Table of Content

S. No. Description
Page No.

01- Summary 02

02- Introduction to Engro Corporation 04

03- PESTLE Analysis 06

04- SWOT Analysis 08

05- Problems Facing by Engro Corporation 10

06- Solutions of Problems Facing by Engro Corporation 12

07- Suggestions 14

08- References 16

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Summary
Agriculture accounts for approximately 23% of Pakistan's GDP, provides
direct and indirect employment to over 70% of the country's workforce and results
in earnings of over 60% of export dollars.

Engro Corporation Limited is one of Pakistans largest conglomerates with

businesses ranging from fertilizers to power generation. In the interest of better
managing and overseeing businesses of subsidiaries and affiliates that are currently
part of Engros capital investments, Engro Chemical Pakistan Limited converted
into a holding company structure.

Currently Engro Corporations portfolio consists of seven businesses which

include chemical fertilizers, PVC resin, a bulk liquid chemical terminal, industrial
automation, foods, power generation and commodity trade.

Besides providing the long term vision for the company and overseeing
performance of the subsidiaries and affiliates, Engro Corporation Limited is also
responsible for allocation of capital, management of talent, leadership
development, HR guiding policies, leadership role in public relations and CSR
activities, control structures, legal and IT support.

The fertilizer industry in Pakistan is of an Oligopolistic nature, with the four

major players in the market - Engro, FFC, FFBL and Dawood Hercules.
Considering the urea market, FFC and FFBL have the highest share of urea
production i.e. 48%, Engro 15%, Dawood Hercules 6% and 20% is imported and
distributed through NFML.

Engro has always emphasized quality assurance in its product and its operations.

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 Engro's commitment to sustainable development. Sustainability is at the
heart of Engro's values and is central to the growth and continued success of
their company.

They promote safety in the workplace and progressive human resource

practices; they benefit their employees, who are essential to their success.

ECPL is regarded as a professional company having one of the best

management teams in the country practicing the highest standards of
corporate governance and business strategy.

Engro is committed to supporting it leadership culture through systems and

policies that foster open communication, maintain employees and partner
privacy, and assure employees health and safety.

The company's approach to corporate and social responsibility (CSR) is built

on respect for the environment and maintaining strong relationship with all
key stakeholders

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Introduction to Engro Corporation
Engro Corporation Formerly known as Engro Chemical Pakistan Limited
(ECPL) is a listed public company incorporated in Pakistan. In 1991, Exxon
chemical fertilizer limited decided to divest its fertilizer business on a global basis.
The employees of Exxon Chemical Pakistan Limited, in partnership with leading
international and local financial institutions, bought out Exxons 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 financial performance, growth of the core fertilizer business, and
diversification into other businesses.

The company has since diversified and expanded into several businesses
ranging from dairy to bulk handling. ENGRO today consists of the core fertilizer
business with a capacity of 975K tpa for urea and several subsidiaries namely
Engro Foods Limited (EFL), Engro Vopak Terminal Limited (EVTL), Engro
Eximp Limited (EXIMP), Engro Power Gen Limited (EPGL), Engro Energy
Limited (EEL), Engro Polymer & Chemicals Limited (EPCL) and Avanceon
Limited (EIAL).

ECPL having good reputation in market by strong brand name and

management practices and principle inherited from EXXON CHEMICAL USA,
after the management buy out in 1991. The principal activities of ECPL are the
manufacturing, purchasing, and marketing of fertilizers. The Company's fertilizer
brand, Engro', is the second highest selling urea brand in Pakistan. The Company's
financial and management strength is denoted by its AA- rating by the Pakistan
Credit Rating Agency.

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 Besides providing the long term vision for the company and overseeing
performance of the subsidiaries and affiliates, Engro Corporation Limited is also
responsible for allocation of capital, management of talent, leadership
development, HR guiding policies, leadership role in public relations and CSR
activities, control structures, legal and IT support.

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PESTLE Analysis
Political:-
Our countrys Government does not remain stable for longer period of time.
Marshalls law affected our economy badly. Due that the economic policies, tax
policy, labour law, environmental law, trade restrictions, tariffs change randomly.
So investment in such an environment is risky.

Economic:-
Economic factors include economic growth, interest rates, exchange
rates and the inflation rate. These factors have major impacts on how businesses
operate and make decisions. Inflation rate of our country is now days in two digits
form which is very bad for economy. Economy growth is also low. GDP is
increasing with above 4% which is less than past years.

Social:-
Social factors include the cultural aspects and include health consciousness,
population growth rate, age distribution, career attitudes and emphasis on safety.
Trends in social factors affect the demand for a company's products and how that
company operates. Our countrys population mostly consists of individuals of age
between 6 to 24 years. So, special techniques should be followed to capture this
market share.

Technological:-
Technological factors include technological aspects such
as R&D activity, automation, technology incentives and the rate of technological
change. Company should in touch with new technologies to perform better and
provide better, cheaper, reliable things to customer. Otherwise they will suffer
market myopia.

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Environmental:-
Environmental Factors include ecological and environmental aspects such
as weather, climate, and climate change, which may especially affect industries
such as tourism, farming, and insurance. The weather of Pakistan is ideal for
farming, dairy, poultry etc. but due to recent floods all these things effected badly.
So production as well as demand of goods is decreased.

Legal:-
Legal factors include discrimination law, consumer law, antitrust
law, employment law, and health and safety law. Company should follow laws and
regulation for its better reputation, brand image, employ as well as customer
satisfaction etc.

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SWOT Analysis
STRENGTH:
Strong performance management(management practices and principle
inherited from EXXON CHEMICAL USA ,after the management buyout in
1991)

Subsidize gas pricing during the last 10 years has resulted in strong
accumulated reserve; low gearing will provide finance strength to company
in coming years.

50% joint venture, ENGRO vopak has completed. Four years of profitable
operations. FURTHER DIVIDE INCOME WILL HEDGE AGAINSTECPL,
s core business.

Strong customer and product research.

Large market share of Engro innovative and chemicals.

Having good reputation in market by strong brand name.

WEAKNESSES:
While Engro Vopak is performing satisfactorily deterioration in operating
results of Engro a SAHI could result in A SAHI calling financial support
from ECPL.

Engro urea doesnt command the same market premium as competitors Fuji
fertilizers product Sona Sona urea is sold in the Punjab province, whereas
Engro has strong niche in sindh province.

Unable to fulfill demand of local powder milk market.

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OPPORTUNITIES:
New petrochemical projects will help to improve profitability.

Reduction in business risk through capturing a larger segment of value

addition chain.

Agriculture business projects like blended fertilizers, and hybrid seed etc.

May merge with their global business to eliminate competitors.

Has potential to innovate and differentiate companys product to sustain a

competitive advantage.

THREATS:
Competitive or technological threats are highlighted.

Major internal factors which will affect the companys performance e.g. size,
strength, cost, revenues and strategy as well as external factors e.g.
competitive positioning and industry trends.

Perception and price differentiation.

High inflation rate.

Decreasing GDP growth rate.

Low purchasing power.

Increase interest rate.

Decreasing investment.

Recessionary period in business cycle.

Engro food is currently facing increase in sale tax.

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Problems Facing By Engro
Corporation
The fertilizer industry in Pakistan is of an oligopolistic nature, with the four
major players in the market - Engro, FFC, FFBL and Dawood Hercules.
Considering the urea market, FFC and FFBL have the highest share of urea
production i.e. 48%, Engro 15%, Dawood Hercules 6% and 20% is imported and
distributed through NFML. And considering the phosphorus market, FFC and
FFBL captured high share of 47%, Engro 28%, Agri tech 2%, RG 1% and around
22% is imported. But the Engro urea doesnt command the same market premium
as competitors Fuji fertilizers product sona Sona urea is sold in the Punjab
province, whereas engro has strong niche in sindh. The in-house diversification
includes, NPK Fertilizer business, seed business, phosphate and micronutrient
business

The demand of fertilizer was very badly affected due to soil erosion and loss of
land, which is because of recent flood in Pakistan. The demand of the urea in
Pakistan stood 4.2MT compared to 4.6MT last year showing a decrease of 10%,
while the demand of DAP stood 0.7MT compared to 1.2MT signifying a decrease
of 40% compared to the same period last year. Considering the performance of
Engro Fertilizer, the sales of the Engro urea remained 665kt compared to 688kt last
year showing a decrease of 3.4% compared to average industry drop of 10% in the
same period. The sales of Zarkhez have decreased to 66kt from 73kt signifying a
decrease of 10% and the sale of phosphate decreased from 235kt to 196kt showing
a decrease of 16.5%. The overall sales of the Engro Fertilizers in the current 9-
month period were around 12 billion compared to 20 billion of the same period last
year, showing a decrease of 38%.

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 Engro urea doesnt command the same market premium as competitors Fauji
fertilizers product Sona Urea Sona urea is sold in the Punjab province,
whereas Engro has strong niche in sindh province.

Unable to fulfill demand of local powder milk market.

High inflation rate.

Decreasing GDP growth rate.

Low purchasing power.

Increase interest rate.

Decreasing investment.

Recessionary period in business cycle.

Engro food is currently facing increase in sale tax.

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Few Solutions to the Problems
Facing By Engro Corporation
The company's approach to corporate and social responsibility (CSR) should
be built on respect for the environment and maintaining strong relationship
with all key stakeholders. These are stakeholders of Engro, employees are
1664, customers are 68000, consumers are 3,100,000, vendors are 3,500 ,
shareholders are 11365, dairy farmers are 51,000, students are 4,300, patient
are 32,500.so total lives touched engro is 3,275,334. Engro should cares for
the natural environment through responsible management of resources. They
should promote safety in the workplace and progressive human resource
practices because that will benefit their employees, who are essential to their
success .They, will invest in their communities because strong, healthy
communities provide the foundation for strong healthy relationships for
company to grow.

Engro is also signing up with the UN Global Compact to confirm its

supports for the ten Principles with respect to human rights, labor rights, the
protection of the environment and anticorruption.

In addition to meeting sales targets, ECPL's marketing strategy should

focused on farmers Education on the effective use of fertilizers. The market
development program should include Characteristics like soil testing, crop
demonstrations, farmer meetings, and training its marketing manpower and
dealers. Over the years, ECPL's advertising campaigns have introduced mass
education to aid farmers in choosing the most favorable package for their
crops. The sales and promotion efforts will provide valuable merchandising
assistance to ECPL dealers.

Due to elected Government and with the change of Finance minister will
brought changes in over all structure. The trust of investors of nation and of
outside the nation will invest in the Economy. So, the GDP and other
economic factors i.e. inflation rate will become better.

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 Its management should design a marketing strategy which strongly influence
the people of Punjab like changing the simple product name to people
oriented product name i.e. Sona urea of FFC etc.

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Suggestions
Some suggestions are as follows:

Enhance business/sales activities by understanding customers businesses

better.
Get detailed information and financial and strategic analysis on companies
operating in your industry.
Identify prospective partners and suppliers with key data on their
businesses and locations.
Capitalize on competitor's weaknesses and target the market opportunities
available to them.
Scout for potential acquisition targets, with detailed insight into the
companies strategic, financial and operational performance.
Compare your companys financial trends with those of your peers /
competitors.
They should promote safety in the workplace and progressive human
resource practices; they benefit their employees, who are essential to their
success.
ECLP channel network is working; all company policies and information
should be shared with employees that are why they are going success.

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The core values of Engro should be as follows for decision
making:

Safety, Health & Environment

Leadership
Teamwork & Partnership
Diversity & International Focus
Quality & Continuous Improvement
Ethics & Integrity
External Community Involvement
Candid & Open communication
Innovation
Individual Growth & Development
Enthusiastic Pursuit of Profit
Enjoyment & Fun

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Reference
Awais Mushtaq

Zonal Marketing Manager

53-D New Muslim Town Lahore

http://engro.com/

http://www.hrmars.com/

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