Pakarab Fertilizers Chairman's Message
On behalf of the Board of Directors of Pakarab Fertilizers Limited, I am pleased to welcome you to the Company's website.
Global Fertilizer Market
The global fertilizer market has seen some unprecedented volatility over the last few years. The sharp rise and fall in prices have been reflected in the unpredictability of prices in Nitrogen, Phosphate and Potash. The recent upturn and its possible recurrence in the future have been driven by some demand factors. These include crop prices also reaching record levels both globally and locally. Farm economies have improved significantly, encouraging farmers to apply more fertilizers. Prices of fertilizers have been increasing dramatically with factors such as input cost (Phosphate and Sulphur prices jumped significantly). However, with other key drivers such as farm economies and the global food security programs, the demand for fertilizers is expected to remain firm.
Domestic Fertilizer Marketing of Nitrogen and Phosphate based Fertilizers
The domestic market running in tandem with the global scenario saw some dramatic growth in fertilizer consumption. With strong crop profitability particularly in cotton, wheat and sugarcane, the fertilizer utilization has been good.
Punjab constitutes 70% of total fertilizer usage, followed by Sindh with 22% share in product off-take.
From a valuation standpoint, a difficult situation in Rabi may arise, which could potentially hurt product off take. Potential upside to this scenario could be seen in terms of better fertilizer application going forward in 2011 to cater for soil erosion caused by flood, better water availability which could encourage higher wheat cultivation in other districts and limited demand deterioration for manufacturers.
Revamp and Expansion Project
Pakarab Fertilizers Limited plans to revamp and expand its existing fertilizer manufacturing capacity by making an investment of approximately PKR 22.000 billion. In this respect, Pakarab Fertilizers plans to increase its Ammonia plant production capacity by 138,000 tons per year from its current production of 316,800 metric tons per year.
Outlook and Challenges
Due to the devastating floods the profitability of the farmers will be affected. However, the challenge is to prepare the fields for Rabi crop. The government focus on increasing the yields and cultivable area will act as a catalyst in promoting fertilizer sales.
We, at Pakarab Fertilizer Limited, are committed to playing a substantial role in the promotion of balanced application of fertilizers and the sustainable development of Pakistan. Our recently launched “Sarsabz” brand, a representation of quality products being produced at Fatima Fertilizer Company Ltd. and Pakarab Fertilizer Ltd., will bring increased yields for farmers and economic growth for the country.
Acknowledgements
The Board of Directors wish to place on record their appreciation for the assistance, guidance and cooperation that Pakarab Fertilizers received from all stakeholder including the Government of Pakistan, financial institutions, commercial banks, SNGPL, business associates, customers and all others whose continued support has been a source of strength to the Company. The Directors also sincerely appreciate the devotion and commitment of every employee of the Company.
Muhammad Arif Habib
Chairman
Pakarab Fertilizers Limited
