Engro Fertilizers, Pakistan’s premier seed-to-harvest solutions provider, achieved a record urea production of 2.3 million tons in 2023 to support the government’s efforts to ensure affordable and abundant supplies for the farmers.
The Company was able to achieve this feat and continued to play a pivotal role towards enabling the food security of Pakistan, amidst the headwinds of tough macroeconomic conditions, imposition of a higher super tax, and gas price hikes said a news release issued here on Friday.
Engro Fertilizers was additionally affected by the steep rupee devaluation as its 950,000 tons base plant supplies gas under Petroleum Policy 2012 pricing, which is dollar-pegged due to its linkage with crude oil rate.
According to the latest annual results, Engro Fertilizers urea production surged by 18.3 percent compared to the year 2022 (1.95 million tons) due to improved operational performance of both EnVen and Base Plants.
Consequently, the Company’s urea sales witnessed an uptick by 20.3 percent to reach 2.32 million tons, while its market share also increased to 35 percent.
“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 Rs. 3,596/bag at year-end, at a discount of 40 percent to international prices.
This delta constitutes a contribution of approximately Rs. 330 billion per annum towards farmer income in Pakistan,” said a Company statement. The industry is also engaging dealers to support the Government’s initiatives to curb urea hoarding for market price manipulation, bolstering crop productivity, and farmer profitability.
In 2023, the robust domestic urea manufacturing industry enabled import substitution to the tune of USD 2.3 billion, including Engro Fertilizers’ share of USD 835 million.
Further, in 2023, the Company contributed nearly Rs. 34.7 billion towards the national exchequer by way of Government taxes, duties, and levies, compared to PKR 11.6 billion last year.
On a consolidated basis, Engro Fertilizers posted a profit after tax of Rs. 26.2 billion with earnings per share (EPS) of Rs. 19.61 in 2023, mainly on the back of 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 the food security of Pakistan, Engro Fertilizers and other major fertilizer manufacturers are investing heavily in the Gas Pressure Enhancement Facilities (PEF) project.
The expected share of Engro Fertilizers’ capital expenditure in this project is over USD 100 million.