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  • Weakness of Fauji Fertilizer

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    Asma Ali
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    The sales force of Fauji Fertilizer faced difficulties operating in distant areas, leading to high transportation costs. Several key metrics declined compared to the previous year, including gross margin profit decreasing 6%, market share and sales volume dropping for their two main products, and net profit falling 32%. Administrative costs and total interest expenses on liabilities increased substantially as well, while capital reserves remained constant, indicating weaknesses across Fauji Fertilizer's operations and financial performance.

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    The sales force of Fauji Fertilizer faced difficulties operating in distant areas, leading to high transportation costs. Several key metrics declined compared to the previous year, including gross margin profit decreasing 6%, market share and sales volume dropping for their two main products, and net profit falling 32%. Administrative costs and total interest expenses on liabilities increased substantially as well, while capital reserves remained constant, indicating weaknesses across Fauji Fertilizer's operations and financial performance.

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    61 views1 page

    Weakness of Fauji Fertilizer

    Uploaded by

    Asma Ali
    The sales force of Fauji Fertilizer faced difficulties operating in distant areas, leading to high transportation costs. Several key metrics declined compared to the previous year, including gross margin profit decreasing 6%, market share and sales volume dropping for their two main products, and net profit falling 32%. Administrative costs and total interest expenses on liabilities increased substantially as well, while capital reserves remained constant, indicating weaknesses across Fauji Fertilizer's operations and financial performance.

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    WEAKNESS OF FAUJI FERTILIZER

    1. Sales force faced a tough time when being moved to distant areas in other provinces to
    ensure they were spread equally. This also contributed to high transportation costs for the
    company.
    2. Gross margin profit is decreasing. It decreased by 6 percent as compared to previous
    year.
    3. Decrease in market share (especially of urea). There is decrease in sale of urea by 7
    percent.
    4. Sale of DAP decreased by 36 percent.
    5. Increase in administrative cost by Rs. 8.4 billion.
    6. Brand loyalty is decreasing. Sales revenue is decreased by 3 percent.
    7. Increase number of competitors. Especially the two well-known competitors are Fatima
    Fertilizer and Engro Fertilizers.
    8. Capital reserve for future is remaining constant at Rs.16 billion in 2019.
    9. The total mark up to be paid on liabilities is increased by 3.7 billion.
    10. Net profit is decreased by 32 percent which account for Rs.3.56 billion of profit.

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