History:

Search for oil by Pak Stanvac, an Esso/Mobil joint venture in 1957, led to the discovery of Mari
gas field situated near Daharki, a small town in upper Sindh province. Esso was the first to study
this development in detail and propose the establishment of a urea plant in that area.

The proposal was approved by the government in 1964, which led to a fertilizer plant
agreement signed in December that year. Subsequently in 1965, the Esso Pakistan Fertilizer
Company Limited was incorporated, with 75% of the shares owned by Esso and 25% by the
general public. The construction of a urea plant commenced at Daharki the following year with
the annual capacity of 173,000 tons and production commenced in 1968. At US $ 43 million, it
was the single largest foreign investment by an MNC in the country.

A full-fledged marketing organization was established which undertook agronomic programs to

educate the farmers of Pakistan. As the nation’s first fertilizer brand, Engro (then Esso) helped
modernize traditional farming practices to boost farm yields, directly impacting the quality of
life not only for farmers and their families, but for the community at large. As a result of these
efforts, consumption of fertilizers increased in Pakistan, paving the way for the Company’s
branded urea called "Engro", an acronym for "Energy for Growth".

As part of an international name change program, Esso became Exxon in 1978 and the company
was renamed Exxon Chemical Pakistan Limited. The company continued to prosper as it
relentlessly pursued productivity gains and strived to attain professional excellence.

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 percent equity. This was at the time and perhaps still is the
most successful employee buy-out in the corporate history of Pakistan. Renamed as Engro
Chemical Pakistan Limited, the Company has gone from strength to strength, reflected in its
consistent financial performance, growth of the core fertilizer business and diversification into
other fields.

Investment in people, process solutions and resource conservation initiatives have reduced
energy use per ton of urea by a third, whilst increasing urea production nearly six-fold since
1968. Not only does this save money, it stretches non-renewable energy sources and mitigates
the impact of waste. Along the way, a major milestone in plant capacity upgrade coincided with
the employee led buy-out; innovatively optimizing our resources, Engro re-located fertilizer
manufacturing plants from the UK and US to its Daharki plant site – an international first. Our
pioneering spirit continues in our social investments, exemplified by the only snake-bite
treatment facility in the Ghotki region and the first telemedicine intervention in the country.
 SWOT ANALYSIS
STRENGTHS:

The company is obviously a source of pride to the nation, being one of the few truly diversified
and professional corporations (in terms of operating procedures & standards) in Pakistan.
Therefore this organization has many strong points that hold it high in the face of industry
competitors. In order to get a better understanding of its strengths, we can take a look at the
following facts;

1. Increasing EAT year after year

2. Focus on safety and internationally compatible sops
3. Strong financial backbone
4. The corp. has made robust strides in all areas of operation
5. Top annual ranking award given by ICAP (2002)
6. Leading seller of phosphates (35% market share)
7. Name in terms of brand equity
8. Experience and in-depth knowledge of the market
9. Top25 companies award winner
10. Environment excellence award

In all areas of business the company has improved performance and expanded operations such
as urea expansion, polymers, manufacturing of Pakistan’s first cryogenic ethylene storage,
expansion in foods business with addition of brands and growing distribution network. Engro
also plans to build an independent power plant capable of producing 217MW of electricity by
end of 2009.

WEAKNESSES:
OPPORTUNITIES:

1. Large and growing size of market and hence demand

2. Increasing potential to go international
3. Urea demand by local manufacturers still unmet
4. Increasing consumption of zarkhez
5. Chances to work with foreign corps. For R&D

THREATS:

A company of this scale has many threats to face that are posed by the external environment.
According to the porter model there are obvious threats such as buyer power of clients and
suppliers and the threat of new entrants as well as existing competitors and substitute
products.

In short some of the threats faced by engro are;

1. The threat of MNCs as competitors

2. Political instability
3. Global market trends
 Corporate Social Responsibility

Occupational Health:

The urea plant at Daharki operated without Lost Work Day Injuries (LWIs) to either ECPL or
contractor employees. The site has achieved 2.5 million man-hours (MMH) without LWI to
employees and 2.4 MMH without LWI to any employee of contractors.  Major recent steps
taken include; identifying and addressing unsafe situations pro-actively by utilizing safety
audits by the management team and developing site leading indicators that identify and
improve weak areas. Internal evaluation and safety results at end of year indicate that
safety awareness has improved as a result of this effort. The behavioral safety management
system is now close to the DuPont Best Practices skill level. The total recordable incident
rate was 0.42 in 2007 versus 1.31 in 2006.

Zarkhez plant at Port Qasim continued its operation without LWI and achieved 0.6 MMH
without LWI to an ECPL employee over a period of 6 years. In addition, site completed 2.45
MMH without LWI to any employee of contractors over a period of 3 years. Both behavioral
and process safety programs were launched in 2007, including commencement of
management safety audits.

Engro non-manufacturing functions achieved 6.85 MMH over a period of nearly 22 years
without LWI.

Social citizenship:

The company launched its second edition of CSR report in line with international guidelines
and was among the top most socially responsive organizations in Pakistan. Even the report
was published in recycled paper! The company’s social investments were 1% of pre-tax
profits. The company is in constant touch with the following welfare organizations

1. Sahara welfare
2. Project hope
3. Maternal & childcare center
4. Snake bite treatment facility
5. Eye care
6. Engro thallassemia center
7. Schools in katcha
Other initiatives include

1. Earthquake victims revivial program

2. Dolphin saving activities
3. Neighborhood care program in collaboration with CPLC
4.