Karachi, February 16, 2024 – Engro Fertilizers, Pakistan’s leading seed-to-harvest solutions provider, announced a historic achievement with a record urea production of 2.3 million tons in 2023.
This significant milestone is a part of the company’s commitment to supporting the government’s initiatives aimed at ensuring affordable and ample supplies for farmers, thus contributing to the nation’s food security.
Despite facing challenges such as tough macroeconomic conditions, higher super tax imposition, and gas price hikes, Engro Fertilizers played a pivotal role in sustaining Pakistan’s food security. The company also had to navigate the impact of a steep Rupee devaluation, particularly for its 950,000 tons Base Plant, which is supplied gas under Petroleum Policy 2012 pricing, linked to the dollar due to its connection with crude oil rates.
According to the latest annual results, Engro Fertilizers witnessed an 18.3 percent surge in urea production compared to 2022, reaching 2.3 million tons, driven by enhanced operational performance in both EnVen and Base Plants. Urea sales experienced a corresponding uptick of 20.3 percent, reaching 2.32 million tons, contributing to a market share increase to 35 percent.
In a company statement, it was highlighted, “The local fertilizer industry has ensured that farmers continue to benefit from lower domestic urea prices. The Maximum Retail Price (MRP) of urea stood at PKR 3,596/bag at year-end, at a discount of 40 percent to international prices. This delta constitutes a contribution of approximately PKR 330 billion per annum towards farmer income in Pakistan.” The industry is actively collaborating with dealers to support government initiatives to curb urea hoarding, manipulate market prices, and enhance crop productivity and farmer profitability.
In 2023, the robust domestic urea manufacturing industry, including Engro Fertilizers, facilitated import substitution worth USD 2.3 billion. Engro Fertilizers alone contributed USD 835 million to this import substitution. Furthermore, the company made a substantial contribution of nearly PKR 34.7 billion to the national exchequer through government taxes, duties, and levies in 2023, compared to PKR 11.6 billion the previous year.
On a consolidated basis, Engro Fertilizers reported a profit after tax of PKR 26.2 billion with an earnings per share (EPS) of PKR 19.61 in 2023. This remarkable financial performance was attributed to increased production from long-term reliability projects, cost optimization, efficient working capital management, and higher interest income.
To sustain domestic urea production levels and safeguard Pakistan’s food security, Engro Fertilizers, along with other major fertilizer manufacturers, is making substantial investments in the Gas Pressure Enhancement Facilities (PEF) project. Engro Fertilizers’ expected share of capital expenditure in this project is over USD 100 million.
The accomplishment of Engro Fertilizers in achieving record urea production not only reinforces the company’s dedication to agricultural development but also plays a vital role in ensuring the food security of Pakistan amid a challenging economic landscape. As the nation continues to grapple with global uncertainties, such achievements contribute significantly to the resilience and sustainability of the agricultural sector.
