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Group Members

Tania Munir Baig

Arsalan Khan

Ahmed Safwan Hassan Aslam


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Introduction to theCompany:

Fauji Fertilizer Company Limited (FFC) isthe largest fertilizer producer in Pakistanwith around 60% urea market share in the

country. FFC was established in 1978 as ajoint venture between Fauji Foundation,

Pakistan and Haldor Topsoe A/S, Denmark.

The first ammonia - urea complex was

commissioned in 1982.

De-bottlenecking of Plant-1 in 1992,establishment of a 2nd plant in 1993 and

acquisition of a 3rd plant is 2002. FFC now


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Fauji Fertilizer Bin Qasim Limited, Karachi,Pakistan (FFBL) is another company whereFFC has controlling shares it produces 1670MTPD of granular urea plus 1350 MTPD DAP.

Today, FFC is also emerging as a player in thespheres of manpower training and turnaroundservices provider, especially within Pakistan

and in the Middle East.


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They have experience of more than 21maintenance turnarounds and 23 million manhours of safe operation. We also offerturnaround inspection services including NDT,machinery diagnostics, infraredthermography etc.


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Company Profile:

FFC was incorporated in 1978 as a privatelimited company. This was a joint venturebetween Fauji Foundation (a leadingcharitable trust in Pakistan) and Haldor

Topsoe A/S of Denmark.

Initial share capital of the company: 813.9Million Rs.

Present share capital of the company : AboveRs. 8.48 Billion.

Additionally, FFC has more than Rs. 8.3 Billion

as long term investments which includestakes in the subsidiaries FFBL, FFCEL and


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Commencement of commercial production ofurea in 1982 with annual capacity of 570,000

metric tons.

The production capacity of the existing plantincreased to 695,000 metric tons per year.

Production capacity was enhanced byestablishing a second plant in 1993 withannual capacity of 635,000 metric tons ofurea.


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Products:

1)Sona Urea

2) DAP

3) FFC SOP 4) Sona Boron


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Services:

Fauji Fertilizer Company Limited servicesare now available for the Chemical ProcessIndustry due to its dedicated team of

engineering specialists with richexperience.

FFC has been providing AgriculturalAdvisory Services to the farmingcommunity throughout Pakistan since1981, for increasing the agriculture

production in general and the farmers


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Vision:

In a nation of increasing population, webelieve there is substantial opportunity ofgrowth for FFC in the years to come.

FFC's vision is to play a leading role in theindustrial and agricultural advancement ofthe country pursuing new growthopportunities offering the convenience of

multiple products, brands and channelswithin and beyond the territorial limits ofPakistan, to the benefit of our customersand our shareholders, elevating our imageas a socially responsible and ethical


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Mission:

Our mission is to stand above thecompetition and provide our customerswith premium quality fertilizer products in

a safe, reliable, efficient andenvironmentally sound manner, deliverexceptional services and unparalleledcustomer support, produce predictable

earnings for our shareholders, and providea dynamic and challenging environmentfor our employees.


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Ratios:

1.Gross profit to sales

Gross profit/sales *100

2010: 19,563,953/44,874,359*100

(Rupees 000)

= 43.59%

2011: 34,349,409/55,221,168*100


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Interpretation:

The gross profit to sales ratio showsthe profit made by every rupee ofsale as a percentage. The percentage

in 2010 was 43.59% which was18.64% less than in 2011.Thisincrease was caused by the increase

of the gross profit which could be dueto a decrease in cost of sales alsothis increase would have caused dueto the increase in sales which is alsoevident


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. ross pro o cos osales

Gross profit/cost of sales *100

2010: 19,563,953/25,310,406(Rupees 000)

=77.29%

2011: 34,349,409/20,871,759 *100

= 164.57%


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Interpretation:

This ratio shows the percentage ofprofit in terms of cost of sales. Thisratio drastically increased in 2011to

162.57% from 77.29% in 2010. Thismight be due to a decrease in cost ofsales and also a great increase in

gross profit showing goodperformance of the company in ayears time.


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3. Gross profit per unit :

Total gross profit/number of unitssold

Total gross profit/number of unitssold

2010: 19,563,953/ : Rs.724.6/unit

2011: 34,349,409/


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This is the ratio that tells us the profitthat we are going to be calculatingand receiving from the sale of any

one unit of our product. We haveseen that due to the price hike, andbecause the profit margin has

increased, the profit is more than itwas previous year.


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4. Inventory turnover

Cost of goods sold/average inventory

Average inventory = openingbalance inventory + closinginventory/2

2010: 25,310,406/211,720(Rupees 000)

=119.54 times

2011: 20,871,759/ 636,923


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Interpretation:

The inventory turnover ratio tells usthe number of times the averageinventory pays off our cost of sales.

In this case the ratio decreaseddrastically in 2011. This can be dueto the increase in average inventory

held which decreased the number oftimes of the payment

n en or urno er n


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. nven ory urnover ndays:

(Inventory*days)/Cost of Goods Sold

2010: 423440*365/25,310,406 : 6.106 approx 6 days

2011: 1273846*365/20,871,759

: 22.27 approx 22 days


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Interpretation:

The degression in the days that it takes toconvert the inventory from the rawmaterial to the finished product is

basically because of the fact that thecompany is now taking more time makingthe product. This could be due to the factthat the company is overhauling the

production line and also making sure thatthe product that you are creating is up tothe mark so that quality should bemaintained while losses can also be cut.


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6. Income to sales ratio:

Net Income / sales * 100

2010: 11028849/44874359 *100 : 0.2455 * 100 : 24.57

2011: 22492053/55221168 *100

: 0.40730 * 100 : 40.73


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Interpretation:

This ratio basically tells us about thepercentage of income that wegenerate from every 100$ of sales

that we make, basically this ratio isused to gauge the performance ofthe company and how efficiently it

manages it resources. This ratio alsotells us about the profitability of thecompany


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7. Income/unit cost:

Net Income / No. of units sold

Net Income

No. of Units Sold

2010: 11028849/27000:

Rs.408.47/ unit

2011: 22492053/24893

:Rs.503.55/ unit


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Interpretation

This ration basically tells us aboutthe portion of the income that is kept

in every unit cost. We see that theincome in the unit cost has increasedover the period of one year, thismeans that the company is keeping a

greater profit margin.

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