS. Going

forward, the development on Midwest Fertilizer Company would be a key rating

driver, timeline for which is not confirm at this point in time.

Source : http://jcrvis.com.pk/prFile.aspx?mRatingId=35859

Press Release

VIS Credit Rating Company Assigns Initial Ratings to Fauji Fertilizer Bin Qasim

Limited

Karachi, August 27, 2019: VIS Credit Rating Company Limited (VIS) has assigned

initial long term entity rating of ‘A+’ (Single A) and short term rating of ‘A-1’ (A-

One) to Fauji Fertilizer Bin Qasim Limited (FFBL). Long term rating of ‘A+’

denotes good credit quality and adequate protection factors; risk factors may
Running head: The analysis of fertilizer industry 59

vary with possible changes in the economy. The short term rating of ‘A-1’

signifies high certainty of timely payment; liquidity factors are excellent and

supported by good fundamental protection factors. Risk factors are minor.

Outlook on the assigned ratings is ‘Stable’.

Headquartered in Islamabad, Pakistan, FFBL is the sole domestic producer of Di-

Ammonium Phosphate (DAP) fertilizer. It is also the only producer and marketer

of granular form UREA (in contrast to widely marketed ‘prilled’ variant). FFBL

enjoys leadership in DAP fertilizers with market share of 30.7% and is Pakistan’s

4th largest producer of UREA. Fauji Foundation (FF) and its subsidiary Fauji

Fertilizer Company Limited (FFC) hold majority shareholding in FFBL. Both FFC

and FFBL market their products under one umbrella brand ‘Sona’, which has wide

recognition among the farmers’ community. DAP segment represents around

three-fourth of the Company’s overall revenues. Seasonality in DAP sales is more

pronounced than UREA sales resulting in a seasonal liquidity cycle for the

Company.

The assigned ratings incorporate strong financial profile and business acumen of

FFBL’s major sponsors -FFC and FF. Rating also reflect FFBL’s leading market

position in DAP business, diversified business risk profile and strong corporate

governance infrastructure. Ratings also take into account existing financial profile

where elevated leverage indicators (to fund long-term investments on balance

sheet) and modest coverages are a rating constraint. Gradual improvement in

DAP business dynamics, Gas Infrastructure Development Cess (GIDC) settlement

and improvement in financial performance of subsidiaries is expected to improve


Running head: The analysis of fertilizer industry 60

financial profile over the rating horizon. Ratings remain dependent on timely

GIDC settlement and materialization of projected dividend income from

investments while reprofiling of long-term debt in line with projected cash flows

would be an important rating consideration.

As part of company’s strategic vision to offer sustainable returns to shareholders,

FFBL carries a sizeable book of diversified investments. Investment portfolio

(including TDRs) represented 38.6% of total asset base at end-1Q19. The

portfolio features a mix of investment in defensive and growth industries.

Dividends from power sector investments are expected to constitute the bulk of

the dividend income over the rating horizon.

Source : http://jcrvis.com.pk/prFile.aspx?mRatingId=35863
Running head: The analysis of fertilizer industry 61

900000
800000 Chart Title
700000
600000
500000 diammonium
400000 phosphate production?
300000
Year Value % Change
200000
2017 808,808 2.22%
100000
2016 791,256 3.03%
2015 0 1 2 3 768,004
4 5 9.51%
2014 701,297 -5.65%
2013 743,293 15.27%
2012 644,844 -1.92%
2011 657,438 -0.30%
2010 659,430
tones year value20.90%
2009 540,096 14.67%
2008 470,999 32.04%
2007 356,706 -20.82%

year value
2017 808,808
2016 791,256
2015 768,004
2014 701,297
2013 743,293
2012 644,844
2011 657,438
2010 659,430
2009 540,096 https://knoema.com/atlas/Pakistan/topics/Agriculture/Fertilizers-
2008 470,999 Production-Quantity-in-Nutrients/Diammonium-phosphate-production
2007 356,706
Year Value Change %

2017 5,652,392 urea


2016 6,001,191
2015 5,301,793
2014 4,898,634
2013 4,827,796
2012 4,155,271
2011 4,901,148
2010 5,155,528
2009 5,046,724
2008 4,978,333
2007 4,754,654
Running head: The analysis of fertilizer industry 62

7000000

6000000

5000000

4000000
Value
3000000 Year

2000000

1000000

0
1 2 3 4 5 6 7 8 9 10 11

Year Value
2017 5,652,392
2016 6,001,191
2015 5,301,793
2014 4,898,634
2013 4,827,796
2012 4,155,271 https://knoema.com/atlas/Pakistan/topics/Agriculture/Fertilizers-
2011 4,901,148 Production-Quantity-in-Nutrients/Diammonium-phosphate-production
2010 5,155,528
2009 5,046,724
2008 4,978,333
2007 4,754,654
Running head: The analysis of fertilizer industry 63

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