In 2023, Engro Fertilisers, the leading supplier of seed-to-harvest solutions in Pakistan, produced a record 2.3 million tonnes of urea, assisting the government in its endeavours to provide farmers with plenty and reasonably priced supplies.
Notwithstanding the challenges posed by challenging macroeconomic conditions, the implementation of a higher super tax, and increases in petrol prices, the company managed to accomplish this achievement and has continued to play a crucial role in ensuring Pakistan’s food security.
Because its 950,000 tonnes Base Plant receives petrol under Petroleum Policy 2012 pricing, which is dollar-pegged because it is tied to the price of crude oil, Engro Fertilisers was also impacted by the sharp devaluation of the rupee.
Based on the most recent annual statistics, the production of urea at Engro Fertilisers increased by 18.3% compared to 1.95 million tonnes in 2022. This increase was attributed to better operational performance at both the Base and EnVen Plants. As a result, the company’s urea sales surged by 20.3 percent to 2.32 million tonnes, and its market share rose to 35 percent.
Farmers are certain to continue to profit from cheaper domestic urea pricing thanks to the local fertiliser industry. By the end of the year, the Maximum Retail Price (MRP) of urea was reduced by 40% from international prices to Rs 3,596/bag. An official statement from the corporation stated that this difference adds about Rs 330 billion to Pakistani farmer income annually.
In order to boost crop productivity and farmer profitability, the sector is also enlisting dealers to support government attempts to stop urea hoarding for the purpose of manipulating market prices.
The strong domestic urea production sector made import substitution possible in 2023 to the tune of $2.3 billion, of which $835 million went to Engro Fertilisers. Furthermore, the corporation paid government taxes, duties, and levies totaling almost Rs 34.7 billion to the national exchequer in 2023 as opposed to Rs 11.6 billion in the previous year.
Profits per share (EPS) for Engro Fertilisers in 2023 were Rs 19.61 and the company recorded a consolidated profit after tax of Rs 26.2 billion. The corporation ascribed its success mainly to enhanced output from long-term reliability initiatives, cost reduction, greater interest income, and efficient working capital management.
Engro Fertilisers and other significant fertiliser producers are making significant investments in the Gas Pressure Enhancement Facilities (PEF) project in order to maintain domestic urea output levels and protect Pakistan’s food security. Over USD 100 million is anticipated to be Engro Fertilisers’ capital expenditure contribution in this project.