SWOT Analysis.

Strengths:
 Capital intensive nature of the sector.
 The players operating in this sector are financially strong.
 All the fertilizers plants are producing at more than 100 percent installed capacity of
utilization.
 Cheap labor.
 Heavy demand.
 Well established distribution network.
 Government support in the form of subsidy.
 An agro based economy.
 Central location of plant.
 Broad production range.
 Broad range of main and mid products.
 Monopoly in Calcium Ammonium Nitrate and Nitro Phosphate production support from
Ministry.

Weaknesses:
 Low capacity as compared to demand (demand supply gap).
 Due to existence of black market and heavy demand farmers had to pay above the stated
price.
 Technological backwardness.
 Lack of local resources.
 Urea made by Fatima is of more powdered form as compared to urea made by FFC and
other urea producers.
 Environmental problem & proximity to urban area.
 Obsolete plant with high operating cost.
 Monetary sensitiveness to foreign exchange exposure.
 Government compellations especially for the pricing policy.
 Dependence on imported feed stock suppliers and special maintenance facilities.
 Limitation in achieving NITROPHOSPHATE product quality, design specifications.
 Unsatisfactory product quality of urea.
 Too much centralization effects timely decision making.
 No proper sales promotion.
 Placement and number of warehouses.
 Lack of long term planning, decisions are made keeping in view the short-term benefits.
 Lack of financial budget for implementation at decisions.
 Too much cost consciousness that affects the long run impact and profits.
Opportunities:
 As demand is high compared to supply, fertilizer sector has an opportunity to expand
capacity to fulfill the local demand.
 Improvement in product quality.
 Proper sales promotion.
 Proper placement of warehouses.
 Expansion of plants to meet the demand more effectively.
 Export the product.
 Delegation of authority so that decisions can be made at the spot without any delay.
 Long term profits should be preferred over short term profits. Quality should be improved
gradually with the results and trends in the market.

Threats:
 Scarce water resources.
 Tax imposed from government.
 Removal of subsidy.
 Load-shedding of gas.
 Rise in fuel prices.
 Rising global prices of fertilizer products.
 Government intervenes to stabilize the prices.
 Imported fertilizers are also a threat to local fertilizer industry.

PESTEL Analysis
Political Trends:
 Political trends are always in favor of this industry. The government
has provided incentives under Fertilizer Policy, 2001, to encourage
fertilizer production in the country.
 To fulfill local demand of fertilizers at a local price, the Government
is providing subsidy on production and import of fertilizers.
 Investors will be allowed to relocate second hand plant, equipment
and machinery with the same concession as applicable to the new
plants.
 Tax relaxation has also been offered by the government.
 Import of rock Phosphate and Phosphorous by manufacturers of
fertilizer is free of customs duty.
  Gas price has been fixed for 10 years for new investments.
 Export benefit to suppliers of capital goods for new projects of
fertilizers.
 The Government is providing concessionary feed stock gas to
fertilizers plants for production of urea.
Economic Trends:
 One of the main sector of economy is Agricultural as it contributes
22% to the GDP and without fertilizer industry this sector would not
be able to work. Due to that, Government always gives support to
the fertilizer industry.
 Tax relaxation has been offered in order to attract new entrants.
 Export benefit to suppliers of capital goods for new projects of
fertilizers. To reduce the dependence on imported fertilizers by
enhancing the local production capacity.
 The Government is providing subsidy on production and import of
fertilizers. A massive subsidy of Rs.27 billion in the supply of urea
and DAP in 2009.
 Ban on export of fertilizer is also imposed so that economic stability
would be gained.
Social Trends: