ENGRO, A TRUSTED NAME IN FERTILIZER

SADAF AURANGZAIB
Sep 17 - 23, 2007

Engro , a name synonymous with the fertilizer industry of Pakistan is one of the largest producers of urea fertilizer and marketed under the brand name of Engro. It also produces crop specific NPK fertilizers at their plant at Port Qasim Karachi and these are marketed under the brand name of "Zarkhez". Engro also markets imported MAP fertilizer under the brand name of "Zorawar" and imported DAP fertilizer. The company also markets micronutrients Zinc Sulphate branded as "Zingro" and Boron branded as "Zoron"

We had the chance to meet the General Manager Agri business of Engro Chemical Pakistan Limited, Mohammad Khalid Mir who has been associated with the firm for almost twenty five years and we talked about the fertilizer industry and the contribution of Engro. He mentioned to us that Engro Chemical Pakistan Limited is the second largest producer of Urea fertilizer in Pakistan. The company was incorporated in 1965 and was formerly Exxon Chemical Pakistan Limited until 1991, when Exxon decided to divest their fertilizer business on a global basis and sold off its equity of 75% shares in the company. The company was renamed as Engro Chemical Pakistan Limited. Engro accomplished significant progress not only in its base urea fertilizer business but also in diversification projects. Engro has over thirty years of experience of fertilizer marketing in Pakistan with an elaborate dealer network. Engro has the widest product range in fertilizers.

NITROGENOUS FERTILIZERS

ENGRO Urea - A trusted name with farmers

PHOSPHATIC FERTILIZERS

ENGRO Di-Ammonium Phosphate (DAP) & Zorawar - Leading Phosphatic fertilizers

COMPOUND FERTILIZERS

ENGRO Zarkhez- Towards Balanced Fertilization

MICRONUTRIENTS

Taaqatwar Tonics is the name for Micronutrients business. There are 2 brands being imported and marketed by ECPL under the Tonics category. They are namely:

ZINGRO & ZORON

Both the brands have complementing benefits and these tonics 'Increase the efficacy of fertilizers' and 'Give great value for money'

He stated that in the Urea production and the DAP production, Pakistan is still not self sufficient. The demand for urea is about five million tones per annum, out of which Pakistan produces 4.5-4.6 million tones a year, this shortage is met with the imports which sometimes shuffle the pricing mechanism and demoralize the farmers to an extent.

However Engro is working in tandem with the government to suggest as to when to import and when to avoid imports. He said that the basic problem with this industry is not adulteration which is less than 1% but the main problem is the insufficient supply to meet the demand. However Engro is working hard to make things easy for the agricultural community on a whole. The price charge by Engro on a 50 Kg Urea bag is Rs.530 however internationally the same bag cost amount Rs1200/50Kg. He also mentioned that the government has taken measures to ensure the availability of fertilizers. Primarily the raw material for Urea is the Natural Gas that is allocated by the government. Recently government asked the companies to venture into a Gas bid as some gas was available with the government, Engro entered the bid and won it and now it is planning ahead for a plant to be workable by 2010 of the additional capacity of 1.3 million tones per annum. This will give Pakistan an edge to meet the internal demand and to have a bit of Urea as a surplus; hence it could then be exported to other countries. He mentioned that today the overall production capacity of Engro is 950,000 tones a year, with the additional plant (1.3 million tones a year) coming up the overall capacity will become 2.3 million tones per annum. The growth in the production capacity of Engro is phenomenal as today it is producing almost ten times what Engro was producing at the time of its inception.

While shedding the light on the awareness needed for the farmers, he said that the farmers should know that every plant needs all forms of fertilizers for the growing need of the plant. The basic fertilizers are nitrogenous fertilizers that is Urea, phosphates i.e DAP and potash, in our agricultural lands 80% farmers use Urea, 40-45% use Phosphate and there is a worst situation in the usage of Potash i.e. only 10% farmers use potash fertilizers as Potash is normally available in the soil but with the constant cultivation, it gets depleted. The problem is to how to balance the use of fertilizers. Engro worked very hard and then established that balanced fertilizer by the name of 'Zarkhaiz'. Every frill in that fertilizer comprise of all the basic fertilizers that is Urea, phosphates and potash. With the usage of the balance fertilizer the yield can be increased by 30-35% and Engro has already done that experiment. He mentioned that the overall demand of the phosphates is 1.6-1.7million tones per annum, Urea demand is 5 million tones per annum and Potash demand is nil at the moment but the actual demand for Potash is 40.000 tones per annum.

He urged that as the natural gas is supplied to them on a fixed rate, hence government should not think of exporting the fertilizers till the time we ourselves become self sufficient and have enough in our surplus for that move. On account of the demand variable in future, he said that the demand growth for Urea is around 3% per annum and the phosphates demand growth is 3-4%. Engro predict that the overall demand by 2011 will be around 5.7 million tones per annum, and by that time the country will be having a production supply of 6 million tones per annum, in the view of the new plant production (1.3 million tones per annum) expected in 2010. Hence by that time, if there wouldn't be an abrupt surge in the demand then the country will be having few surpluses to export.

Lastly he applauded the government steps to provide subsidy to imports as that has curtailed the price to an enormous extent like the DAP price which is Rs.1300/per 50 Kg bag, it carries a subsidy of Rs470 otherwise the same bag will cost around Rs1770 Per 50 Kg bag which could discourage the farmers. He said that when the farmers use nitrogenous fertilizer like urea instead of phosphates fertilizers, naturally the ability and the productivity of the plant will get down. He in his message urges the government to carry on with such incentives which will pave the way for farmers to use fertilizers and enhance their ability for better production and higher yield.