FAUJI FERTILIZER COMPANY LIMITED: A PERFORMANCE ORIENTED COMPANY
May 08 - May 14, 2006
Fauji Fertilizer Company Limited (FFC), the largest urea manufacturer in the country, was incorporated on May 08, 1978 as a joint venture between Fauji Foundation, Pakistan and M/s Haldor Topsoe A/S of Denmark. It was established to fill the projected gap in demand and indigenous production. Company shares are held by Fauji Foundation (44%) and various investment companies, financial institutions and individuals. The Company acquired Pak Saudi Fertilizer Limited (PSFL) through the privatization process on May 31, 2002.
The Company was listed on Karachi and Lahore Stock Exchanges in 1991 and on Islamabad Stock Exchange in 1992. Company employees were also allotted shares for motivation and promoting a sense of participation. Based on related criteria of Karachi Stock Exchange, primarily quantum of dividend payout, FFC has been placed in the list of top 25 companies of Pakistan since 1994, topping the list in 1997.
FFC commenced commercial production in June 1982. It markets over 3.8 million tons of fertilizers annually comprising 3.2 million tons of urea and 0.6 million tons of locally manufactured as well as imported phosphatic/potassic fertilizers. It has exported urea to China, Iran, Philippines, India, Bangladesh, Sri Lanka, Thailand, Tanzania and Afghanistan. It holds 62% share of the urea market.
FFC has saved the country over US $ 4 billion through import substitution and contributed over Rs. 65 billion to the Government by way of taxes, levies, custom duties, excise duty/ surcharge on gas purchases besides providing employment to hundreds of individuals.
FFC together with Fauji Foundation from Pakistan and Jordan Phosphate Mines Company (JPMC) from Jordan sponsored the establishment of a urea/ DAP complex at Port Qasim, Karachi. FFC-Jordan Fertilizer Company Limited (FJFC) was incorporated in November 1993 as a public limited company. JPMC withdrew its equity in 2003 and the name was changed to Fauji Fertilizer Bin Qasim Limited (FFBL). Since the commencement of its commercial production, FFC has been marketing the entire production of FFBL under its own brand name Sona. FFC, effective June 01, 2002 also started marketing of FFC-3 (formerly PSFL) production under the name FFC urea. Large amount of capital has been invested to bring the quality of FFC urea at par with Sona urea and from March 2004, FFC-3 production is being marketed as Sona urea. Recently, FFC has also started marketing Boron to address the micro-nutrient deficiency in the soils.
FFC has made remarkable progress since its inception. Establishment of three projects in a span of less than 20 years each incurring over US$ 300 million is a performance record unparalleled in the country. The acquisition of PSFL entailing an investment of over 8 billion rupees is another landmark achieved by the Company. Building on its foundations the Company is confident to take on new challenges. FFC's vision for the 215t century is diversification and establishing projects beyond the territorial limits of the country in collaboration with world famous international industrial holdings.
The manufacturing facilities, located in Goth Machhi near Sadiqabad in Rahimyar Khan consist of two ammonia/ urea plants with a designed production capacity of 1.33 million tons of urea per annum based on natural gas from Mari Gas Fields. One newly acquired urea plant (FFC-3 formerly PSFL) of 574 kt annual designed capacity has increased the Company's urea manufacturing capacity to 1.904 million tons per annum. This manufacturing facility is located at Mirpur Mathelo, district Ghotki in Sindh province.
Over the years, the Goth Machhi plants have demonstrated operational excellence which serves as a reference for the related process technology engineering concerns. Delegations from China, Middle East and Far East have visited the Plant site to acquire knowledge for their investment decisions. Product quality is accorded high priority and ISO-9002 certification confirms the excellent operational and maintenance skills of the employees and their level of performance. Great emphasis is placed on safe operations. Many awards of honour from National Safety Council, U.S.A. reflect strict compliance of plant safety standards.
FFC commenced marketing operations in April 1979 with a pre-production programme called the Seeding Programme. With the commencement of commercial production in June 1982, FFC launched its product under the brand name "SONA". Since inception, a growth oriented marketing strategy has been adopted keeping in view future expansions. FFC operates in all the four provinces of the country and Azad Kashmir. The marketing area is divided into 3 sales zones, 14 sales regions and 66 sales districts with a network of 3,300 well trained dealers. This network is spread over 1500 locations. Due to seasonality of fertilizer consumption, the Company has a network of 150 field warehouses to meet its storage requirements. Company's sales activities are well supported by planning, distribution and warehousing, advertising and sales promotion, finance, administrative and farm agronomic services.
From the very beginning FFC was able to meet the challenges. It was able to market its entire production and capture the desired market share. Sona urea was accepted by the farming community and Sona brand was established as a premium brand. With the start-up of its plant, the country became not only self sufficient but also surplus in urea. FFC exported urea to many countries from 1983-86. However, when local demand exceeded production in 1986 the country again started importing urea. FFC once again came forward and put-up another urea manufacturing facility at Goth Machhi to meet the growing demand. The new plant commenced commercial production in March 1993.
The Government of Pakistan deregulated the trade and prices of phosphatic fertilizers in Aug 1993. Subsequent to this decision FFC started self imports of these fertilizers and as a result timely imports were arranged. Farmers were provided quality product in bags with guaranteed correct weight. This brought a very positive qualitative change in the phosphatic fertilizer business.
FFC believes in selling a programme rather than just products. To this end, the Company has adopted a customer oriented strategy by marketing quality products backed by efficient and effective support services with emphasis on developing the market through practical and innovative farmer education. Farmer Advisory Service with well qualified agronomists was established by the Company in 1981, a year before the commencement of commercial production. This free of cost and on the spot service to the farmers is provided in the form of crop demonstrations, field days, farmer meetings, group discussions, farm visits and distribution of technical literature in Urdu/ Sindhi on important crops. The farmers are also provided highly subsidized soil/ water testing facilities through laboratories equipped with latest equipment and computerized recommendation systems at the five Farm Advisory Centres. The Company pursues an innovative education oriented advertising policy utilizing electronic/ print media and roadside advertising. Radio commercials are developed in regional languages.
In order to increase Company value through sustainable growth FFC is now going global and exploring new ventures outside the country. In pursuit of this FFC is setting up a phosphoric acid plant in Morocco in collaboration with OFFICE CHERIFIEN DES PHOSPHATES (OCP) Morocco with 50:50 equity partnership, under the name of Pakistan Maroc Phosphore S.A. The estimated cost of the project is US$ 200 million and is scheduled to be commissioned by the end of 2006.
FFC has conducted four international seminars on core agricultural issues. Through these seminars which were attended by various local and foreign luminaries, special recommendations were developed to address the issues and enhance agri. production.
Fauji Fertilizer Company Ltd. remains committed to play its role in the development of agriculture in Pakistan by not only supplying high quality fertilizers but also technical services to the farmers in the years to come for improving agricultural productivity and increasing their income.