REP

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OR

PR
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T

ENGR
FERTI
LIZER 202

O ING
S

SPR
1

S.NO. NAMES STUDENT

IDs. STRATEGIC
1. Yousuf Mughal. 64283 MANAGEMENT
2. Rimsha. 63082
3. Rabia Rasheed. 63119

CLASS.ID: 106457.
FACULTY: SIR. Naeem Bhojani.
 ACKNOWLEDGEMENT

First of all, we would like to express our gratitude to Almighty Allah to enabling us to
complete this report. “Gratitude is the hardest of emotion to express and often does not find
adequate ways to convey the entire one feels.” This study was a team project offered to us in
course STRATEGIC MANAGEMENT which helped us to learn a lot of by way of
implementing theory on practical grounds.

We are especially thankful to our Project Supervisor Sir. NAEEM BHOJANI, whose
valuable guidance, suggestions, support, outstanding mentorship and experience helped us in
the successful completion of this project. We would like to thank our family and friends who
lent us their support and goodwill which help to keep up our motivation despite the time
constraints and work load.

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 Contents
INTRODUCTION.....................................................................................................................................4
BACKGROUND.......................................................................................................................................5
VISION...................................................................................................................................................7
CORE VALUES........................................................................................................................................7
 Health, Safety and Environment................................................................................................7
 Ethics and Integrity....................................................................................................................7
 Our People.................................................................................................................................8
 Innovation and Risk-taking........................................................................................................9
 Community and Society.............................................................................................................9
BRANDS.................................................................................................................................................9

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INTRODUCTION

Engro Fertilizers Limited is a subsidiary of Engro Corporation and a renowned name in

Pakistan’s fertilizer industry. It is traded on the stock market under the symbol ‘EFERT.
Engro holds a vast, nationwide production and marketing infrastructure and produces leading
fertilizer brands optimized for local cultivation needs and demand. Engro is also a leading
importer and seller of Phosphate products, which are marketed extensively across Pakistan as
phospatic fertilizers.

Its extensive market development activities have ensured a sustained pull for our primary and
secondary fertilizer products and sellout productions since launch. Engro Fertilizers Limited
enjoys loyal customer base across Pakistan owing to its trusted fertilizer brands and continual
farmer assistance in training and education.

Engro Fertilizers Limited was incorporated in June 2009, following a decision to demerge
fertilizer concern from its parent company Engro Chemical Pakistan Limited. The continual
expansions and diversifications in its enterprises necessitated a broad restructuring in Engro
Chemical operations and management. To facilitate better oversight, Engro Chemical
Pakistan was converted into a holding company named Engro Corporation, and its fertilizer
business was subsequently demerged to a newly formed Engro subsidiary –Engro Fertilizers
Limited.

Engro’s fertilizer manufacturing facility at Daharki has been experiencing ongoing

expansion. This, coupled with distinct dynamics of highly nuanced fertilizer industry
warranted an independent and dedicated business entity and approach. The demerger of
fertilizer concern was approved by High Court of Sind on December 9 th, 2009, making it
effective as of January 1st 2010.

Engro Fertilizers is poised to become the leading urea manufacturer in the country following
major upgrading of its manufacturing capabilities. ENVEN 1.3–a tremendous expansion in
Engro’s urea manufacturing facility went into production in November 2010 and looks set to
end Pakistan’s near-term urea imports, leading to benefits of an expanded local urea base and
savings in national exchequer.

Engro is a dynamic company driven by a vision to improve productivity and lifestyle for
thousands of farmers across Pakistan. Engro Fertilizers Limited has earned itself a

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distinguished name by continually striving to uphold its tradition and trust of its loyal
consumer base.

BACKGROUND

Begins with one company’s enterprising decision to strive ahead and invest when another had
bowed out. In 1957, Pak Stanvac –an Esso/Mobil joint venture –stumbled upon vast deposits
rich in natural gas in Mari while pursuing viable oil exploration in Sind. With Pak Stanvac
focused exclusively on oil exploration, the discovery shifted the impetus to Esso which
decided to invest on the massive industrial potential of Mari gas field. Esso proposed
establishment of a giant urea plant in Daharki, about ten miles from the Mari gas fields,
which would use natural gas produced as its primary raw material to turn out urea fertilizer.

Talks with the Government of Pakistan bore fruit in 1964, and an agreement was signed
allowing Esso to set up a urea plant with an annual capacity of 173,000 tons. Esso brought in
state-of-the-art design; commercially tried facilities; and a highly distinguished pool of
technical expertise to ensure a smooth start up. Total investment made was US$ 46M –the
single largest foreign investment in Pakistan to date then. The plant started production on 4
December 1968 –a few months late and with less than 10 % over run on the original budget.

To boost sales, a full-fledged marketing organization was established which undertook

agronomic programs to educate farmers of Pakistan. As the nation’s first branded fertilizer
manufacturer, the Company helped modernize traditional farming practices and boost farm
yields, directly impacting the quality of life for farmers and their families, and for the nation
at large. Farmer education programs increased consumption of fertilizers in Pakistan; paving
way for Company’s branded urea called “Engro” –an acronym for “Energy for Growth”.

In 1978, Esso became Exxon as part of an international name change. The Company was,
therefore, renamed Exxon Chemical Pakistan Limited.

In 1991, Exxon decided to divest its fertilizer business on a global basis. The employees of
Exxon Chemical Pakistan Limited –in partnership with leading international and local
financial institutions –bought out Exxon’s 75% equity. This was, and perhaps still is, the
most successful employee buy-out in Pakistan’s corporate history.

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Renamed Engro Chemical Pakistan Limited, the Company went from strength to strength
with its consistent financial performance; growth of its core fertilizer business; and
diversification into other enterprises. A major plant capacity upgrade at Daharki coincided
with the employee led buy-out in 1991. Engro also relocated fertilizer manufacturing plants
from the UK and US to its Daharki plant site–an international first. As years followed, Engro
Chemical Pakistan Limited started venturing into other sectors namely: foods, energy,
chemical storage and handling, trading, industrial automation and petrochemicals.

By 2009, Engro was fast growing and had already diversified its business portfolio in as
many as seven different industries. The continual expansions and diversifications in
Company’s enterprises necessitated a broad restructuring in Engro Chemical Pakistan Ltd.
which subsequently demerged to form a new Engro subsidiary –Engro Fertilizers Limited.

After the necessary legal procedures and approvals, the Sindh High Court sanctioned the
demerger on December 9, 2009. The demerger became effective from January 1, 2010.
Subsequently, all fertilizer business assets and liabilities have been transferred to Engro
Fertilizers Limited against the issue of shares to the parent company Engro Corp.

The Company undertook its largest urea expansion project in 2007.The state of the art plant
enVen 3.0, stands tall at 125 meters –dubbed the tallest structure in Pakistan. The total cost of
this expansion is approximately US$ 1.1 Billion, with the expanded facility making Engro
one of the largest urea manufacturers in Pakistan, besides substantially cutting the cost of
urea imports to national exchequer.

In 2013, the Company forayed into the

capital markets and tapped the financial
markets to raise the necessary capital
required to fund development capex on
securing additional gas supplies along
with restructuring of the balance sheet to
optimize the capital structure of the
company. The IPO was a roaring success
being oversubscribed four times in the book building process whilst being oversubscribed for
three times at the time of public issue.

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VISION

We Are Passionate About Transforming The Agricultural Landscape, Bringing Change And
Helping The Farmer Grow.

CORE VALUES

At Engro, thee support their leadership culture through unique

systems and policies which ensure open communication,
foster an environment of employee and partner privacy, and
guarantee the well-being and safety of their employees. Their
core values form the basis of everything we do at Engro; from
formal decision making to how they conduct their business to
spot awards and recognition. At Engro they never forget what they stand for. Following are
their core values.

 Health, Safety and Environment

They will manage and utilize resources and operations in such a way that the safety and
health of their people, neighbors, customers, and visitors is ensured. They believe their
safety, health and environmental responsibilities extend beyond protection and
enhancement of our own facilities

 Ethics and Integrity

They do care how results are achieved and will demonstrate honest and ethical behavior
in all their activities. Choosing the course of highest integrity is their intent and they will
establish and maintain the highest professional and personal standards. A well-founded
reputation for scrupulous dealing is itself a priceless asset.

 Our People

They strongly believe in the dignity and value of their people. They 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

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themselves and help to develop each other. They do not tolerate any form of harassment
or discrimination.

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  Innovation and Risk-taking

Success requires us to continually strive to produce breakthrough ideas that result in

improved solutions and services. They 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.

 Community and Society

They believe that a successful business creates much bigger economic impact and value in
the community, which dwarfs any philanthropic contribution. Hence, sustainable business
development is to be anchored in commitment to engage with key stakeholders in the
community and society.

BRANDS

At Engro Fertilizers, when we talk about our undying commitment to deliver the highest
standards of quality, our focus goes well beyond how our brands will fare amongst our target
audience to how they will impact customer lives by enriching their soils and crops to
maximize yield, and this is precisely why we strive to combine innovation & quality with
customer needs and expectations.

 Librel Zinc
 Azidox
 Sulphur
 Truce Xtra
 Engro Urea
 Engro DAP
 Engro NP
 Zingro
 Engro Zarkhez
 Engro MOP
 Engro SOP

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  Engro SSP + Zinc
 Engro Ammonium Sulphate
 Zabardast Urea
 Zoron
 Power Potash

MARKETING OBJECTIVE:

FERTILIZER POLICY, ISSUES & SECTOR PERFORMANCE:

Fertilizer policy was announced taking effect from 1st July 2001. The policy was initially operational
for ten years and aimed for an estimated investment of USD 1.2bn in the sector meanwhile.
However, it has completed its tenor and a new policy is awaited. The basic objective of this policy
was to attract investment in the sector, support farmers through provision of fertilizer products at an
affordable price and to ensure best optimal price and supply of gas to keep the plants’ utilization at
max. The policy has brought fruitful results in the form of USD 2.0bn investment through green field
projects and BMR activities but the rationalization of gas subsidy as envisioned in the Policy has not
yet been materialized.

INVESTMENTS THROUGH FERTILIZER POLICY:

EFERT expansion took place with the addition of 1.3mn tons of urea plant coupled with the 0.5mn
tons of new plant set up by Fatima Fertilizer Company (FATIMA). In line with the fertilizer policy the
GoP approved subsidized feed stock for both of the companies at USD 0.7/mmbtu for the tenure of
10 years. Conversely, the gov’t failed to honor its sovereign guarantee resulting substantial gas
curtailment for EFERT and its new plant only received gas for 45 days in CY12. However, to this date
the problem has been cater as the Economic Coordination Committee (ECC) of the Cabinet has
decided to revert the 60mn cubic feet per day (mmcfd) previously diverted gas back from Guddu
Power Plant to Engro Fertilizer after which the plant will be able to operate on 80-85% of its installed
capacity.

GOV’T SUPPORT TO FARMERS:

Traditionally, support prices for commodities have played a vital role to boosting up the fertilizer
offtake. As an agrarian country, the gov’t always tends to support farmers through every possible
mode including higher support prices. Wheat support prices are directly proportional to the fertilizer
offtake. We have witnessed an upward trend in wheat support price since FY11. At present, wheat
support price stands at PKR 1200/maund, which is expected to revise upward in the current month.

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MARKETING STRATEGIES:

• The Company continues to explore opportunities both within the country and abroad to
expand its business within the Agri Input space

• On the domestic front Engro Fertilizers is developing other Agri‐inputs in order to provide a
one stop solution to farmers. This includes:

• Connecting with farmers at the grass root level to improve farm productivity of small to
medium growers through

capacity building and introduction of innovative techniques for input/output resource

efficiency

• Increasing farmer knowledge to improve yield through balanced use of fertilizer

• Testing the Pakistani market for other agricultural inputs such as seeds, pesticides and other
fertilizers.

KEY INVESTMENT HIGHLIGHTS:

 Well Established Player in the Fertilizer Market.

 Robust Operating and Financial Performance.
 Lowest Cost Producer in Pakistan – Uneven Plant.
 Sustainable Dividend Payout.
 Supported By a Strong Local Shareholder.
 Led By a Highly Experienced Management and Board.

PURSUING OFFSHORE OPPORTUNITIES:

 Many countries are opening up and offering gas at competitive rates; EFERT is
poised to take advantage of these strategic developments.

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  taking place around the world.
 The company has identified various business development opportunities for
sustainable growth. Discussion with various potential project.
 owners/sponsors has been initiated in Africa & USA:
 Greenfield Project with O&M.
 Relocation Project.
 Participation as Equity Investor.gf

COMPETETORS:

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SWOT ANALYSIS

STRENGTH WEAKNESSES

 Strong brand recognition  Mature industry with declining /

 Lean organizational structure, stagnant market growth
creating more customer value via  Reliance on depleting natural
efficient operations resources
 Wide product and services  Phosphate and Potash based price
portfolio, offering farmers elastic products in the portfolio
complete range of seed to harvest
solutions
 Financial sustainability and strong
balance sheet position
 Quality and efficiency of Human
Resource

 Renowned engineering excellence

S Analysis
W
W
O TT
OPPORTUNITIES


O
Alignment of gas pricing to fertilizer
TT THREATS

 Inconsistent gas supply and

policy
elevating costs of production
 Improved production through
utilization of idle capacity
 Devaluation resulting in

 Capacity to build horizontal and increased cost of doing business

vertical integrations, improving on  Challenging farm economics

the Company’s supply chain  Excess supply of Urea through
 Invest in energy efficient
non-indigenous gas source
technological advancements
 Inconsistent government
 Identify alternate sources of raw
policies and pressures on
materials
fertilizer pricing
 Identify and address issues of low
farmer yields via positive
interventions

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REFERENCE:

https://arifhabibltd.com/downloads/company/EngroFertilizerLimited.pdf

https://www.engrofertilizers.com/wp-content/uploads/2014/05/160504_EFERT_Company-

https://acasestudy.com/engro-foods-strategic-management/

https://www.engrofertilizers.com/downloads/

https://engrocorp.s3.amazonaws.com/engrofertilizers.com/Engro-Annual-Report-2019-final-
year.pdf

https://www.engrofertilizers.com/wp-content/uploads/2019/03/Annual-Report-2018.pdf

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