Fertiliser Industry of Pakistan1

8/8/2019 Fertiliser Industry of Pakistan1

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F ERTILIZER INDUSTRY OF P AKISTAN

ANUM QURESHI

HENNA FATEMAH

INSIYA HABIBMADIHA MUNIR

Presented By:


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H ISTORY OF THE F ERTILIZER INDUSTRY OF

PAK IST A N

At the time of independence there were nofertilizer plants in Pakistan in spite of the fact thatthis country was largely agrarian. R ecognizing theimportance of proper use of fertilizer onagricultural production various governments in thepast have made conscious efforts to attract foreigninvestment in this sector.


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A N OVERVIEW

T he fertilizer sector in Pakistan currently comprises of 10companiesT he public sector has 4companies

T he private sector has 6I t is the largest fertilizer manufacturer in the country witha designed production capacity of 1,887 thousand tonnes of ureaF

ertilizer production is concentrated in nitrogenousfertilizers, which comprise 85% of all fertilizers producedin the country.


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D IFFERENT TY P ES OF FERTILIZER

T hree different types of fertilizers include:

N itrogen

Phosphorous

Potassium


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T AB LE 1: T O P 10 I NTERN A TION A L P L A YERS


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T AB LE 2 : T O P L OC A L F ERTILIZERP RODUCERS

F auji C ementE ngroD awood H erculesS itara C hemicalsE ngro C hemicals

ICI PakistanC lariant PakistanBOC PakistanW ah N oble C hemicals


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S IGNIFICANCE OF FERTILIZER

INDUSTRY IN PAKISTAN


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C ONTRIBUTION TO GDP YEARS Year GDP Contribution to GDPEXPORTS (000Rs)

1986-87 11023317 202998

2000-01 11726933 438047

2005-2006 11961472 313999

SOURCE: Census of Manufacturing Industries


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C ONTRIBUTION TOPAKISTAN S EMPLOYMENT

YEARS Year EMPLOYMENT COST

1986-87 449995

2000-01 2136393

2005-2006 3749314



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0

500000

1000000

1500000

2 000000

2 500000

3000000

3500000

4000000

1986-1987 2 000- 2 001 2 005- 2 006

contribution to pak ist a n's empl oy me nt cost

F ertilizer

Agriculture is the mainstay of the fertilizer industry. Asthe employment increased over the years, theconribution to employment cost increased. T herequirement of skilled labour being the reason.


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CAPITAL , PRODUCTIVITYINDICES

YEARS Year Labor productivityCapital

productivityProductivity

indices

1986-87 8.03 0.6 119

2000-01 6.34 0.87 100

2005-2006 1.61 0.6 30.65



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P RODUCTIVITY OF LABOR ANDCAPITAL , PRODUCTIVITY INDICES

Ex posure of domestic fertiliser producers to unfair competition.i) Pak- C hina, H azara plant was shutdown during May-June 1997.ii) Pak-Arab F ertilizer Multan remained stopped for 22 7 H ours in May 1997 for scheduled maintenance.iii) Maintenance of E ngro in June 1997.


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W AGES OF EMPLOYEES ANDINDICES

YEARS Year Wages Index

1986-87 8502884 101

2000-01 8417996 100

2005-2006 2375536 28



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W AGES OF EMPLOYEES ANDINDICES


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F ACTS ABOUT FERTILIZER

INDUSTRY IN PAKISTAN


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0

2 0,000,000

40,000,000

60,000,000

80,000,000

100,000,000

1986-87 2 000-01 2 005-06

PRODUCTION VALUE

PRODUCTION

PRODUCTION VALUE INDEX (BASE YEAR 2000-01) GROWTH RATE

1986-87 7,091,612 27.35 1.5

2000-01 25,925,423 100.00 2.66

2005-06 92,827,908 358.06 2.58

ANALYSIS AND REASONING:

S mall size of industry.L ow demand because the fertilizer being used was organic.D ecline in growth rate due to acute shortage of natural gas, the

primary input of the industry.I ncreasing population pressure and food needs.


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VAL UE A DDED

0

2 0,000,000

40,000,00060,000,000

80,000,000

1986-87 2 000-01 2 005-06

VALUE ADDED

V A LUE A DDED INDEX (BASE YEAR 2000-01)

1986-87 3,616,552 26.71

2000-01 13,540, 22 1 100.00

2005-06 58,240,966 430.13

GROWTH R A TE

1.35

2 .74

3.30

ANALYSIS AND REASONING:The dumping of foreign fertilizers has hindered the growth of

the local industry and resulted in decline in net margins andprofitability.


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EXPORT

EXPORT INDEX (BASE YEAR 2000-01)

2000-01 438,047 100.00

2001-02 375442 85.72002-03 515617 117.72003-04 552853 126.22004-05 366206 83.62005-06 313999 71.7

0

2 00,000

400,000

600,000

2 000-01 2 001-0 2 2 00 2 -03 2 003-04 2 004-05 2 005-06 ANALYSIS AND REASONING:

N ew varieties used, high yield, more fertilizers needed.T he global supply and demand balances for phosphate rock istightening as the supply growth rate is decreasing.


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IMPORT

010,000,0002 0,000,00030,000,00040,000,00050,000,000

2 000-01 2 001-0 2 2 00 2 -03 2 003-04 2 004-05 2 005-06

IMPORT INDEX (BASE YEAR 2000-01)

2000-01 9,841,721 100.00

2001-02 10,904,457 110.802002-03 14,068,416 142.952003-04 16,404,655 166.682004-05 2 4,793,656 251.922005-06 40,786,887 414.43

ANALYSIS AND REASONING:Ex cess supply of urea in the international market and the

absence of any anti dumping duties, have made Pakistan an easytarget for dumping by the producers in certain countries.

R apid population growth and limited reserves of goodagricultural land.


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Fertiliser Industry of Pakistan1