from esso to engro
In 1957, the search for oil by Pak Stanvac, an Esso/Mobil joint venture led to the discovery of the Mari Gas field near Daharki – a small, remote area in Upper Sindh province at the time. Esso proposed the establishment of a urea plant in that area which led to a fertilizer plant agreement signed in 1964. In the subsequent year, Esso Pakistan Fertilizer Company Limited was incorporated, with 75% of the shares owned by Esso and 25% by the general public.
The construction of a urea plant commenced at Daharki in 1966 and production began in 1968. At US $43 million with an annual production capacity of 173,000 tons, it was the single largest foreign investment by a multinational corporation in Pakistan at the time.
A full-fledged marketing organization was established which undertook agronomic programs to educate the farmers of Pakistan. As the nation’s first fertilizer brand, Engro (then Esso) helped modernize traditional farming practices to boost farm yields, directly impacting the quality of life not only for farmers and their families, but for the nation at large. As a result of these efforts, consumption of fertilizers increased in Pakistan, paving the way for the Company’s branded urea called “Engro”, an acronym for “Energy for Growth”.
As part of an international name change program, Esso became Exxon in 1978 and the Company was renamed Exxon Chemical Pakistan Limited. The Company continued to prosper as it relentlessly pursued productivity gains and strived to attain professional excellence.
In 1991, Exxon 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 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 financial performance, growth of the core fertilizer business, and diversification into other businesses.
Along the way, a major milestone in plant capacity upgrade coincided with the employee led buy-out; innovatively optimizing our resources, Engro relocated fertilizer manufacturing plants from the UK and US to its Daharki plant site – an international first.
In 2002, the renowned Dawood Group became the patron shareholder of Engro Chemical Pakistan Limited. Soon thereafter, the Company started a journey of venturing into other sectors including foods, energy, industrial control and automation, PVC resin manufacturing and marketing, and chemical terminal and storage.
Engro Chemical Pakistan Limited then started a journey of venturing into other sectors including foods, energy, industrial control and automation, PVC resin manufacturing and marketing, and chemical terminal and storage.
In 2009 plans were announced of demerging the fertilizer business into an independent operating company. The expansion and growth in the company necessitated a change in the way the company operated and conducted business. Keeping in view the operations of multi category businesses, expansion strategy and growth vision, the management decided that the various businesses would be better served if the Company was converted to a holding company. As a result it was decided to demerge the fertilizer business and establish a holding company structure to manage the affairs of various businesses.
Engro Fertilizers Limited was incorporated in June 2009 to manage the fertilizer business post demerger. The demerger required the approval of the High Court of Sindh, which was granted on December 9, 2009 after obtaining the requisite approvals from the creditors and shareholders of the Company. The demerger became effective from January 1, 2010. Consequently, all fertilizer business assets and liabilities have been transferred to Engro Fertilizers Limited against the issue of shares to the Company.
To reflect the change in the scope of mandate and scale of operations, Engro Chemical Pakistan Limited was renamed as ‘Engro Corporation Limited’ with effect from January 1, 2010. Engro Corp, as the holding company is responsible for the long term vision of the company, overseeing the performance of the subsidiaries and affiliates, 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.
Engro Corp will maintain a lean structure with a focused scope, allowing maximum empowerment to the subsidiaries and affiliates to drive the operations of their respective organizations.