Engro Group Pakistan
Engro Group Pakistan
Engro Group Pakistan
Engro Chemical Pakistan Limited is the second largest producer of Urea fertilizer
in Pakistan. The company was incorporated in 1965 and was formerly Exxon
Chemical Pakistan Limited until 1991, Exxon decided to divest its fertilizer business
on a global basis. The employees of then Exxon Chemical Pakistan Limited, in
partnership with leading international and local financial institutions bought out
Exxon’s 75% equity. This was at the time and perhaps still is the most successful
employee buy- out in the corporate history of Pakistan. Renamed as Engro Chemical
Pakistan Limited, the company has gone from strength to strength, reflected in its
consistent and enviable financial performance, growth of the core fertilizer business
and successful business diversification into our fields. Its performance & outlook is
following the declared vision, “To be the premier Pakistani enterprise with a
global reach, passionately pursuing value creation for all stake holders”
Engro has never been a company to rest on its laurels. Their employees and culture
drive them to achieve greater success. They look for new and exciting ways to return
value to their customers and their shareholders.
They said about their employees,” Our employee’s performance can only flourish in a
sound work environment. That is why Engro is committed to supporting it leadership
culture through systems and policies that foster open communication, maintain
employees and partner privacy, and assure employee’s health and safety. Engro
people are some of the best in the best in the world with a shared passion to learn and
stretch beyond their limits. It is our people who make Engro a great company and an
exciting place to work.”
The company shows a good financial performance in every field, the sales of the year
2007 were Rs.23.2 billion which is higher than 2006 by 32%. The profit after tax was
3.15 billion which is a new record of the company and higher by 24% over the 2006
profit of Rs 2.55 billion.
Infact Engro Chemical Pakistan Limited is going towards success and making
progress day and night. They really do what they said “Growing with Pride”
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Company Introduction
Engro Chemical Pakistan Limited is the second largest producer of Urea fertilizer
in Pakistan. The company was incorporated in 1965 and was formerly Exxon
Chemical Pakistan Limited until 1991, when Exxon decided to divest their fertilizer
business on a global basis and sold off its equity of 75% shares in our company. The
Employees of Engro, in partnership with leading international and local financial
institutions bought out Exxon’s equity and the company was renamed as Engro
Chemical Pakistan Limited. Engro is a public limited company listed on the Stock
Exchanges of Karachi, Lahore and Islamabad.
Engro accomplished significant progress not only in its base urea fertilizer business
but also in diversification projects. Urea production was increased from an annual
capacity of 270,000 tons in 1991 to 850,000 tons in 2001. Further expansion plans are
being developed to debottleneck plant capacity to 1.2 million tons in stages. In
addition, Engro has over thirty years of experience of fertilizer marketing in Pakistan
with an elaborate dealer network.
As part of our growth and diversification plans, we have established a $60 million
50:50 Joint Venture company named “Engro Vopak Terminal Limited” in 1995,
between Engro and Royal Vopak (formerly Royal Pakhoed), a Netherland based
company and one of the foremost terminal operators in the world. This joint venture
company has built a modern Jetty & Terminal at Port Qasim, Karachi for handling and
storage of bulk liquid chemicals, which was completed in 1997. This is a key
infrastructure for the development of capital intensive chemical industry in the heavy
industrial zone of Port Qasim, Karachi.
Engro has also formed another Joint Venture company with Mitsubishi and Asahi
Glass of Japan named “Engro Asahi Polymer & Chemicals Ltd.” to develop a
Polyvinyl Chloride (PVC) resin project at Port Qasim, Karachi, with an initial
capacity of 100,000 tons per year based on imported Vinyl Chloride Monomer. The
project has been successfully completed and commenced production in November
1999. The plant production is being marketed both in domestic and export market
under the brand name SABZ. Engro has 50% equity in this $74 million venture.
Construction of Engro’s 100,000 tons p.a. capacity NPK fertilizers plant at Port
Qasim at a cost of US $10 million was completed in 2001. The plant is in production
and considerably benefiting the country’s agriculture by providing balance nutrition to
improve farm yields. During the year 2004 the product’s generic name of NPK was
replaced by Zarkhez.
In April 2003 Engro acquired 51% intrest in the Automation & Control Division of
Innovative (Private) Limited, a Lahore (Pakistan) based company that provides
process control industrial solutions in the knowledge based services sector. The joint
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venture has been named as "Innovative Automation & Engineering (Private)
Limited (IAEL)".The aquisition was part of Engro’s diversification strategy.
Our Seeds business completed four years of operations and during this period, the
Company has made significant progress in developing its own hybrid seeds of maize
and sunflower crops and launched two new maize hybrids of imported origin. All seed
products are being marketed under the brand name of Bemisal.
Engro has announced plans to set up a milk processing facility to produce and market
branded UHT milk, cream and other milk products. The plant to be located in Sukkur
is expected to cost Rs 1 billion and will be completed by March end 2006. All major
equipment is on order and civil construction is expected to commence soon. Engro
plans to procure raw milk supplies from Sindh and lower Punjab
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Mission Statement
۞ To help farmers maximize their farm produce by providing quality plant nutrients
and technical services upon which they can depend.
۞To create wealth by building new businesses based on company and country
strengths in Petrochemicals, Information Technology, Infrastructure and other
Agricultural sectors.
In pursuing the mission we shall at all times be guided in our conduct and decision
making by our Core Values.
Our Vision
To be the premier Pakistani enterprise with a global reach, passionately pursuing
value creation for all stake holders
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Values that we live
by
Core Values
Our employee’s performance can only flourish in a sound work environment. That is
why Engro is committed to supporting it leadership culture through systems and
policies that foster open communication, maintain employees and partner privacy, and
assure employee’s health and safety.
LEADERSHIP
We have leaders of high integrity, energy and enthusiasm who have the necessary
managerial, professional and people skills to inspire a group or an organization to set
high goals and achieve them willingly. We believe that leadership skills need to be
strengthened at all levels within our organization and that managerial and professional
impatience is a necessary foundation.
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QUALITY & CONITNUOUSE IMPROVEMENT
We believe that quality and a relentless commitment to continuous improvement are
essential to our ongoing success. To this end, we define quality as understanding the
customer's expectations, agreeing on performance and value, and providing products
and services that meet expectations 100 percent of the time. Our motto is, "Quality in
all we do."
INNOVATION
Success requires us to continually strive to produce break through ideas that result in
improved solutions and services to customers. We encourage challenges to the status
quo and seek organizational environments in which ideas are generated, nurtured and
developed.
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We strongly believe in the dignity and value of people. We must consistently treat
each other with respect and strive to create an organizational environment in which
individuals are encouraged and empowered to contribute, grow and develop
themselves and help to develop each other.
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Board of Directors
Hussain Dawood
Chairman
Asad Umar
Chief Executive
Arshad Nasar
Director
Is currently the Chairman and Chief Executive Officer of Oil & Gas
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Development Company Limited. He holds a Masters degree in
Economics as well as Political Science. He joined ECPL Board in 2002.
Asif Qadir
Director
Isar Ahmad
Director
Khalid Mansoor
Director
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Khalid Siraj Subhani
Director
Ruhail Mohammed
Director
Shahzada Dawood
Director
Shabbir Hashmi
Director
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Hierarchy Structure
President
Company
Secretary
Compensation
and Benefits Accounting Sales Production
Planning
Recruitment and Maintenanc
Treasury es
Developme
nt
Instrumental
Purchasing / Fleet
Administrati
Legal on
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PRODUCT PORTFOLIO
• Fertilizers
Nitrogenous Fertilizers
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Compound Fertilizers
Phosphatic Fertilizers
Engro Urea
Engro DAP
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Engro DAP contains 46% P2O5 and 18% N. More
than 90% of P is water soluble. It has a pH value of
7.33 and is a good source of P fertilizer for all crops.
It is an equally good source on problem soils (saline
sodic) with coarse texture. On an overall basis it suits
to about 90% soils of the country.
Engro Zorawar
Engro Zarkhez
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• Chemical Handling & Storage
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Developing Pakistan's First
Cyrogenic Storage Facility
• PVC Resin
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Expansion and
backward integration
Applications
Rigid PVC sheet, PVC bottles, injection moulded PVC products like non-pressure
PVC pipe fittings and conduit fittings, rigid PVC extruded film and sheet.
Applications
Rigid PVC sheet, PVC bottles, injection moulded PVC fittings for pressure
application, rigid PVC extruded film and sheet, PVC welding rods.
Applications
PVC shoes, sandals and soles (expanded and compact), PVC film, sheet and artificial
leather, PVC cables, PVC garden hose and tubes with reinforcements, tubular film
and tubing, PVC flooring and tiles, PVC water stops / expansion joints and plasticized
PVC compounds.
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4. SABZ PVC AU-67R
AU-67R is a medium molecular weight suspension resin. It has a narrow range of
particle size distribution, high bulk density, and excellent dry-flow properties. This
results into a high and uniform production rate in the extrusion process. This grade
has been specially designed, and is recommended for rigid PVC applications.
Applications
Rigid PVC pipes, conduits and ducting,, PVC profiles such as doors, windows and
other sections, PVC corrugated pipes, PVC shrinkable film and also twist wrap candy
film, rigid PVC compounds for extrusion.
Applications
PVC cables, flexible calendared PVC film, sheet and leather, flexible PVC extrusion
and injection moulded products.
• Power Generation
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Our 217 MW Power Plant.
• Industrial Automation
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Providing process control
solutions to your industrial units
• Food
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Foods by Engro Foods Limited
Olwell HCLF: (High Calcium, Low Fat) Olwell is a premium quality milk for the
health conscience.
Communication Network
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An understanding of managerial communication isn’t possible without looking at the
fundamentals of organizational communication. Communication within an
organization is often described as formal or informal.
Formal Communication:
Communication that follows the official chain of command or is required to do one’s
job.
Informal Communication:
Communication that is not defined by the organization’s structural hierarchy.
Communication Network:
The vertical and horizontal flows of organizational communication can be combined
into a variety of patterns called communication networks.
As a manager, which network should you use? The answer depends on your goal. No
single network is best for situations. If you’re concerned with high member
satisfaction, the all channel network is best; if having a strong and identifiable leader
is important, the wheel facilitates this; and if accuracy is most important, the chain
and wheel networks works best.
In Engro Pakistan all channel network is working because they think that employees
are our most important asset of our organization. All the company policies and
information is shared with the employee that’s why they are going to progress. Engro
Pakistan is one of the leading organizations in Pakistan and has a good
communication network within the organization as well as outside the organization.
They are always in touch with employees and shareholders for the betterment of
organization. From better communication network there logo “Growing with Pride”
is fully understandable.
They also communicate with the farmers for better production of crops. More than 10
lines are answering the phone calls. Infact Engro has a very good communication
network so this is also a reason for their success.
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All Channel Communication Network
As we see in the diagram that no single person have the authority to make a decision.
In All Channel Network all the members have equal power to give decision in
decision making. In this channel information goes to all employees quickly and have
high member satisfaction but the drawback of this channel is that no urgent decision
are made, it consume a lot of time to make a decision.
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Management Functions
Before explaining four functions of management, we would like to define that what
management.
Simply speaking, management is what managers do. But that simple statement doesn’t
tell us much does it? A better explanation is that management involves coordinating
and overseeing the work activities of others so that their activities are completed
efficiently and effectively.
1. Planning:
In Planning managers engage in planning, they define goals, establish strategies for
achieving those goals and develop plans to integrate and coordinate activities.
In Engro Pakistan all the mangers are involve in planning function. The chairman
with the help of all the directors set some long term as well as short term goals, and
then the directors and manager make the strategies to accomplish such goals.
2. Organizing:
Managers are also responsible for arranging and structuring work to accomplish the
organization’s goal. This is known as organizing. When mangers organize, they
determine what tasks are to be done, who is to to do them, how the tasks are to be
grouped, who reports to whom, and where decisions are to be made.
In organizing managers at Engro allocate and arrange human and non-human
resources so that their plan can be carried out successfully. Like it allocate the
machinery and advanced technology in production unit that must be a relating to
accomplish our goals.
3. Leading:
Every organization includes people, and manger’s job is to work with and through
people to accomplish organizational goals. This is leading function. When mangers
motivate subordinates, help resolve work group conflicts, influence individuals or
team as they work, select the most effective communication channel, or deal in any
way with employees behavior issues, they are leading.
Managers at Engro influence others work behavior. Labours and subordinates to get
optimum task achievement even by satisfying them accordingly.
4. Controlling:
The final management function is controlling. After the goals and plans are set
(Planning), the tasks and structured arrangements determined (Organizing), and the
people hired, trained and motivated (Leading), there has to be some evaluation of
whether things are going as planned. To ensure that goals are being met and that work
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is being completed as it should be, Engro’s manager regulates organizational
activities so that actual performance conforms to expected organizational standards
and goals e.g. Engro’s goal is to help farmers maximize their farm produce by
providing quality plant nutrients and technical services upon which they can depend,
the mangers must monitor and evaluate performance. Actual performance must be
compared with the previously set goals. If there are significant deviations, it’s
management’s job to get work performance back on track.
a)Interpersonal Roles
Figurehead at Engro performs symbolic duties of a legal and social nature. They
are Board of Directors, Chief Executives, and Financial Managers etc.
Liaison maintains network of contacts outside work unit who provides help and
information to other organizations and build good relation for Engro Sales
Promotion.
b)Informational Role
Monitor at Engro seeks internal and external information about issues affecting
organization.
c)Decisional Role
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Resource Allocator in Engro distributes resources of all types including time,
funding, equipment and human resources so that services with in the organization
and out side the organization should be manage in proper order to get maximum
output from given resources and material.
Negotiator at Engro represents the organization in major negotiation affecting the
manager’s area of responsibility means negotiator talk to external affecting factors
to maintain and improve the Engro’s alacrity.
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Challenges and Issue Faced
In the year 2008, Engro’s focus will be on flawless implementation of the significant
growth initiatives in al businesses, viz., fertilizer, food, energy, chlor-vinyls, chemical
storage and industrial automation. Engro has also put in place plans to continue to
source and retain quality people to sustain its growth ambitions.
The Board would like to take the opportunity to express its appreciation to the dealers,
customers and employees for their dedication throughout the year. The Board also
acknowledges the support and corporation received from the Government, Joint
Venture, Partners, Bankers, Suppliers, Contractors and other Stakeholders.
These are the following challenges and issues faced by the organization at starting:
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currently operating at 80% of its design capacity and some reductions in operating
expense have been achieved.
Loss of Production
ECPL’s urea production during the year was down by 2% to 790k tons on account of
certain production issues which were significantly smoothened towards the end of the
year.
Competitive Strategies
Before formulation an effective strategy for getting competitive edge, the manger
must conduct competitive analysis. This involves assessing both environmental and
organizational factors influencing ability to compete effectively.
This competitive situation could be find out with help of SWOT analysis:
Strengths
Weakness
Opportunities
Threats
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• Dumping of imported fertilizer in the local market. Government action is often
protracted. During 1999, ex-Soviet states dumped huge quantities of urea in
Pakistan. Even though the government imposed 10% regulatory duty, it was
too little and too late to be effective.
• Takeover by the Burewala Group. The takeover attempts may subside,
however the management of Engro Chemicals may become too drawn into this
battle while it continues, causing reduced focus on operations.
• Droughts directly affect demand. Engro urea sells primarily in southern part of
the country where the droughts are more frequent.
When we talk about our competitor in the market, our main competitor is FFC.
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. FFC-Jordan Fertilizer Company Limited is a joint venture between
FFC and Jordan Phosphate Mines Co. Jordan.
Through De Bottle Necking (DBN) program the production capacity of the existing
plant increased to 695,000 metric tons per year.
Production capacity was enhanced by establishing a second plant in 1993 with annual
capacity of 635,000 metric tons of urea.
Fauji Fertilizer Company currently has 1,769 employees. With sales of 16.79 billion
Pakistan
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The following tables provide a comparison of operating performance of ECPL with its
closest competitor and market leader - Fauji Fertilizer Company:
Government policies
In Mar ’02, the Govt. imposed 15% GST on selling price of urea (PKR 6,660/ton)
with the entire impact allowed to be passed on to the customer. In response to the
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above, prices in fact, have increased by 5.7% since March which is considered
sufficient to protect margins.
Given the decline in domestic fertilizer off-take, the Govt. has allowed export of
0.23m tons of urea in order to reduce inventories. However, exports at current prices
are not a viable option. The local urea ex-factory price in FOB terms currently stands
at US$ 120/ton. Add US$6-8 for local transportation to port and another US$20
freight to Middle East. Thus, US$146-148/ton international price would be required to
make exports viable. However, Middle East bagged prices currently stand at US$ 112-
115/ton.
To date, the fertilizer industry in Pakistan has been subject to preferential treatment in
the form of subsidized gas prices. However, in line with IMF conditionality aimed at
de-regulation, the Fertilizer Policy announced in Aug-01 envisages a gradual
withdrawal of subsidy offered to the industry
Suppliers
Mari Gas Company is the sole gas supplier to ECPL, with the latter having a total gas
allocation of 103 MSCFD. Payments to Mari Gas are made on a fortnightly basis.
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In the fertilizer industry of Pakistan there is comparison
between the rivals in prices. But as Engro Pakistan is
not an autonomous body in manufacturing their products
so they face encounter bargaining power of suppliers.
Culture
Organizational Culture:
The shared values, principles, traditions and ways of doing things that influence the
way organizational members act.
Our people and our culture drive us to achieve greater success. We look for new and
exciting ways to return values to our customers and our shareholders.
1. Our People.
2. Quality and Training.
1. Our People:
More than 700 employees bring expertise and dedication to the workplace. We value
each employee, value their inputs and view. Continuously striving to become
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employer of choice, we provide a workplace where people feel confident, valued and
inspired.
Improvisation
through Six Sigma:
the legend leads
again
Engro is among the first Pakistani companies implementing six sigma across all areas
and utilizing it as a management system to execute its strategic objectives. Among the
focus areas, employee development is the most critical and six sigma is leveraged to
help bring out the best in our people. Employees will drive improvements in other
areas; speed, innovation, perfection and in becoming world class professionals.
Six Sigma’s robust problem solving methodology and statistical toolkit allows the
company to benchmark processes against global standards in a language that is
comparable across any industry or function. It helps ensure that Engro sustains its
promise of delivering high quality products and services to its customers – on time,
every time.
The learning does not stop here. The Company has a range of additional training
programs, both core management and technical, which are used on a regular basis to
develop skills and knowledge. In addition, specific one-off programs may be
developed on a need basis. Alternatively, individuals may attend externally run
programs and there may be cases where learning by planned job experience is the best
answer. Employees contributions to assessing their own training needs are welcomed
as are the suggestions for suitable programs.
• Stories Engro is best known for its quality and diversification. The customers
are satisfied from products. It is our people who make Engro a great company.
• Rituals In Engro all the employees are fully dedicate to their workplace and
our tradition is diversification and our core values.
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• Symbols Engro symbols motivate the employees which is “ Growing with
Pride”
• Language In Engro mostly that language is used which is easily
understandable by the employees, so the employees easily understand the
culture of the organization.
Any constituencies in the organization external environment that are affected by the
organization decision and actions.
• Employees 1664
• Contract Employees 3005
• Customers 68,000
• Consumers 3,100,000
• Vendors 3500
• Shareholders 11,365
• Dairy Formers 51,000
• Students 4300
• Patients 32,500
• Total Lives Touched 3,275,334
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Highlights of Year 2007
1. Sales for the year were Rs. 23.3 billion, higher by 32% due mainly to higher
turn over of Phosphates and Zarkhez.
2. Profit before tax at Rs. 4.2 billion was 23% higher than 2006 principally
because of higher other income from joint ventures and subsidiaries.
3. Profit after tax was 3.15 billion which is a new record of the company and is
higher by 24% over the 2006 profit of Rs. 2.55 billion.
Engro has never been a company to rest on its laurels. Our people and our culture
derive us to achieve greater success. We look for new and exciting ways to return
value to our customers and our shareholders. It’s tough and demanding but also fun
and always interesting. You will have opportunity to succeed – as an individual and as
part of a team.
Our business gives you flexibility for change the opportunity to learn about new
markets and provides unparalleled career options. Engro people are some of the best
in the world with shared passion to learn and stretch beyond their limits.
It is our people who make Engro a great company and an exciting place to work.
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Engro Chemical Pakistan has gone strength to strength, reflected in its consistent
and enviable financial performance, growth of the core fertilizer business
diversification into our fields. Its performance & outlook is following the declared
vision, “To be the premier Pakistani enterprise with a global reach, passionately
pursuing value creation for all stake holders”
Conclusion:
In the conclusion section we first say that Engro is doing good business. If investors
feel that Pakistan is not a good place to invest they look at the success of the Engro
Pakistan, how they are doing business in that situation when there is economic crisis,
bad position of the stock exchange.
Engro Chemical Pakistan Limited is the first company in history of chemical industry
who makes fertilizers as well as food products together. First they only manufactured
fertilizers only but they diverse their business into many fields like, Engro Vopak
Terminal Limited, Engro Polymer & Chemical Limited, Engro Energy Limited, Engro
Innovative Automation Pvt. Limited, and Engro Foods Limited.
The culture of the company is very outstanding. The culture is maintained in such a
way that more values returns to their customers and shareholders. More than 700
employees bring expertise and dedication to the workplace.
The management of the organization is very professional and they are ready to
compete all the challenges. The company financial performance is very good and
continusely increased. Infact Engro Chemical Pakistan Limited is growing by leaps
and bound and they prove that what they say,” Growing with Pride”
References:
For this project we visit the website of the company and collect data and also we visit
Engro North Zone to collect information about the management. These are the
following references from where we gather information.
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• www.engro.com,pk
• www.engrozarari.com
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