The government’s inability to ensure gas supply to Engro Chemicals for setting up Asia’s largest fertilizer plant in Pakistan may deprive the country of the much-needed firm as the company has started considering setting up its network in one of the Gulf countries.

Engro Chemicals, which has been in the agri-business and its products marketed under the brand name Engro, has informed the government of its plan to set up Asia’s largest fertilizer plan in Pakistan, an official of the Ministry of Industries told Daily Times.

The company has asked the government to ensure gas supply as Pakistan does not have enough gas for providing it to fertilizer firms, which use the bulk of gas supply as feedstock - an essential ingredient of the chemical fertilizers.

According to the calculations of the government and fertilizer firms, the fertilizer consumption may increase considerably as weather forecast suggests that there will be more rainfalls in the coming years.

According to the official, the government provides gas, which is used as feedstock, to firms on subsidised rates. However, due to depleting natural gas reserves, the setting up of a new fertilizer firm could not be materialised, the official said and feared that the gas scarcity might also hit the plan of establishing two new fertilizer firms which had already been approved by the government.

Pakistan is largely dependent on the import of chemical fertilizers. The government has already announced importing 0.5 million tonnes of urea till January 2006, and in the given scenario, the import of urea and other fertilisers could be increased.

Engro is one of the large urea fertilizer producers of the country, with a production capacity of over 850,000 tonnes per annum. It enjoys a market share of around 20 percent of the country’s total fertilizer market.

After its successful experience of joint ventures in Pakistan, the company recently announced its intention to initiate ventures overseas.

The country it has selected for its first investment is Oman.

According to the official, the landed cost of imported urea comes to over Rs 17,500 per tonne on arrival at Karachi port while the price of locally produced urea is around Rs 10,000. The price of the urea goes higher when the shipment is transported to northern parts of the country.

According to calculations of the government, the price of urea touches Rs 27,000 per tonnes after being transported to northern parts of Punjab and the whole of the NWFP, showing a much bigger difference in the prices of the imported urea and that produced locally.

The fertilizer off-take stood at 2,811.4 thousand nutrient tonnes in July-March 2004-05 or higher by 10.2 percent compared to 2,552 thousand nutrient tonnes in the corresponding period of the last fiscal year, says the Economic Survey of Pakistan, 2004-05.

The official, however, clarified that the fertilizers consumption has considerably increased. Their production has not decreased as it is being assumed.

The fertilizer production increased by 5.12 percent in the first ten months of this fiscal and stood at 4,928,016 metric tonnes against 4,688,099 metric tonnes in the same period of the last fiscal.

http://www.dailytimes.com.pk/default.asp?p..._9-6-2005_pg5_8

Now I understand why Gen. Musharaff was seen very keen on gas supply from Qatar and has in fact agreed to see the whole project personally with the Emir of Qatar.

As long as Gen. Musharaff is around .. i know such companies will be chased to invest in Pakistan.

must7,

Swaminathan S. Anklesaria Aiyar – brother of Mani Shanker Aiyar – has also advised India to set up Electric Generation, Fertilizer and Chemical Plants etc. in the Persian Gulf.

The Transmission of Electrical Power by a Submarine Cable is envisaged by Mr. Aiyar.

Possible?

Fertilizer and Chemical plants – Yes.

Power “under sea” : Your Guess is as good as mine.

Read Mr S. S. A. Aiyar on his website www.swaminomics.org

Peace

Engro signed Mou with the Govt of Oman 3 years back but it could not be materialised, but its a good stock to invest never the less, its now pursuing a very ambitious diversification programme. Engro was formally known as Exxon chemical Pakistan Limited and in 90s when Exxon corporation made a strategic decision to divest from the fertilizer business the management bought it out.

When Exxon left there was a good chance Engro would shut down. A very bright exec by the name of Shaukat Mirza, undertook an employee buy-out of Engro. Engro went on to become one of the largest and most profitable enterprises in Pakistan.

This great executive was gunned down as head of PSO, in broad daylight on Teen Talwar in Karachi, yards from PSO headquarters.

The perpetrators were a strange concoction of MQM supported labor unions and Sunni Sectarian groups who were used as the gunmen. Shaukat was a shia.

A great loss of a brilliant business mind for Pakistan.

Akram Lahori of Lashkarey Jhangvi was the culprit, the mian person beging this act and it was a pure sectarian act.

The gas pipeline from Qatar is for CNG...It has nothing to with fertilizer utilization...however I would say that the pipeline from Iran might be usefull.

Engro signed Mou with the Govt of Oman 3 years back but it could not be materialised, but its a good stock to invest never the less, its now pursuing a very ambitious diversification programme. Engro was formally known as Exxon chemical Pakistan Limited and in 90s when Exxon corporation made a strategic decision to divest from the fertilizer business the management bought it out.

Thanks for the info, however, the problem with Oman is Omanization, i think for such a big plant Omani manpower would have been very costly for the running of the project ..

The gas pipeline from Qatar is for CNG...It has nothing to with fertilizer utilization...however I would say that the pipeline from Iran might be usefull.

CNG is not the transported form, it is usually LNG. Not to mention read the article .. the problem is gas supply for the Engro plant .. and the speed at which GOP is moving towards the Qatari supply deal had taken me for a surprise, cause surely the deal with Qatar would be much costlier than Iran .. but still our General was too keen on it ! and my question why where will Pakistan take out such hard cash from ?

When Exxon left there was a good chance Engro would shut down. A very bright exec by the name of Shaukat Mirza, undertook an employee buy-out of Engro. Engro went on to become one of the largest and most profitable enterprises in Pakistan.

This great executive was gunned down as head of PSO, in broad daylight on Teen Talwar in Karachi, yards from PSO headquarters.

The perpetrators were a strange concoction of MQM supported labor unions and Sunni Sectarian groups who were used as the gunmen. Shaukat was a shia.

A great loss of a brilliant business mind for Pakistan.



Ooooh these foking morons ! killing DCN engineers (Agosta transfer of technology), killing the head of POF and now this ... & they call themselves Pakistani's !!!!