Chairman's Message

Fatima Fertilizer Company Limited has a bright future and the company looks forward to growth in volume and return for its investors.

On behalf of the Board of Directors of Fatima Fertilizer Company Limited, I welcome you to the Company’s website.

2018 has been another year of satisfaction for the Board and the Company’s management. The Company improved upon all previous benchmarks be it in terms of production volumes, sales revenues or bottom-line results. We strengthened our growth trajectory and continued to see results from our marketing campaign positioning Sarsabz as the reliable yield enhancement partner for progressive farmers across the country. Revenue increased by 22% over last year while profitability increased by 25%, which confirms our confidence in the Company’s future.

The Manufacturing operations are to be congratulated for their continued efficiency and productivity improvement efforts confirming that our traditional focus on high HSE and manufacturing standards translates into profitability.

Your Company is fully aware of the challenges ahead in the shape of inflationary pressures, increasing mark-up rates, discontinuation of subsidy and significant depreciation of the Pakistani Rupee. While meeting these challenges, our Company is well positioned for continued prosperity and growth and expect 2019 to bring improved benefits for all stakeholders.

Market Overview

Market dynamics for the agriculture sector remained positive during the year with firm product prices, and steady fertilizer application. However, massive challenges in the shape of high inflation, increasing markup rates, discontinuation of subsidy and significant depreciation of Pak Rupee took their toll.

Total offtake and production of Urea remained at par with last year, at 5.8 million MT and 5.7 million MT respectively. Continuous shutdown of fertilizer plants operating on SNGPL network due to non-availability of natural gas at viable rates, resulted in a widening of the demand and supply gap for Urea in the country. Being cognizant of this immediate supply gap, the Government imported 105K MT Urea. The long-term solution came in the shape of the supply of blended gas/RLNG at a considerably higher price than indigenous gas to the closed Urea plants only.

Total offtake of CAN and NP dropped 17% and 37% respectively to 608K MT and 391K MT from 731K MT and 622K MT in 2017. The decline is attributable to short supply resulting from closure of the production plant operating on the SNGPL network.

In the Phosphate market, DAP offtake dropped by 6% from 2.38 million MT in 2017 to 2.23 million MT in 2018 due to the consistent price hike in the international market and impacts of the Pak Rupee devaluation.

Company Performance

Our financial disciplines and firm asset base are the foundation of our strong financial performance. Your Company continued to show improved results on the back of strong market demand and firm product prices.

Production remained strong and stable throughout the year as throughput of all plants exceeded their nameplate capacities. Sales also remained almost equivalent to last year.

Acknowledgement

The Board places on record its gratitude for the hard work and dedication of every employee of the Company. The Board also appreciates and acknowledges the assistance, guidance and cooperation of all stakeholders including the Government of Pakistan, financial institutions, commercial banks, business associates, customers and all others whose efforts and contributions strengthened the Company.

Arif Habib
Chairman
Fatima Fertilizer Company Limited

Page Last Updated: Tuesday, May 28, 2019