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Group Members

Tania Munir Baig Arsalan Khan Ahmed Safwan Hassan Aslam

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Introduction to the Company:

Fauji Fertilizer Company Limited (FFC) is the largest fertilizer producer in Pakistan with around 60% urea market share in the country. FFC was established in 1978 as a joint venture between Fauji Foundation, Pakistan and Haldor Topsoe A/S, Denmark. The first ammonia - urea complex was commissioned in 1982. De-bottlenecking of Plant-1 in 1992, establishment of a 2nd plant in 1993 and acquisition of a 3rd plant is 2002. FFC now 5/23/12

Fauji Fertilizer Bin Qasim Limited, Karachi, Pakistan (FFBL) is another company where FFC has controlling shares it produces 1670 MTPD of granular urea plus 1350 MTPD DAP. Today, FFC is also emerging as a player in the spheres of manpower training and turnaround services provider, especially within Pakistan and in the Middle East.

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They have experience of more than 21 maintenance turnarounds and 23 million man hours of safe operation. We also offer turnaround inspection services including NDT, machinery diagnostics, infrared thermography etc.

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Company Profile:

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. Initial share capital of the company: 813.9 Million Rs. Present share capital of the company : Above Rs. 8.48 Billion. Additionally, FFC has more than Rs. 8.3 Billion as long term investments which include 5/23/12 stakes in the subsidiaries FFBL, FFCEL and

Commencement of commercial production of urea in 1982 with annual capacity of 570,000 metric tons. 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.

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Products:

1)Sona Urea 2) DAP 3) FFC SOP 4) Sona Boron

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Services:

Fauji Fertilizer Company Limited services are now available for the Chemical Process Industry due to its dedicated team of engineering specialists with rich experience. FFC has been providing Agricultural Advisory Services to the farming community throughout Pakistan since 1981, for increasing the agriculture production in general and the farmers 5/23/12

Vision:

In a nation of increasing population, we believe there is substantial opportunity of growth for FFC in the years to come. FFC's vision is to play a leading role in the industrial and agricultural advancement of the country pursuing new growth opportunities offering the convenience of multiple products, brands and channels within and beyond the territorial limits of Pakistan, to the benefit of our customers and our shareholders, elevating our image 5/23/12 socially responsible and ethical as a

Mission:

Our mission is to stand above the competition and provide our customers with premium quality fertilizer products in a safe, reliable, efficient and environmentally sound manner, deliver exceptional services and unparalleled customer support, produce predictable earnings for our shareholders, and provide a dynamic and challenging environment for our employees.
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Ratios:

1.Gross profit to sales Gross profit/sales *100 2010: 19,563,953/44,874,359*100 (Rupees 000) = 43.59% 2011: 34,349,409/55,221,168*100 5/23/12

Interpretation:

The gross profit to sales ratio shows the profit made by every rupee of sale as a percentage. The percentage in 2010 was 43.59% which was 18.64% less than in 2011.This increase was caused by the increase of the gross profit which could be due to a decrease in cost of sales also this increase would have caused due to the increase in sales which is also 5/23/12 evident

2. Gross profit to cost of sales

Gross profit/cost of sales *100 2010: 19,563,953/25,310,406 (Rupees 000) =77.29% 2011: 34,349,409/20,871,759 *100 = 164.57%
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Interpretation:

This ratio shows the percentage of profit in terms of cost of sales. This ratio drastically increased in 2011to 162.57% from 77.29% in 2010. This might be due to a decrease in cost of sales and also a great increase in gross profit showing good performance of the company in a years time.
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3.

Gross profit per unit :

Total gross profit/number of units sold Total gross profit/number of units sold 2010: 19,563,953/ : Rs.724.6/unit 2011: 34,349,409/
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This is the ratio that tells us the profit that we are going to be calculating and receiving from the sale of any one unit of our product. We have seen that due to the price hike, and because the profit margin has increased, the profit is more than it was previous year.
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4. Inventory turnover

Cost of goods sold/average inventory Average inventory = opening balance inventory + closing inventory/2 2010: 25,310,406/211,720 (Rupees 000) =119.54 times 2011: 20,871,759/ 636,923

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Interpretation:

The inventory turnover ratio tells us the number of times the average inventory pays off our cost of sales. In this case the ratio decreased drastically in 2011. This can be due to the increase in average inventory held which decreased the number of times of the payment
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5. Inventory turnover in days:

(Inventory*days)/Cost of Goods Sold 2010: 423440*365/25,310,406 : 6.106 approx 6 days 2011: 1273846*365/20,871,759 : 22.27 approx 22 days
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Interpretation:

The degression in the days that it takes to convert the inventory from the raw material to the finished product is basically because of the fact that the company is now taking more time making the product. This could be due to the fact that the company is overhauling the production line and also making sure that the product that you are creating is up to the mark so that quality should be maintained while losses can also be cut.
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6. Income to sales ratio:

Net Income / sales * 100 2010: 11028849/44874359 *100 : 0.2455 * 100 : 24.57 2011: 22492053/55221168 *100 : 0.40730 * 100 : 40.73
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Interpretation:

This ratio basically tells us about the percentage of income that we generate from every 100$ of sales that we make, basically this ratio is used to gauge the performance of the company and how efficiently it manages it resources. This ratio also tells us about the profitability of the company
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7. Income/unit cost:

Net Income / No. of units sold Net Income No. of Units Sold 2010: 11028849/27000: Rs.408.47/ unit 2011: 22492053/24893
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:Rs.503.55/ unit

Interpretation

This ration basically tells us about the portion of the income that is kept in every unit cost. We see that the income in the unit cost has increased over the period of one year, this means that the company is keeping a greater profit margin.

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