Fertilizer Industry Analysis of Pakistan

Abstract

Most sectors of the economy proved disappointing for shareholders, with some sectors being completely inactive. Amidst such a market, however, the fertilizer sector has shown stable and consistent results; with the key players performing extremely well in terms of profitability and being spurred on by racing demand. In 1995 alone demand for fertilizer grew by 11%, higher than the average rate of between 5-6% over the past few years. Now Fertilizer Industry of Pakistan is considered as one of the best industries of Pakistan. In fertilizer industry of Pakistan, by this time the three urea manufacturing companies; Fauji Fertilizer Company Limited, Engro Chemicals Pakistan Limited, Dawood Hercules Chemicals Limited are controlling bulk of the market share & enjoying a high profit. With this prosperity, industry is also facing some internal problems which are directly or indirectly related to industry. Some of them are; • Availability of Raw Material (Gas & Feedstock) • Prices of Gas • Import duties on Imported Raw Material • Government Policies & Regulations etc This report covers not only issues related to fertilizer industry (mentioned above) but also to find main reasons of causing these issues. The other topics which are covered in this report are pricing of local fertilizer products in comparison with international prices and give the reasons of the high prices of local product. The future outlook of the industry is also shown in this report and given recommendations to the industry on the basis of the analysis of industry. This report also covers the main strengths (Low cost labor, availability of raw material, & growing domestic market) and weaknesses (infrastructure of country, low productivity, technology obsolesces). It also covers the key opportunities and threats from the international fertilizer industry and government to local producers.