4. COMPANY PROFILE
To be leading national enterprise
with global aspirations, effectively
pursuing multiple growth
opportunities, maximizing returns
on the stakeholders, remaining
socially and ethically responsible.
Vision Statement Mission Statement
To provide our customers
with premium quality
products in a safe, reliable,
efficient and environmentally
sound manner, deliver
exceptional services and
maximizing returns to the
shareholders through core
business and diversification,
providing a dynamic and
challenging environment for
Maintaining our competitive
position in the core business,
we employ our brand name,
unique organizational culture,
professional excellence and
financial strength diversifying
in local and multinational
acquisitions and new projects
thus achieving synergy
towards value creation for our
Engro Fertilizer Limited is a subsidiary of Engro
Corporation and having largest portfolio macro and
micro fertilizer products in Pakistan Fertilizer
industry. Having 34% share in Urea market and
22% in DAP market.
Fatima Fertilizer is a relatively new entrant in the
Fertilizer industry. It has penetrated the market
through multiple brands, such as, Pak Arab
Fertilizer and Sarsabz.
11. PORTER FIVE FACTOR ANALYSIS
Threat of New Entrants:
• High barrier to entry as the plant installation cost is too high. Further, the market has become saturated.
• The inputs like gas is depleting therefore, the government is not issuing the new gas certifications to the new firms.
• The inputs are too costly i.e. Phosphorus, Potassium etc.
• There is huge rivalry among current competitors.
Rivalry Among Competing Firms:
• The FFC is strong in Pakistan with approx. 40% market share. Therefore, the rivalry is super high.
• The quality products are similar. So, the competition is based on branding and acquiring farmers.
• There is an arch rich rival between FFC, Engro and Fatima.
• FFC has the edge of producing DAP domestically.
Power of Suppliers:
• The gas is regulated by the government. Thus, FFC can face the issue of shortage of gas (sometimes).
• The gas suppliers are very few. Therefore, the dependence has created the edge to the suppliers.
• FFC cannot influence the market prices as these are regulated by government.
• Except gas, other raw materials are imported thus, the dependence on these are high.
12. PORTER FIVE FACTOR ANALYSIS
Power of Buyers:
• No any perfect alternate to Urea.
• Customers are brand loyal.
• The products have substitutes i.e. increase in prices of urea increases the sales of the DAP.
• Farmers can’t influence price.
• However, the perfect substitutes are there in brands i.e. Sona Urea Engro Urea, but farmers are reluctant to switch
due to the satisfaction from one product.
• The farmers are large in quantity and products are inevitable for production. Thus, the power lies to the company i.e.
Threat of Substitute:
• Natural fertilizer are not perfect substitutes.
• Emphasis on high yields pushes farmers to buy fertilizers.
• No threat of substitute of products until or unless, the product better than fertilizer can be developed.
13. SWOT ANALYSIS
• FFCL is the market leader in the industry having 48% of the market
• Strong financial strength.
• Strong Brand developed in market name as Sona
• Strong Dealer system all over country and assure availability
• Having developed and well planned 170 warehouses across country to
insure supply on time
• ISO certified
• Only producer of DAP named as Sona DAP in country having major
share in market
• High capacity of production in industry
• Good Policies and SOP
• Lengthy organizational hierarchy
• Highly centralized decision
• Not good portfolio of product
• Very small share in micro fertilizers market
• No substitute of DAP
• No substitute of Urea
• No granular Zinc
• No technical support team
14. SWOT ANALYSIS
• Urea demand is expected to remain buoyant on the back
of improved farmer economics and seed varieties.
• Increased support prices of crops like wheat sugar etc.
• Domestic fertilizer demand is going to be strong in the
coming cropping season due to higher farm income
from recently harvested crops.
• Having a strong financial position company can start
new product line.
• The government is going focus on the agriculture sector
due to its major contribution towards GDP, and
important issues like soil conservation, farm
mechanization, land reclamation and plant protection.
• The manufacturing costs pertaining to
the fertilizer industry were impacted
by inflationary factors, combined with
escalations in the prices of feed and
• Shortages of natural gas in the country
can limit the opportunities for the
company in future
• New competitors in the industry like
Fatima Fertilizer Company can reduce
the market share of FFCL
15. PEST ANALYSIS
• To fulfill local demand for fertilizers at affordable
prices, the Government is providing subsidy on
the production and import of fertilizers.
• Investors will be allowed to relocate second hand
plant and machinery, with the same
concession/exemption as applicable to new
• Import by manufacturers of Rock Phosphate and
Phosphorous of fertilizer free of customs duty.
• Tax relaxation has also been offered by the
Government, giving export benefit to suppliers of
capital goods for new/modernization projects
• Tax relaxation has been offered in order
to attract new entrants and to reduce the
dependence on imported fertilizers by
enhancing the local production capacity.
• The Government is providing a subsidy
on the production and import of
fertilizers. A massive subsidy of
Rs.27billion in the supply of urea and
DAP in FY09.
• Ban on the export of fertilizer is also
imposed for the economic stability.
16. PEST ANALYSIS
• Although the adverse effects of this
industry is very high because of the
improper handling of the waste. Due to
this, many diseases like asthma, kidney
diseases, hepatitis etc are caused. Still,
the usage of the fertilisers cannot be
stopped because it gives farmers so
much ease in terms of saving time and
• In order to meet the expectation of
fertilizers in the country, a strong
technological base is required in the
planning and development of specific
engineering and expertise in project
management and execution.
• The fertilizer industry is also carrying
out several schemes, including energy
saving and de-bottlenecking in their
current plants to improve the capacity
and reduce the energy consumption
per ton of product.
18. Key Internal Factors Weight Rate Weighted
FFCL is the market leader in the industry having 48% of
the market share.
0.1 3 0.3
Strong Brand developed in market name as Sona 0.2 4 0.8
Strong Dealer system all over country and assure
0.2 3 0.6
Only producer of DAP named as Sona DAP in country
having major share in market
0.1 3 0.3
Highly centralized decision 0.2 2 0.4
Very small share in micro fertilizers market 0.1 2 0.2
No technical support team 0.1 1 0.1
Total 1 2.7
20. Key Internal Factors Weight Rate Weighted Score
Urea demand is expected to remain buoyant on the back of
improved farmer economics and seed varieties.
0.2 3 0.3
Increased support prices of crops like wheat sugar etc. 0.1 4 0.8
Domestic fertilizer demand is going to be strong in the coming
cropping season due to higher farm income from recently
0.2 3 0.6
The government is going focus on the agriculture sector due to its
major contribution towards GDP, and important issues like soil
conservation, farm mechanization, land reclamation and plant
0.1 3 0.3
The manufacturing costs pertaining to the fertilizer industry were
impacted by inflationary factors, combined with escalations in the
prices of feed and fuel gas
0.25 2 0.4
Shortages of natural gas in the country can limit the opportunities
for the company in future
0.1 2 0.2
New competitors in the industry like Fatima Fertilizer Company
can reduce the market share of FFCL
0.05 1 0.1
Total 1 2.7
24. SO STRATEGIES
• Offer tailored fertilizer services based
on new seeds
• Pricing strategies in line with new Govt
• Express decision making processes to
bypass organizational hierarchy
• Idea generation incentives to counter
inefficiencies of centralized decision
• Develop Marketing centric research
teams to counter competitor threats
• Adopt newer production technology to
• Develop new product line to penetrate
• Develop technical sales divison