Shams ul Nisa

The Fauji Fertilizer Company Limited is set for strong growth, backed by rising urea market share and expected fertilizer market deregulation, reports WealthPK. As a key player in fertilizer supply, the company’s increased output and efficiency are expected to support national food security, improve crop pricing, boost rural incomes through better farm productivity, and enhance contributions to tax revenues and exports.

FFC has reiterated its call for swift deregulation of the fertilizer sector, emphasizing the need for market-based pricing following the removal of wheat support prices. The company’s leadership views structured deregulation as vital to attracting investment, fostering innovation, and aligning local production with international standards, while ensuring farmer protection and sector efficiency.

Moreover, liberalizing the fertilizer market holds strong potential for economic growth by opening avenues for plant upgrades, new projects, and foreign investment. For Pakistan, such reforms could ease the government’s subsidy burden, boost agricultural productivity, and support the development of a self-reliant and competitive agro-industrial sector.

FFC delivered strong 1QCY25, with turnover rising 9% to Rs63.6 billion and gross profit increasing over 31% to Rs22.65 billion, driven by greater operational efficiency. FFC disbursed Rs29.88 billion in dividends for 2024 and proposed an additional interim dividend of Rs7 per share following the quarter’s close. Despite industry-wide decline in fertilizer sales driven by poor farm economics and drought, FFC demonstrated effective execution.

Its Urea offtake dropped by just 26%, compared to a 40% industry decline, boosting its market share to 49% from 45%. This growth was supported by strong sales strategies, inventory levels that represent only 16% of sector stock, and steady supply from its Goth Machhi and Port Qasim plants. In the Diammonium Phosphate (DAP) segment, FFC further strengthened its lead with a commanding 63% market share.

As a result, FFC’s growing market presence not only boosts its own revenues but also brings broader benefits to the agricultural sector. FFC ensures consistent fertilizer supply to key food-producing areas, sets high standards for product quality and distribution, and drives overall industry improvement through healthy competition.

Additionally, FFC is reinforcing its growth strategy with over Rs23.5 billion in ongoing and planned capital expenditures focused on asset expansion, plant upgrades, and new initiatives aligned with market demands. FFC is strategically positioned to lead Pakistan’s agricultural and economic transformation by capitalizing on deregulation, operational efficiency, and market growth.

The company is set to play a vital role in strengthening rural livelihoods, ensuring food security, and advancing industrial development, firmly establishing itself as a key player in the country’s economic revival with a clear focus on innovation, strong governance, and diversification.

Credit: INP-WealthPk