BUSINESS POLICY

HINAA MARYAM (BBA-152018)

 50% MARKET SHARE FERTILIZER GIANT
FAUJI
•
• IMMPECCABLE TRACK RECORD
• PIONEER IN ENERGY SECTOR
• TOP IN 25 COMPANIES IN THE STOCK
EXCHANGE FOUNDATION
•
•
•
WELL ESTABLISHED MARKET PLAYER
DIVERSIFIED BUSINESS PORTFOLIO
FORMER INTERNEE EXPERIENCE
FERTILIZERS
 Designing MSEM
MISSION STATEMENT EVALUATION MATRIX
To provide our customers with premium quality products in a safe, reliable, efficient and
environmentally sound manner, deliver exceptional services and customer support,
maximizing returns to the shareholders through core business and diversification,
providing a dynamic and challenging environment for our employees.
MSEM Components
Organization Customer Products/ Markets Technology Survival. Philosophy Self-Concept Public Employee Score
Service Growth, Image Concern
Profitability.
Fauji Yes Yes No No Yes Yes Yes Yes Yes 7
Fertilizers
Ltd.

Statements To provide  premium maximizing safe, core business Environm dynamic and 7
our quality returns to reliable, and -entally challenging
customers products the efficient diversification sound environment
 exceptiona shareholders manner for our
l services employees
and
customer
4
support,
Designing SWOT Matrix
Strength, Weaknesses, Opportunities, & Strengths
 Strengths
o First in top 25 companies registered in the Pakistan Stock Exchange since last 8 years.
o Holds 48% market share in Urea and 50% market share in DAP fertilizer. (Fauji Fertilizer
Company Limited, 2017)
o Ever increasing production capacity across all production plants resulting in surplus product
for exports.
o A standard in setting agricultural practices in relation to fertilizer usage.
o Sona Urea is a generic name in the market, helping illiterate farmers identify with the name
and lead to immensely high sales of the product.
o Well-developed major warehouse network across country for uninterrupted supply to
farmers.
o Established since 1978, makes FFC an established oligarchy in the market.
o FFC has an educational advertising policy across all media for consumers that furthers the
awareness of the company. Also provides educational services for farmers in agricultural
practices.
6 o Has a diversified business portfolio including banking, cement, energy, food, and chemicals.
o (Author’s Internship Report)
Weaknesses
o Complex organizational hierarchy owing to vertical integration that causes
alignment issues.
o FFC has no disaster management or recovery plans in documentation.
o No infrastructure for data security as of yet.
o Declining value of market shares over a 5-year period is impacting net
income from sales.
o Declining profit trends due to distribution and finances cost increases. (Fauji
Fertilizer Company Limited, 2017)
o Sourcing and production issues in raw materials for producing fertilizer
owing to the energy crisis and sensitive international trade relations from
source countries.

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 Opportunities
o Sustainability and corporate social responsibility to boost public image.
o Farmers aware of benefits of higher crop yields from proper fertilizer usage
propagate the information to other farmers ensuring wider market consumption.
o Further expansion in the energy sector. (FFC has a wind farm at Jhimpir that is
active on the national grid).
o Using CSR efforts in education, healthcare, and energy deficiency solutions in
under-privileged regions of the country.
o Government support for fertilizers companies and their subsidiaries to have a
more authoritarian role in the light of aggressive Chinese investors. (KHAN, 2018)

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Threats
o Advancement in technology has resulted in new entrants in the
fertilizer, food, chemical, and energy industry. (Fatima Group –
2005) (Engro Fertilizers – 2009)
o Ongoing energy crisis, rising material costs, higher customs
tariffs on imports, reliance of the fertilizer industry on foreign
raw material.
o China is expected to set up a fertilizer plant in Pakistan with
800K tone/year production. (KHAN, 2018)

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Designing EFE
EXTERNAL EVALUATION MATRIX
 External Factor Analysis Matrix
Weight Rating Weighted Score
Opportunities
1 Issuance of Regasified Liquid Natural Gas licenses to Exxon Mobil, Royal Dutch, and Mitsubishi to develop terminals in
0.1 4 0.4
Pakistan. (Retuers, 2019)
2 Planned subsidies for farmers to protect them the variations in prices of commodities and ensuring food security. 0.04 3 0.12
3 Striving for higher seed quality to induce higher crop yield and strive to feed the growing population of the country. (Indian
0.05 3 0.15
seed is 100% certified quality whereas Pakistan is at 25% quality seed). (Kazmi, 2017)

4 With Pakistan having upgraded to a urea-surplus country, exports should be encouraged of surplus inventory during
0.12 2 0.24
international price spikes to earn foreign exchange. (Kazmi, 2017)
5 Availability of technologies to design better, high yielding, and environmentally friendly fertilizer. 0.08 3 0.24
6 Educational opportunities in agricultural sciences could be funded by the government to educate farmers nationwide, leading
0.06 3 0.18
to benefits in the fertilizer and agricultural industry and allow significant GNP.

Threats
1 Gas shortage and mis-allotment to various industries, which is a major requirement in fertilizer production, might cause
0.04 4 0.16
issues to production capacities of the fertilizer market.
2 The potential shift to bio-fertilizers as an alternative and organic approach in countries abroad could impact export revenue
0.06 3 0.18
and trade relations.
3 Uneducated and ignorant farmers lead to damaged farmland and environmental issues from improper fertilizer use every year
0.15 3 0.45
despite the industry offering facilities for fertilizer application.
4 Inflated LNG (liquified natural gas) prices every year. Last year prices rose from 30% to 80% which also affected the
0.05 3 0.15
subsidized prices of urea fertilizer. (Aslam, 2019)
5 Underutilization of cultivatable land (22 mil out of 79 mil hectares) in Pakistan. 0.09 2 0.18
6 Serious costs borne by fertilizer industry owing to late and in some cases non- payment of subsidies by the Government of
0.07 3 0.21
Pakistan. (Kazmi, 2017)
7 Urea prices have moderately decreased over the past 3-year trend, currently at $237/metric ton, meaning urea exports might
0.05 2 0.1
not be that profitable owing to sudden change in urea prices. (Index Mundi, 2019)
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8 The Gas Infrastructure Development Cess Ordnance that was criticized for favoring big businesses has been amended to
auditing and recovering around Rs300 Billion in dues that have not been paid by the top 5 fertilizer companies of Pakistan. 0.04 4 0.16
(Rana, 2019)
BELOW AVERAGE
o STABLE RESPONSE TO MARKET TRENDS
o INTERNAL AND FOREIGN POLICY ON FERTILIZER RAW
MATERIAL PURCHASE
o PROTECTIONISM ON SURPLUS IMPORTS
o DEVALUATION OF THE RUPEE

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 THANK YOU

QUESTIONS SHALL BE ENTERTAINED

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