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Agritech Limited (AGL) is focusing on crop expansion and significant plant upgrades, positioning itself to boost agricultural productivity and contribute to Pakistan’s broader economic recovery in the months ahead, reports WealthPk. Therefore, a central element of AGL’s growth strategy is the ongoing modernization of its urea plant in Iskanderabad and Single Super Phosphate (SSP) facility at Hattar Road.

These upgrades are designed to improve operational efficiency, reduce downtime, and enhance product quality. Moreover, scheduled maintenance shutdowns are expected to deliver long-term gains by boosting plant reliability and output in future quarters.

The company is also investing in new equipment and process enhancements to optimize capacity ahead of the Kharif crop season, when demand is projected to rise. Additionally, the upgrades emphasize energy efficiency and environmental compliance, aligning AGL with international standards and regulatory expectations.

Additionally, AGL’s growth efforts are set to deliver broader economic benefits by strengthening food security, creating jobs through plant upgrades and supply chain activities, and opening potential export avenues as production efficiency rises. The company’s inclusion in the KSE-100 Index in April 2025 further highlights its growing role in the national economy and increasing investor confidence.

Agritech Limited is actively working to strengthen its financial foundation and enhance shareholder value. The company is converting Rs148.43 million preference shares held by key investors, including Fauji Fertilizer Limited and Maple Leaf Cement, into ordinary shares, a move aimed at improving its capital structure and boosting share liquidity.

The company maintained a strong operational cash flow of Rs1.13 billion in the first quarter of 2025, reflecting disciplined financial management despite recording operating losses. Pakistan's fertilizer sector faced challenges in 1QCY25, with a 9% decrease in urea production and a 40% drop in urea offtake due to reduced wheat cultivation and weak farm profitability, while demand for phosphate fertilizers fell by 44% and 62%. Despite these challenges, AGL produced 67 k tons of urea and sold 89 k tons.

In the Single Super Phosphate segment, AGL produced 17 k tons and sold 6 k tons, maintaining a steady performance amid a contracting market. AGL’s 1QCY25 financial performance reflects the broader pressures facing the fertilizer industry. As net sales declined to Rs7.54 billion, operating profit dropped to Rs724 million from Rs1.6 billion. The company posted a net loss of Rs238 million, compared to a net loss of Rs173 million in the same period last year.

The downturn in revenue and profitability was primarily due to lower sales of urea and phosphate fertilizers. Despite this, AGL’s management remains confident, supported by a solid asset base, sound financial discipline, and ongoing investments in plant expansion and modernization. AGL’s leadership remains optimistic as plant upgrades near completion and fertilizer demand is expected to rise with the Kharif season.

The company anticipates a strong rebound in sales and profitability in the coming months. They plan to maintain their competitive edge through ongoing innovation, process improvements, and a focus on energy efficiency and environmental compliance. Therefore, the company is set to play a key role in strengthening food security, driving rural development, and advancing industrial progress in Pakistan.

Credit: INP-WealthPk