SWOT Analysis:

SWOT is an acronym for the internal strengths and weaknesses of a company, as well as the
environmental opportunities and threats it faces. SWOT analysis is an easy technique for
managers to use to get a quick overview of a company's strategic position

Strengths:

 FFCL is the market leader in the fertilizer industry with a 48% market share.

 It sets industry standards as a market leader
 FFCL has established a planned network of 170 field camps to enable farmers to supply
fertilizer without interruption
 FFCL uses a single brand name (SONA) for products such as SONA Urea and SONA
DAP to help farmers remember the name because many people in the country are
illiterate
 FFCL spends a lot of time and effort to promote awareness of good agriculture
techniques and practice in growing communities
 Strong finical power
 FFCL has an innovative educational advertising policy using electronic media and street
advertising
 FFCL has a strong nationwide network of dealers that support availability even in remote
areas
 FFC produces the highest quality urea
 FFC has a strong dealer network and a large sales team to meet its needs
 FFC has a very stable urea market
 Strong distribution network
 FFC taking security measures that comply with international standards
 Low fixed costs (depreciable assets)
 Top player in fertilizer business with maximum production capacity

Weakness:

 The size of the company leads to administrative problems

 Sales forces faced difficult times as they relocated to remote areas in other states for even
distribution. This also contributed to the company’s high shipping costs
 Decrease in sales in competitor’s economics
 Too much centralization and bureaucratic control hinders timely decision making
 Dependence on the Government gas
 Reliance on imported raw materials, suppliers, maintenance facilities
 In the absence of long term planning, decisions are made with short term benefits in mind
 Due to its high share of total production more imported urea is allocated and sales are
slow
 Long organizational hierarchy
Opportunities:

 Rising support prices for crops such as sugar

 Increased agriculture income from recently crops. Will increase domestic fertilizer
demand in the next crop season
 With strong financial conditions, the company can start production of new product lines
 Quality should be gradually improved with market results and trends, and the impact of
word-of-mouth can be leveraged by providing more profit to traders
 You can diversify your business with related services. You can become a cost leader by
reducing unnecessary spending
 Plant expansion to meet demand more efficiently
 Great opportunity for a joint venture
 Delegation of authority allows you to make decision on the spot without delay
 Urea demand is expected to remain strong due to farmers economies and improved seed
varieties
 Potential to export fertilizer

Threats:

 The country’s shortage of natural gas may limit the company’s option in the future
 New competitors in the industry, such as the Fatima fertilizer company and many more
may reduce FFCL’s market share
 Manufacturing costs in the fertilizer industry are affected by inflationary factors
associated with rising feed and fuel gas prices
 Government imports of excess fertilizer and subsidized tariff marketing
 Contradictory Government Policy for the Fertilizer Industry
 Declining international fertilizer prices
 Poor farm economics

PEST Analysis:

PEST analysis is a frame work used to scan the external environment operated by a company.

Political:

 Too meet local demand for fertilizer at an affordable price, the government subsidizes the
production and import of fertilizer. Investor are allowed to relocate used plants and
machinery with same exemptions as new plants
 Import of fertilizer by manufacturers of phosphate and phosphorus free of custom duty
 Tax relaxation has also been offered by the Government, giving export benefit to
suppliers of capital goods for new projects involving fertilizer
  Due to political uncertainty, companies face high costs for operating their businesses,
but strikes have increased the number of closed days

Economical:

 Tax relaxation has been offered in order to attract new entrants and to reduce the
dependence on imported fertilizers by enhancing the local production capacity
 Exports of fertilizers are also banned for economic stability
 The central bank reduce interest rates from 14% in 2011 to 9% in 2013 i.e. a decline by
500 basis points in Pakistan. This is a good sign, especially for the highly leveraged
companies
 High inflation is one of Pakistan's major problems. This is one of the factors that the
economy is facing a downtrend.

Social:

 FFC has contributed to society for about 30 years. In 2012, FFC’s total donations to
charity activities reached Rs 200 millions i.e. 1.06% of the profits paid to the SONA
Welfare Society and Fauji foundation
 FFC has partnered with NORDEX to launch a community uplift and support program at
an estimated cost of US $100,000. The motivation of this program was to provide health
and educational facilities at Jhimpir and to provide clean drinking water, where shortage
are the major problems in the region
 In 2011, a donation of 204 million rupees was donated to Pakistan Red Crescent society
for flood victims.
 In 2010, company donated Rs. 255 million (up by 166%) to welfare activities to Sona
Welfare Hospital, Sona Public School, flood affecters etc
 Pakistan, a country facing severe problem of energy crisis, FFC established a power plant
aimed at providing relief from the problem of energy crisis complying with the global
vision of being environmental friendly

Technological:
 The fertilizer industry is also implementing several programs in its current factories, such
as energy savings and bottleneck elimination, to increase production capacity and reduce
energy consumption per ton of product
 To meet the expectations of domestic fertilizers requires a strong technical
foundation in specific engineering planning and development, as well as expertise in
project management and execution.
 The fertilizer industry has always suffered from problems due to gas regulations,
resulting in production loss at . With this issue in mind, FFC is considering the
construction of two coal-fired boilers scheduled to go live in 2015 and 2017.
 It has also installed its own solar radiation monitoring device in the 50MG Wind Power
Project. The function of the device is to collect the data used to evaluate the of the solar
system design.