An Introduction to Engro Foundation
June 2013
IFC Sustainability Exchange: Vocational Training
Improving Local Economies Through Skilled
Labor
• Introduction
• Engro Foundation: What We Do
• Vocational Training
• Dairy Value Chain
• Rice Value Chain
Contents
Engro Corporation has 3500 employees and revenue of Rs. 125 billion (2012) across the petro-chemical & dairy food industry…
Subsidiary Revenue Profit
After Tax
Fertilizer 30.9 -2.9
Food 40.9 2.6
Polymer 19.7 0.0
EXIMP 11.7 2.0 Powergen 20.9 -0.4
Total 125.2 1.3
Financial Performance – 2011 (Rs. Billion)
1957
1965
1978
1991
1997
1999
2005
2010
2010
2010
2011
2012
Pak Stanvac, a 50:50 Esso-Mobil JV discovers Mari Gas Field in Upper Sindh
Esso Pakistan Fertilizer Co. Ltd is incorporated
Esso becomes Exxon
Exxon divests & employees lead MBO to form Engro Chemical Pakistan
Engro sets up chemical storage facility and forms Engro Vopak Terminal
Engro the first PVC manufacturing facility and forms Engro Asahi Polymer
Engro diversifies into Dairy and forms Engro Foods
Engro Foundation becomes the vehicle for all social spend
Engro Chemical becomes a holding company and renamed Engro Corporation
Engro Powergen builds 226MW power plant out of permeate gas
Engro Fertilizers builds the largest urea train plant in the world
Engro Corporation passes Rs. 100 Billion mark in revenue
Our History
Other 2.4 1.5
Mission : EF is committed to the sustainability of our businesses by
investing in our communities around our plants and in our business value chains 1) Livelihood & Skill Development 2) Education 2) Health 4) Community Physical Infrastructure
Engro Foundation (EF) is Engro’s platform for all social investments annually spending Engro Corp’s 1% Profit Before Tax
A Collaborative Approach: Our approach is based on a principle of
business inclusiveness where we work with funding and implementing partners who complement our resources and expertise into our social projects (eg. social mobilization, skills development, agri value chain etc).
Education
•Primary Education
•Secondary Education
•Technical Education
•Around 3Km around our plants
Health
• Preventive & Curative Health
CPI
•Community & Physical Infrastructure
• Solar Lighting
• Sanitation
Livelihoods
• Dairy Livestock Program
• Vocational (3-12 month)
• Technical Diploma (3 Year)
Our Thematic Areas : CSR Spend Rs. 114Mn (2012)
Engro’s Inclusive Business Framework
Value
CSR as Value Creation
Innovative and promotes sustainable business model
Fundamental strategic and operational impact
• Shared value (business and communities) • Promotes competitiveness and innovation • Integrates business into the community • Develops Human Capital • Incorporated into the Business Strategy
CSR as Risk Management
Compliance Medium to high strategic and operational impact
• Mitigates operational impact • Mitigates operational risks • Supports external relationships
CSR as Corporate
Philanthropy
Providing funding and skills
Little strategic and operational impact
• Sponsorships • Short term benefits • Limited funds available • Diluted impact as budget allocated to many • Corporate competencies not fully utilized • Misalignment- business and social responsibility strategies /
functions • Results in minimal social and business impact
Purpose Impact Benefits
Engro Foundation– Footprint
Across Pakistan…
Vocational Training
8
• District Ghotki, Upper Sindh • Ghotki is located 1.5 hours North-East of Sukkur
• There is a population of about 1 million people spread over an area of 6975 sq km
• Although it is an industrial heartland of 14 major Oil & Gas Companies, over 80% of the population is rural
• At the heart of an industrial cluster • Ghotki is at the heart of an industrial cluster which
contains 14 of the largest Oil & Gas companies in Pakistan, including Fauji Fertilizer, Mari Gas, Fatima Fertilizer and Engro Fertilizer/Power
• A survey conducted by the industry showed a demand for 200 Trade Apprentices per year from the Oil & Gas Sector
Ghotki
Approx. Population 1 million
Youth Segment (15-30 years) 35%
Rural Population Over 80%
14 Oil & Gas companies within a 50-60 km radius
Ghotki, Upper Sindh : High Unemployment and Unskilled Labor
Ghotki Statistics Percentage Population
Estimated PoP Size
% population 15-30 years 34% 340,000
Men Unemployed % 35% 350,000
At-home Women % 94% 940,000
Teachers/schools Ratio 2.6
Private/Govt. Jobs 23% 34,500
Skilled Labour 3% 4500
Daily Wage Labour 57% 85,500
Agri-Livestock 10% 15,000
Business/SMEs 7% 10,500
Note: Based on Engro Foundation Fall 2011 Survey
The following characteristics provide a ground for VoTech:
– The largest demographic segment of society is youth between the age of 15-30 years old
– Unemployment rates are extremely high
– A large majority of the working population is involved in daily wage labor which can be upgraded to semi-skilled levels
Rationale was to develop technical skills that could be linked with the industry towards a sustainable model
– 3-12 month vocational training
– 3 year accredited technical diploma
Poor Social Indicators in Ghotki but connected to Industrial Cluster
Features Details
Location Dharki, District Ghotki, Sindh Pakistan
Partners Pakistan Industrial Development Corporation, Engro Corp., Mari Gas Corp. Ltd (MGCL), Descon Engineering (DESCON), Saipem of Italy (SAIPEM) partnered to form PCESSDC (Pakistan Chemical & Energy Sector Skilled Development Company)
Courses Offered 3 year diploma : Chemical & Mechanical Engineering. Instrumentation 2012, Electrical 2013 & Computer Science 2014. 60 students enrolled. Curriculum subjects aligned with market and industry needs of the area
Current Enrollment 135 students (expected to cross 300 by 2015/6)
Facilities Expected: Hostel, internet facility, laboratory & library
Curriculum Accredited by the Sindh Technical Board & Guild UK by end of the academic year
A Vocational Training Center was set up in 2011 in partnership
What is PCESSDC?
Pakistan Chemical & Energy Sector Skills Development Company (PCESSDC)
is a non profit, private public partnership company (registered under section
42 of 1984) established in 2009
PCESSDC TTC was set up by PIDC (Rs. 100m), Engro Corporation (Rs. 44m),
Mari Petroleum Company (Rs. 30m), DESCON (Rs. 5m), Saipem (€250,000 in
kind) and STEVTA (Rs. 25m) later on joined by USAID (100 M for Hostel
Construction) & DEG of Germany (EUR 200,000.00) for Mechanical Lab
PCESSDC TTC currently offers 3-year diplomas in Mechanical and Chemical
Engineering and as a joint venture with STEVTA 3 – 6 months short courses for
vocational training
Mandate
Its mandate is to promote, facilitate and provide education and training
to a young and growing rural population in various disciplines of the
Chemical and Energy sector in Pakistan
PCESSDC focuses on the provision of employment to the young and
expanding rural population of Pakistan.
It aims to invest in the productivity of the rural community by filling the
education gap and equipping graduates with the manufacturing and
technical skills required to build a strong industrial economy.
Some Glimpses