The Fertilizer Sector in Pakistan

CHAPTER 1

INTRODUCTION TO STUDY

1.1 Background

Agriculture is the largest sector of Pakistan's economy employing approximately half of its labor force and producing one quarter of its GDP. Fertilizer is a kingpin in enhancing crop production. Fertilizer production is concentrated in nitrogenous fertilizers, which comprise 85% of all fertilizers produced in the country. Although other types of fertilizers are also produced in Pakistan, the bulk of whose demand is imported. The main reason for this concentration on nitrogenous fertilizers is that its main raw materials i.e. natural gas is cheaply available in the country. The raw material for other fertilizers such as potassium and phosphate has to be imported.

The fertilizer sector in Pakistan currently comprises of 10 companies 4 of which are in the public sector (Hazara Phosphate Fertilizer (Pvt) Limited, Lyallpur Chemical & Fertilizer Limited, Pak Arab Fertilizer Limited, and Pak American Fertilizers Limited) while 6 are in the private sector (Engro Chemicals Pakistan Limited, Dawood Hercules Chemicals Limited, Fauji Fertilizer Company Limited and FFC-Jordan Fertilizer Company Limited, Pak China Fertilizer and Pak Saudi Fertilizer Company Limited -- now owned by FFC).

With a vision to acquire self - sufficiency in fertilizer production in the country, FFC was incorporated in 1978 as a private limited company. This was a joint venture between Fauji Foundation (a leading charitable trust in Pakistan) and Haldor Topsoe A/S of Denmark. The primary purpose of my study is to understand the peculiar nature of The Fauji Fertilizer Company Limited. The problems faced by this organization and the possible remedial actions, as my study is to find all the facts upon, which analysis of the organization is to be based.

For getting the master degree in business administration, each student is required to spend at least two months as an internee in a recognized organization. The students are required to work in their own field in which they have done their specialization.

1.2 Purpose of the Study

Main purpose of this program is to make students familiar with the practical work, as there is great difference between what they have learnt during their MBA and how the job is practically done.

The primary purpose of this internship report is to gather relevant information to compile internship report on Fauji Fertilizers Company Limited. Along with this, the second basic purpose was to work in an organization and to compare the theory and application of management knowledge in real life situation. Another, purpose was to improve personal skills i.e. human relations and communication skills. Similarly, the report's purpose was also to develop analytical skills by analyzing the working of the organization through critical and SWOT analysis. At the end, some suggestions are also given for the improvement of situation.

1.3 Scope of Work

The internship of eight weeks is not a long time for understanding the overall organization's functioning. However, main emphasis of this study is on the working of Fauji Fertilizers Company Limited in the Head Quarter. The functioning of this division was well observed during this period and can be considered as an overview of the working of FFC. Still these observations can be extended towards the overall working