Research Analyst
Sep 12 - 18, 2011

FFC was incorporated in 1978 as a private limited company. This was a joint venture between Fauji foundation and Haldor Topsoe A/S of Denmark. The initial share capital of the company was Rs813.9 million. The present share capital of the company stands above Rs8.48 billion.

Additionally, FFC has more than Rs8.3 billion as long term investments which include stakes in the subsidiaries FFBL, FFCEL and associate FCCL.

The largest urea manufacturing facility of Pakistan consisting of two ammonia/urea units owned by FFC is built at Goth Machhi in district Rahim Yar Khan.

Goth Machhi is situated at a distance of 2 kms from the main Lahore-Karachi highway and is adjacent to the main railway line. The two plants are based on natural gas from Mari gas fields and have an annual designed production capacity of 1.3 million tons of urea. Over the years, the plants have demonstrated an operational excellence which has become a reference for the engineering companies.

Delegations from China, Middle East and Far East keep visiting the plant site for gaining first hand knowledge before deciding to purchase a new plant.

In 1991, the company was listed on Karachi and Lahore stock exchanges and in 1992 on Islamabad stock exchange when it was formed. Shares were offered to the public and the employees. In 1993/94, FFC achieved the distinction of paying the highest income tax in the country.

Based on the exemplary dividends to the shareholders and other criteria of Karachi stock exchange, FFC has consistently remained in the list of top 25 best performing companies of Pakistan consecutively for 16 years since 1994. As a result of excellent performance over the years, the company's ranking in the KSE list of 25 companies improved from fifth position in 1995 to second in 1996. It was awarded the first position in 1997 and again second prize in 1998.

During the first quarter ended March 31, 2011, the net profit of the company was recorded at Rs4.1 billion, surpassing previous record earnings of Rs2.7 billion, which translates into improved EPS of Rs4.84, driven by increased revenues and higher return on investments.

Aggregate 'Sona' urea production from all three plants of the company was recorded at 569,000 tonnes, with an overall operational efficiency of 113 per cent, which was lower by nine per cent compared to the corresponding period last year mainly because of gas curtailment and Plant III annual maintenance turnaround.

As a result of lower product availability and withdrawal of GST exemption by the government effective March 2011, urea sales were negatively impacted registering a decline of 13 per cent compared to the corresponding period. The company sold 546,000 tonnes of 'Sona' urea in addition to marketing of 76,000 tonnes granular urea and 103,000 tonnes 'Sona' DAP on behalf of FFBL, with combined market share in urea and DAP sales of 51 per cent and 63 per cent respectively.

Increased gas curtailment, sluggish imports and imposition of RGST on agriculture related items, including fertilizers, are likely to cause demand erosion which may have negative affects on the country's agriculture.

Furthermore, FFC has been providing agricultural advisory services to the farming community throughout Pakistan since 1981, for increasing the agriculture production in general and the farmers' economic returns in particular. The organization in pursuit of its national commitment and moral obligation maintains regular contact with farmers and agricultural institutions to ensure constant and efficient transfer of latest technology.

The company is also providing quality farm advisory services all over the country through its five farm advisory centers and 14 regional technical services officers.

Farm advisory centers are located at Mandi Bahauddin, Ghakar, Bahawalnagar, Muzaffargarh and Hala. Each centre has a team of five agricultural experts, providing multifarious advisory services through crop demonstrations, field days, farmer meetings, village meetings, crop seminars, farm visits and group discussions.

All the centers are fully equipped with modern sophisticated computerized soil and water testing laboratories and high-tech extension equipment.

Moreover, FFC has also established a micronutrient and plant tissue analysis laboratory at farm advisory centre, Ghakhar having atomic absorption spectrophotometer and other analytical instruments.

Soil testing is a valuable tool to propagate appropriate and balanced use of chemical fertilizers and to identify soil problems. Soil/water samples are collected from farmers' fields and analyzed in the laboratories.

Fertilizer recommendations are developed on the basis of soil analysis and recommendation reports are delivered to the growers for proper and balanced fertilizer use. The soil/water testing and micronutrient analysis facility is offered free of cost. Besides these five farm advisory centers, the company has 14 technical services officers based at 14 regional offices of FFC spread all over the country extending these services in their respective areas.

To further strengthen the advisory services and facilitate the farmers, FFC also publishes crop, vegetable, orchard brochures, posters and pamphlets containing latest information regarding production technologies of crops, and orchards grown in Pakistan.


  MAR 31, 2011 MAR 31, 2010
Sales 11,100,345 9,498,815
Cost of Sales 5,190,333 5,454,698
Gross Profit 5,910,012 4,044,117
Distribution Cost 1,017,579 902,550
Financial Costs 229,268 263,508
Net Profit before tax 6,119,024 3,821,087
Profit after Taxation 4,108,845 2,729,087
EPS (Rs) 4.84 3.22