While it may seem an obvious objective for a big business to generate a profit and make money for shareholders, Shafqaat Ahmed, Chief Executive and Managing Director
of Fauji Fertilizer Company (FFC), believes there should be more to a company than that. Pakistan-based FFC is more than 44% owned by the Fauji Foundation, a charitable trust that supports welfare projects across the country.
"The Fauji Foundation basically concentrates on improving education and health facilities," Shafqaat explains, "starting from smaller-sized schools to universities and medical colleges and, on the health side, basic health units right up to hospitals. Because we are supporting a foundation and a particular cause, I often say we are doing business for a purpose."
Entering one of Pakistan's best-performing sectors
A former Lieutenant General in the Pakistan Army – whose military services included commanding a strike corps and serving as Military Secretary to Pakistan’s then-President Pervez Musharraf between 2005–08 – Shafqaat decided to enter the petrochemical industry as it was one of Pakistan’s best-performing sectors.
Shafqaat wanted to bring about more efficiencies, find new ways of doing business and tap into opportunities for diversification. "I thought it would be a very interesting challenge," he reflects.
FFC’s core business is the manufacturing of urea fertiliser, which is sold through its Sona brand. It has three urea plants: granular urea; a joint venture phosphate plant in Morocco; and a DAP/urea manufacturing complex, Fauji Fertilizer Bin Qasim. The company has the capacity to produce more than two million tonnes of urea a year and is considered the largest urea producer in Pakistan.
When Shafqaat took up the position at FFC, he worked on improving the company’s performance. "We carried out comprehensive reviews of every department to find out where we could bring about greater efficiencies and reduce costs," he recalls.
With some new measures in place, Shafqaat and his team were able to considerably bring down fixed costs. The year 2016, in particular, was a stellar year for production. "We had the highest ever production at the three plants in the history of the company," Shafqaat says proudly.
"We produced about 2.523 million tonnes of urea, whereas our previous record was 2.485 million tonnes in 2010. We concentrated on reducing the cost of production per tonne for urea and we significantly brought that number down. Our plants have been operating at more than 120% efficiency and their downtime has been kept to the minimum possible."
In line with his ‘business with a purpose’ philosophy, Shafqaat ensures farmers are properly maintaining their crops by providing a range of agricultural services free of charge.
An appreciation for the farmers
"Farmers are very important to us," he notes. "We’ve got something like five farm advisory centres in different parts of the country. Below them, there are also approximately 30 agri-territories, where we provide advice to farmers on how to grow their crops, and on economical agricultural practices.
We have a free service for soil and water testing, and we organise seminars where farmers can learn how to improve their farming practices and grow better crops. We advise them on the kind of nutrient mix they need for their soil. In some cases, we might even recommend a product that we ourselves don’t produce, but know their land needs.
We also organise seminars where farmers can learn how to improve their farming practices and grow better crops."
Fertiliser is not the only area FFC is involved in. Its reach spreads across the renewable energy sector, through its wind power project; the food sector, with Fauji Fresh n Freeze products; the construction industry, with its Fauji Cement associate; and in the financial services sector with Askari Bank. The next stage for Fauji Fertilizer is to continue to grow and diversify, with a couple of projects in the works.
"First, we are planning to set up a fertiliser plant in Tanzania as part of an international consortium," Shafqaat says. "We are at a fairly advanced stage of making that happen. It is a joint venture and we are working things out with the Tanzanian government. Second, we have strategic reserves of coal in the southern part of Pakistan and they have been largely untapped. So now there is a plan to set up a coal-based power plant with the requisite state-of-the-art technology, taking into account the environmental benchmarks and keeping those under control."