Fertilizer business profitability expanded over 20% over the last year primarily due to higher urea domestic offtake and exports amounting to 1,739 KT and 223 KT respectively, further augmented by regularization of gas prices for Plant 1 post allocation. The business continued to operate both of its plants due to continued gas availability. However, the domestic industry continues to face challenges in the guise of subsidy accumulation and long lead time in its disbursements. During the year, the business also created a footprint in the Seeds and Pesticides business and is also evaluating other businesses in the Agri space.

Polymer business profitability tripled as compared to last year. The dynamics of vinyl segment turned favorable due to improving international dynamics coupled with strong demand offtake in the country. Ethylene procurement remained challenging during the year as the primary supplier had declared force majeure in 2017, limiting supplies. Since the business had diversified its supplier base, it was able to procure ethylene from the international market and continue to run smooth plant operations. Reliable plant operations along with efficiency ratios supported the bottom line and shareholder value.

Within our Energy sector assets, the Qadirpur power generation plant steadily performed in line with expectations. However, circular debt continues to be a persistent problem in the domestic energy sector. In partnership with the government, the Thar coal mining and power generation projects are progressing ahead of their schedules and are expected to remain on track for completion by June 2019 to help resolve the energy crisis in the country.

Elengy Terminal handled 70 cargoes during the year as compared to 44 cargoes during the last year. The availability factor remained at 97.64% for the year. The business successfully executed an Amendment Agreement to the LNG Operations and Services Agreement with Sui Southern Gas Company Ltd (SSGCL) during the year for the increased quantity of gas amounting to 200 MMSCFD which SSGCL had started utilizing from January 2017.

  • 44 cargoes2017
  • 97.4%Availability factor 2017

Engro Vopak Terminal recorded a modest volumetric increase of 5% for chemicals and LPG handled over last year, which is mainly attributable to higher imports. During the year, the terminal successfully installed phosphoric acid pipeline resulting in an improved jetty occupancy. Further, the business completed 20 years of safe operations without lost work injury in November 2017.

  • 5%volumetric increase

Engro Foods’ profitability decreased from last year owing to continuous decline in the Specialized Tea Creamer category due to the cost pressures following the tax legislative changes announced in the previous year, followed by price increases placing the business at a disadvantage to loose milk. Further, competition has also been intensifying in the recent past with the entry of multiple players on the back of discounting, especially in rural areas.

An increased focus on the rice business followed by business restructuring, fixed costs rationalization, improvement in operational efficiencies and reducing commodity price risk exposure resulted in significantly lowering its losses. The business achieved an 82% increase in the quantity of rice processed over last year. The business exported 11,950 tons of rice during 2017, an increase of 33% year-on-year.