ELECTION OF DIRECTORS
Urea plants suffer Rs 5.5bn loss
2nd July, 2012: In the first half of 2012, all SNGPL-based plants, including Agritech, DH Fertilizers, Pakarab and Engro (new plant), faced a collective loss of Rs 5.5 billion in terms of revenue as their total sales of urea stood at 150,000 tons as against 316, 000 tons in the first half of last year. In a statement, the fertilizer industry stated that 52 per cent decline in terms of sale translates itself in a revenue loss of Rs 5.5 billion. The total urea production by SNGPL based plants in the first half of 2011 stood at 297,000 tons which declined by 33 per cent (or 198,000 tons) till June this year. The plants operated at 18 per cent of their capacity during these six months against 25 per cent last year. During the first half, they faced an estimated gas curtailment of 82 per cent in which Agritech and Pak Arab got gas for 63 days each while Engro Enven and DH Fertilizers got gas for 33 days in the first six months of 2012. In the first quarter of this year, all SNGPL-based and SSGC-based plants faced a loss of revenue by 53 per cent compared with first quarter of 2011, generating Rs 8.16 billion revenue in the first quarter as compared to last years’ Rs 17.29 billion. In 2012, four plants based on SNGPL as well as SSGC based FFBL lost profitability by 125 per cent and made a collective loss of Rs 1.076 billion whereas the same plants had made profit of Rs 4.3 billion in the first quarter of 2011. The SNGPL-based plants are facing crisis as 82 per cent gas curtailment was never witnessed before 2012. Despite making an investment of $2.3 billion in the last four years on new production capacity, making Pakistan world’s seventh largest urea manufacturer, there is an idle urea capacity of over three million tons. Fertilizer sector officials said that if same gas curtailment continues during the remaining five months of 2012, the SNGPL-based fertilizer plants would be forced to shut down permanently.