Strategies Engro Group Pakistan

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Executive Summary

Engro Chemical Pakistan Limited is the second largest producer of Urea fertilizerin Pakistan. The company was incorporated in 1965 and was formerly Exxon

Chemical Pakistan Limited until 1991, Exxon decided to divest its fertilizer businesson a global basis. The employees of then Exxon Chemical Pakistan Limited, in

partnership with leading international and local financial institutions bought outExxons 75% equity. This was at the time and perhaps still is the most successfulemployee buy- out in the corporate history of Pakistan. Renamed as Engro ChemicalPakistan Limited, the company has gone from strength to strength, reflected in itsconsistent and enviable financial performance, growth of the core fertilizer businessand successful business diversification into our fields. Its performance & outlook isfollowing the declared vision, To be the premier Pakistani enterprise with aglobal reach, passionately pursuing value creation for all stake holders

Engro Chemical Pakistan Limited produced a large quantity of fertilizers such asEngro Urea, Engro DAP, Engro Zorawar and Engro Zarkhez and the subsidiariescompany like Engro Vopak Terminal Limited, Engro Polymer & Chemical Limited,Engro Energy Limited and then diverse all the activities to make food products inEngro Foods Limited by the names of Olpers, Olwell HCLF, Olpers Cream,Tarang.

Engro has never been a company to rest on its laurels. Their employees and culturedrive them to achieve greater success. They look for new and exciting ways to returnvalue to their customers and their shareholders.

They said about their employees, Our employees performance can only flourish in asound work environment. That is why Engro is committed to supporting it leadershipculture through systems and policies that foster open communication, maintainemployees and partner privacy, and assure employees health and safety. Engro

people are some of the best in the best in the world with a shared passion to learn andstretch beyond their limits. It is our people who make Engro a great company and anexciting place to work.

The company shows a good financial performance in every field, the sales of the year2007 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 2006profit 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 IntroductionCompany Introduction

Engro Chemical Pakistan Limited is the second largest producer of Urea fertilizerin Pakistan. The company was incorporated in 1965 and was formerly ExxonChemical 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. TheEmployees of Engro, in partnership with leading international and local financialinstitutions bought out Exxons equity and the company was renamed as EngroChemical Pakistan Limited. Engro is a public limited company listed on the StockExchanges of Karachi, Lahore and Islamabad.

Engro accomplished significant progress not only in its base urea fertilizer businessbut also in diversification projects. Urea production was increased from an annualcapacity 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. Inaddition, Engro has over thirty years of experience of fertilizer marketing in Pakistanwith an elaborate dealer network.

As part of our growth and diversification plans, we have established a $60 million50:50 Joint Venture company named Engro Vopak Terminal Limited in 1995,

between Engro and Royal Vopak (formerly Royal Pakhoed), a Netherland basedcompany and one of the foremost terminal operators in the world. This joint venturecompany 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 keyinfrastructure for the development of capital intensive chemical industry in the heavyindustrial zone of Port Qasim, Karachi.

Engro has also formed another Joint Venture company with Mitsubishi and AsahiGlass of Japan named Engro Asahi Polymer & Chemicals Ltd. to develop aPolyvinyl Chloride (PVC) resin project at Port Qasim, Karachi, with an initialcapacity of 100,000 tons per year based on imported Vinyl Chloride Monomer. The

project has been successfully completed and commenced production in November1999. The plant production is being marketed both in domestic and export marketunder the brand name SABZ. Engro has 50% equity in this $74 million venture.

Construction of Engros 100,000 tons p.a. capacity NPK fertilizers plant at Port Qasimat a cost of US $10 million was completed in 2001. The plant is in production andconsiderably benefiting the countrys agriculture by providing balance nutrition toimprove farm yields. During the year 2004 the products generic name of NPK wasreplaced by Zarkhez.

In April 2003 Engro acquired 51% intrest in the Automation & Control Division ofInnovative (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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Mission StatementMission Statement

Our mission is two fold:

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 otherAgricultural sectors.

In pursuing the mission we shall at all times be guided in our conduct and decisionmaking by our Core Values.

Where we are going

Our VisionOur Vision

To be the premier Pakistani enterprise with a global reach, passionately pursuingvalue creation for all stake holders

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QUALITY & CONITNUOUSE IMPROVEMENTQUALITY & CONITNUOUSE IMPROVEMENT

We believe that quality and a relentless commitment to continuous improvement areessential to our ongoing success. To this end, we define quality as understanding thecustomer's expectations, agreeing on performance and value, and providing productsand services that meet expectations 100 percent of the time. Our motto is, "Quality inall we do."

ENTHUSIASTIC PURSUIT OF PROFITENTHUSIASTIC PURSUIT OF PROFIT

Successfully discharging our responsibilities to our shareholders to enhance the long-term profitability and growth of our company provides the best basis for our careersecurity and meaningful personal growth. We can best accomplish this by consistentlymeeting the expectations of our customers and providing them with value.

EXTERNAL & COMMUNITY INVOLVEMENTEXTERNAL & COMMUNITY INVOLVEMENT

We believe that society must have industrial organizations that it can trust. Trust andConfidence are earned by our performance, by open and direct communication, and

by active involvement in the communities in which we live and conduct our business."

CANDID & OPEN COMMUNICATIONSCANDID & OPEN COMMUNICATIONS

We value communications that are courteous, candid and open and that enable each ofus to do our jobs more effectively by providing information that contributes to thequality of our judgment and decision making. Effective communication should also

provide the means for gaining understanding of the company's overall objectives andplans and of the thinking behind them.

ENJOYMENT & FUNENJOYMENT & FUN

We believe that excitement, satisfaction and recognition are essential elements of ahealthy, creative and high-performing work environment. Having fun in our work

should be a normal experience for everyone.

INNOVATIONINNOVATION

Success requires us to continually strive to produce break through ideas that result inimproved solutions and services to customers. We encourage challenges to the statusquo and seek organizational environments in which ideas are generated, nurtured anddeveloped.

INDIVIDUAL GROWTH & DEVELOPMENTINDIVIDUAL GROWTH & DEVELOPMENT

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We strongly believe in the dignity and value of people. We must consistently treateach other with respect and strive to create an organizational environment in whichindividuals are encouraged and empowered to contribute, grow and developthemselves and help to develop each other.

TEAMWORK & PARTNERSHIPTEAMWORK & PARTNERSHIP

We believe that high-performing teams containing appropriate diversity can achievewhat individuals alone cannot. Consciously using the diversity of style. Approach andskills afforded by teams is strength we must continue building into our organization.

DIVERSITY & INTERNATIONAL FOCUSDIVERSITY & INTERNATIONAL FOCUS

We value differences in gender, race, nationality, culture, personality and stylebecause diverse solutions, approaches and structures are more likely to meet the needs

of customers and achieve our business goals. Corporate Responsibility Report

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PRODUCT PORTFOLIOPRODUCT PORTFOLIO

Fertilizers

Nitrogenous Fertilizers

ENGRO Urea - A trusted name with farmers

Compound Fertilizers

ENGRO Zarkhez- Towards Balanced Fertilization

A specific product line

that focuses on balanced

crop nutrition and higher

yield for the farmer

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Phosphatic Fertilizers

ENGRO Di-Ammonium Phosphate (DAP) &Zorawar - Leading Phosphatic fertilizers

Engro Urea

ENGRO UREA is a trusted high grade fertilizercontaining 46% N, with moderate hygroscopic. It hasa pH value of 6.8 (organic molecule) and is suitablefor all crops on all soils. Engro Urea is an excellentsource of Nitrogen for the vast majority of cultivatedsoils of Pakistan.

Engro DAP

Engro DAP contains 46% P2O5 and 18% N. Morethan 90% of P is water soluble. It has a pH value of7.33 and is a good source of P fertilizer for all crops.It is an equally good source on problem soils (salinesodic) with coarse texture. On an overall basis it suitsto about 90% soils of the country.

Engro Zorawar

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Engro Zorawar is one of the highest grade phosphaticfertilizers. It is acidic in reaction (pH >= 3.5) andcontains 52% P2O5 of which more than 90% is watersoluble, while the rest is citrate soluble. In addition toP, it contains 12% N, 2% sulphur and 1% calcium. Itis a good fertilizer for all crops on all soils ofPakistan and produces excellent results on alkalinesoils, due to its acidic nature.The acidic pH of Engro Zorawar also tends to slowdown the rapid conversion of soluble P to waterinsoluble compounds, keeping it plant available for agreater period of time.

Engro Zarkhez

Engro Zarkhez is homogenously granulated fertilizer which maximizes crop yield byproviding balanced nutrition for a wide variety of crops through the uniformavailability of Nitrogen, Phosphorous and Potassium. Engro Zarkhez grades arespecially produced to suit the requirements of individual crops and soils, and provideconvenience to the farmer through ready availability of of precise quantities ofdifferent nutrients.

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Chemical Handling & StorageChemical Handling & Storage

Developing Pakistan's First CyrogenicStorage Facility

Chemical Handling & StorageChemical Handling & Storageby Engro Vopak TerminalLimitedA state of the art jetty and terminal at Port Qasim, Karachi for handling and storage ofLPG and bulk liquid chemicals.

Storage Capacity 69,000 m3

Number of Tanks 20Draft Sea Berth 10 meters

Jetty CapacityVessels up to 75,000 dwt (currently 45,000 dwt) at13 meters draft

Access Sea/Road/PipelineProducts Handled & Stored Paraxylene

Acetic AcidPhosphoric Acid (Handling only)Vinyl Chloride Monomer

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AcrylonitrileLiquefied Petroleum GasMono Ethylene Glycol

PVC ResinPVC Resin

Expansion and backwardintegration

PVC ResinPVC Resinby Engro Polymer & Chemicals Limited

Polyvinyl chloride (PVC) Resin: A synthetic resin, composed of repeating units ofvinyl Chloride. It is very versatile and is used in a wide variety of products

1. SABZ PVC AU-58AU-58 is a medium-low molecular weight suspension resin. It offers high fusion ratein processing, and has a narrow particle size range. It is very low in fish-eyes, gelcount and foreign matter and has excellent heat stability and clarity. It isrecommended for transparent and opaque rigid / semi-rigid PVC applications.

ApplicationsRigid PVC sheet, PVC bottles, injection moulded PVC products like non-pressurePVC pipe fittings and conduit fittings, rigid PVC extruded film and sheet.

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2. SABZ PVC AU-60AU-60 is a medium-low molecular weight suspension resin. It offers high fusion ratein processing and has a narrow particle size range. It is very low in fish-eyes, gelcount and foreign matter and has excellent heat stability and clarity. It isrecommended for transparent and opaque rigid PVC applications.

ApplicationsRigid PVC sheet, PVC bottles, injection moulded PVC fittings for pressureapplication, rigid PVC extruded film and sheet, PVC welding rods.

3. SABZ PVC AU-67SAU-67S is a medium molecular weight suspension resin. It has a porous particlestructure and large interior surface. It has high plasticizer take up and absorption rate.On mixing, it results in free-flowing powder with dry feel. It is very low in fish-eyesand foreign matter. This grade has been specially designed for both transparent and

opaque plasticized applications.

ApplicationsPVC shoes, sandals and soles (expanded and compact), PVC film, sheet and artificialleather, PVC cables, PVC garden hose and tubes with reinforcements, tubular filmand tubing, PVC flooring and tiles, PVC water stops / expansion joints and plasticizedPVC compounds.

4. SABZ PVC AU-67RAU-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. Thisresults into a high and uniform production rate in the extrusion process. This gradehas been specially designed, and is recommended for rigid PVC applications.

ApplicationsRigid PVC pipes, conduits and ducting,, PVC profiles such as doors, windows andother sections, PVC corrugated pipes, PVC shrinkable film and also twist wrap candyfilm, rigid PVC compounds for extrusion.

5. SABZ PVC AU-72

AU-72 is a high molecular weight suspension resin. It has a high plasticizer take upand absorption rate. On mixing, it results in free-flowing powder with dry feel. It isfree from gels and foreign matter. It has superior dielectric properties and physicalstrength, which makes it an ideal choice for electric insulated PVC cables.

ApplicationsPVC cables, flexible calendared PVC film, sheet and leather, flexible PVC extrusionand injection moulded products.

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Power GenerationPower Generation

Our 217 MW Power Plant.

Power Generationby Engro Energy Limited

Engro identified a Power Project based on low BTU, high H2S gas from Qadirpur gasfield. The project is unique as it will convert low BTU high sulphur content permeategas, which is currently being wasted and flared, into 217 MW electric power

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industrial Automationindustrial Automation

Providing process control solutions

to your industrial units

Industrial AutomationBy Avanceon (formerly known as EngroInnovative Automation Pvt. Limited)

Market leader in industrial automation business providing process control solutions to

Industrial units. It offers Power & Energy Management Software solutions as well as

High end Software that integrate production and business application.

Human Machine InterfacesVariable Frequency DrivesDistributed Control SystemIndustrial & ERP Software

Non-Contact Online MeasurementVibration MonitoringAnalytical & Combo SolutionsWeighing ConveyersMotorsField & Process Instruments With other SensorsSecurity & Monitoring SolutionsControl ValvesCombustion ProductsProgrammable Logic Controllers

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Foodsby Engro Foods Limited

Olpers:Standardized at 3.5% fat, Olpers is a premium, UHT all-purpose milk.Olwell HCLF: (High Calcium, Low Fat) Olwell is a premium quality milk for thehealth conscience.

Olpers Cream : UHT Cream standardized at 40% fat

Tarang:Liquid tea whitener

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Challenges and Issue Faced

In the year 2008, Engros focus will be on flawless implementation of the significantgrowth initiatives in al businesses, viz., fertilizer, food, energy, chlor-vinyls, chemicalstorage and industrial automation. Engro has also put in place plans to continue tosource and retain quality people to sustain its growth ambitions.

Urea demand is expected to be rebusting whilst phosphates demand is expected to beaffecting by high international prices.

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 alsoacknowledges the support and corporation received from the Government, JointVenture, Partners, Bankers, Suppliers, Contractors and other Stakeholders.

These are the following challenges and issues faced by the organization at starting:

Shortage of irrigation waterBoth during the rabi (winter) and kharif(summer) seasons for crop sowing, which led

to reduced farmer income. As a result, overall urea off-take fell by 1% to 4.0m tonswhereas demand for DAP (Di-Ammonium Phosphate) fertiliser dropped by 5% to1.2m tons. ECPL faced a marginal decline in urea volumes (0.6%) and a 17% declinein volume sales of imported DAP fertilizer. The sales drop in case of DAP isattributable to drought conditions and insufficient supply sourcing in a period ofuncertainty relating to GST levy in Pakistan. The Govt. imposed a 15% GST on theselling price of DAP and other fertilizers w.e.f. Sept 02, 2001.

Increase in Gas PriceFertilizer Policy was announced in Aug 02 which maintained subsidy on feedstock(gas used as raw material - constituting 20% of COGS/ton) with fixed feedstock price

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increases stipulated for the next 5 years. However, fuel stock (gas used for running theplant - constituting 40% of COGS/ton) prices would continue to be deregulated andadjusted every 6 months. During FYE 01, gas price increase was much lower ascompared to previous years as there was no increase in feedstock prices whilefuelstock went up by 15%.

Start-up losses on NPK operationsECPL expanded into 100k NPK (blended fertilizer) plant, which came online in Apr01. However, initial teething problems limited sakes to 24k tons against productionof 31k tons. NPK business showed a loss of PKR 109m. However, the plant iscurrently operating at 80% of its design capacity and some reductions in operatingexpense have been achieved.

Loss of ProductionECPLs urea production during the year was down by 2% to 790k tons on account ofcertain production issues which were significantly smoothened towards the end of theyear.

Competitive Strategies

Before formulation an effective strategy for getting competitive edge, the mangermust conduct competitive analysis. This involves assessing both environmental andorganizational factors influencing ability to compete effectively.

This competitive situation could be find out with help of SWOT analysis:

Strengths

Strong, professional management (management practices & principlesinherited from Exxon Chemicals USA, after the management buyout in 1991).

Subsidized gas pricing during the last 10 years has resulted in strongaccumulated reserves. Low gearing will provide financial strength to theCompany in coming years.

50% joint venture, Engro Vopak, has completed fourth year of profitableoperations. Future dividend income will hedge against ECPLs core-businessrisk.

Weakness

While Engro Vopak is performing satisfactorily, deterioration in operatingresults of Engro Asahi could result in Asahi calling on financial support fromECPL.

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Engro Urea does not command the same market premium as competitor FaujiFertilizers product Sona. However, Sona urea is sold mainly in the Punjab

province, whereas Engro has a strong niche in Sindh province.

Opportunities

New petrochemical projects will help improve Group profitability through 1)clear synergies, and 2) reduction in business risk through capturing a largersegment of the value-addition chain.

Agriculture business projects like blended fertilizers, hybrid seeds etc.

Threats

Dumping of imported fertilizer in the local market. Government action is often

protracted. During 1999, ex-Soviet states dumped huge quantities of urea inPakistan. Even though the government imposed 10% regulatory duty, it wastoo 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 ofthe 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 venturebetween Fauji Foundation (a leading charitable trust in Pakistan) and Haldor TopsoeA/S of Denmark. FFC-Jordan Fertilizer Company Limited is a joint venture betweenFFC and Jordan Phosphate Mines Co. Jordan.

The largest urea manufacturing facility of Pakistan consisting of two ammonia/ureaunits owned by FFC is built at Goth Machhi in district Rahim Yar Khan. Goth Machhiis situated at a distance of 2 kms from the main Lahore-Karachi highway and isadjacent to the main railway line. The two plants are based on natural gas from MariGas Fields and have an annual designed production capacity of 1.3 million tons ofurea.FFC commenced commercial production of urea in 1982 with annual capacity of570,000 metric tons.

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Through De Bottle Necking (DBN) program the production capacity of the existingplant increased to 695,000 metric tons per year.

Production capacity was enhanced by establishing a second plant in 1993 with annualcapacity of 635,000 metric tons of urea.

FFC participated as a major shareholder in a new DAPS/Urea manufacturing complexwith participation of major international/national institutions. The new company(FJFC) commenced commercial production with effect from January 01, 2000. Thefacility is designed to produce 551,000 metric tons of urea and 445,500 metric tons ofDAP.

Fauji Fertilizer Company currently has 1,769 employees. With sales of 16.79 billionPakistan

The following tables provide a comparison of operating performance of ECPL with itsclosest competitor and market leader - Fauji Fertilizer Company:

Engro Chemical Fauji Fertilizer

Market

share

19% 40%

Capacity 850,000 tons per annum (2

plants)

1,300,000 tons per annum (1

plant)

Products Aside from sale of Engro

urea, ECPL also sells

imported DAP, NP, MOP and

NPK fertilizers and hybrid

seeds.

Sells prilled urea.

Affiliate (FFC Jordan)

manufactures granular urea &

DAP.

Brand Engro Urea popular brand

in southern part of the

country.

Sona urea very popular

product, esp. in northern

Pakistan. Sona is granular

urea which is perceived to be

better.

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Vision To become a diversified

chemical company operating

internationally. A number of

projects involving backward

& forward integration are

under consideration.

Setting up industrial units in

the fields of petroleum

refining, paper & pulp,

mineral acid, & off-shore

fertilizer manufacturing.

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 theabove, prices in fact, have increased by 5.7% since March which is consideredsufficient to protect margins.

Given the decline in domestic fertilizer off-take, the Govt. has allowed export of0.23m tons of urea in order to reduce inventories. However, exports at current pricesare not a viable option. The local urea ex-factory price in FOB terms currently standsat US$ 120/ton. Add US$6-8 for local transportation to port and another US$20freight to Middle East. Thus, US$146-148/ton international price would be required tomake exports viable. However, Middle East bagged prices currently stand at US$ 112-115/ton.

To date, the fertilizer industry in Pakistan has been subject to preferential treatment inthe form of subsidized gas prices. However, in line with IMF conditionality aimed atde-regulation, the Fertilizer Policy announced in Aug-01 envisages a gradualwithdrawal of subsidy offered to the industry

SuppliersMari Gas Company is the sole gas supplier to ECPL, with the latter having a total gasallocation of 103 MSCFD. Payments to Mari Gas are made on a fortnightly basis.

The competitive analysis for Engro Chemical Pakistan is as fallows

Porters Competitive Forces Model:

Porters Competitive Forces model analyzes the nature and intensity ofcompetition in a given industry in terms of five major forces.

Rivalry:

Engro Chemical Pakistan has rivalry with the other fertilizermanufacturing companies in the fertilizer Industry of Pakistan.The companies that offer rivalry to Engro Pakistan are

i. Fuaji Fertilizer Company Limitedii Dawood Herculesiii Pak Saudi Fertilizer Limited

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iv Pak Arab Fertilizer

Various competitive tactics among rivals lower prices thatcan be raise costs of doing business.

Bargaining Power of Customers:

At Engro Chemical Pakistan Limited there is no customerpower of bargaining, because the company is already givinggood quality at a reasonable rate.

Bargaining Power of Suppliers:

In the fertilizer industry of Pakistan there is comparisonbetween the rivals in prices. But as Engro Pakistan is not an

autonomous body in manufacturing their products so they faceencounter bargaining power of suppliers.

Threat of substitute products:

Engro Pakistan as threat from their rivals in the industry, butthey maintain their quality standards and manufacturing statusat a relatively affordable rate.

Culture

Our employees bring

expertise and

dedication to the

workplace

Organizational Culture:

The shared values, principles, traditions and ways of doing things that influence theway organizational members act.

Sources of Organizational Culture:

The organizations founder (vision and mission).

Past practices of the organization ( the way things have been done )

The behavior of top management.

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Our people and our culture drive us to achieve greater success. We look for new andexciting ways to return values to our customers and our shareholders.

The culture of Engro consists of Two Factors:

1. Our People.2. Quality and Training.

1. Our People:

More than 700 employees bring expertise and dedication to the workplace. We valueeach employee, value their inputs and view. Continuously striving to becomeemployer of choice, we provide a workplace where people feel confident, valued andinspired.

2. Quality and Training:

Employer development is one of the pivotal areas for organizational development. Toorganizational competence levels, new training programs encompassing performancemanagement, leadership and competency development are introduced.

Improvisation throughSix Sigma:

the legend leads again

Engro is among the first Pakistani companies implementing six sigma across all areasand utilizing it as a management system to execute its strategic objectives. Among thefocus 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 otherareas; speed, innovation, perfection and in becoming world class professionals.

Six Sigmas robust problem solving methodology and statistical toolkit allows thecompany to benchmark processes against global standards in a language that iscomparable 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 trainingprograms, both core management and technical, which are used on a regular basis to

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develop skills and knowledge. In addition, specific one-off programs may bedeveloped on a need basis. Alternatively, individuals may attend externally run

programs and there may be cases where learning by planned job experience is the bestanswer. Employees contributions to assessing their own training needs are welcomedas are the suggestions for suitable programs.

How employees learn culture:

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.

Symbols Engro symbols motivate the employees which is Growing with

Pride

Language In Engro mostly that language is used which is easilyunderstandable by the employees, so the employees easily understand the

culture of the organization.

Financial Position of the Company

Stakeholders:

Any constituencies in the organization external environment that are affected by the

organization decision and actions.

These are the stakeholders ofEngro Pakistan

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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Financial Positions in Last Five Years:

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.

Five Year at Glance

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Growing with Pride

WhyEngro is Successful?

Million Rupees 2007 2006 2005 2004 2003

Net sales 23183 17602 18276 12796 11884

Operating expense 3279 2756 2641 2233 2534

Profit before tax 4235 3445 3220 2315 2323

Profit after tax 3155 2547 2319 1611 1557

Employee costs 1050 950 804 795 749

Taxes, duties & developmentsurcharge

5890 4633 4162 3911 3457

Workers fund 316 251 215 156 168

Property, plant & equipment 6109 6319 6351 6492 6648

Capital expenditure 8024 391 377 520 370

Long term investment4108 1480 748 - 85

Long term liabilities 15423 1800 2890 2580 3236

Net current assets 11132 2042 2211 1618 1796

Dividends and Shares

Shareholders funds 15482 9370 7376 6586 6199

Shares outstanding at year end 193 168 153 153 153

Dividend per share. Rs. 7.0 9.0 11.0 8.5 8.0

Dividend payout rate 41% 58% 77% 81% 79%

Bonus shares _ _ _ _ _

(thousand matric tons)Engro urea production 954 969 912 870 955

Engro urea sale 874 945 840 891 930

Zarkhez/ Engro NP production 125 108 157 121 72

135 116 143 114 86

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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. Its 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.

Key Success Factors

Brand leadership: Farmers perception plays a major role in determining abrands success;

Manufacturing technology: Newer technology helps achieve low-costleadership within the industry

Economies of scale. Our core values. Diversification of our business. Our corporate culture

Engro Chemical Pakistan has gone strength to strength, reflected in its consistentand enviable financial performance, growth of the core fertilizer businessdiversification into our fields. Its performance & outlook is following the declaredvision, To be the premier Pakistani enterprise with a global reach, passionatelypursuing value creation for all stake holders

Conclusion:

In the conclusion section we first say that Engro is doing good business. If investorsfeel that Pakistan is not a good place to invest they look at the success of the EngroPakistan, how they are doing business in that situation when there is economic crisis,

bad position of the stock exchange.

7/30/2019 Strategies Engro Group Pakistan

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Engro Chemical Pakistan Limited is the first company in history of chemical industrywho makes fertilizers as well as food products together. First they only manufacturedfertilizers only but they diverse their business into many fields like, Engro VopakTerminal 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 away that more values returns to their customers and shareholders. More than 700employees bring expertise and dedication to the workplace.

The management of the organization is very professional and they are ready tocompete all the challenges. The company financial performance is very good andcontinusely increased. Infact Engro Chemical Pakistan Limited is growing by leapsand 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 visitEngro North Zone to collect information about the management. These are thefollowing references from where we gather information.

www.engro.com,pk

www.engrozarari.com

www.wikipedia.com

www.scribed.com

www.slideshare.com

www.inpopk.com