Fertiliser plants faced 89pc output loss in 2012

Pakistan’s fertiliser sector faced yet another year of dismal performance due to unprecedented cut in gas supply, said the Fertiliser Manufacturers Pakistan Advisory Council (FMPAC). Fertiliser plants in the northern region lost production by 89 percent in the year 2012. Of the total production capacity of over 2.2 million tons, Sui Northern Gas Pipelines Limited (SNGPL)-based fertiliser plants produced only 256,500 tons of urea in 2012, which is the lowest ever production by fertiliser plants in the sector’s history. Producing only 11.6 percent of the total urea production capacity of SNGPL-based fertiliser plants shows the worst ever gas curtailment being faced by fertiliser plants in the country, said a FMPAC spokesman. The country’s total urea production figures are also dismal as the whole fertiliser sector on SNGPL as well as Mari network produced 4.1 million tons of urea against 4.8 million tons produced last year, as compared with an installed capacity of 6.9 million tons. This shows the overall production loss of 2.8 million tons in a year, which has never been witnessed before. Currently, all four fertiliser plants on the SNGPL network are facing a complete shutdown, which has resulted in severe production and financial losses for the sector. Four fertiliser plants on the SNGPL network, including Pakarab, Dawood Hercules, Engro’s new plant and Agritech, remained the main victims of the chaotic gas situation in the country. The worst years for the fertiliser sector have been 2011 and 2012 as instead of providing gas to fertiliser plants to produce economical urea domestically, the government preferred to import Urea by spending over $1 billion from the foreign exchange reserves. The spokesman said that the fertiliser sector has been witnessing a steep production decline as it produced five million tons of urea in 2009 against a capacity of five million, 5.15 million tons against a capacity of 5.6 million tons in 2010, 4.9 million tons against 6.9 million tons capacity in 2011 and 4.1 million tons against a capacity of 6.9 million tons in 2012. He said that there is a misconception that fertiliser manufacturers enjoy raw material subsidy from the government in shape of reduced feed gas prices.