Fertiliser sector output falls to 71% of capacity

Plants on SNGPL network produce at a dismal 31%.

LAHORE: 2011 was the worst year for domestic fertiliser plants as they produced just 4.9 million tons of urea against an installed capacity of 6.9 million tons due to announced and unannounced gas shortages. SNGPL based fertiliser plants were the worst hit and managed capacity utilisation of just 31%.

Currently, all four fertiliser plants on the SNGPL network are facing a complete shutdown, which has resulted in a huge production and financial loss to these fertiliser plants.

The Dawood Hercules plant achieved capacity utilisation of 39% of capacity, PakArab produced 27% of capacity, Agritech’s output was 34% of capacity and Engro’s new Enven plant managed to achieve 27% of capacity.

CEO Dawood Hercules Fertilizer, Rashid Lone said that SNGPL based plants could only produce 31% of their installed production capacity which resulted in billions of rupees of loss to the fertiliser industry which has invested over $2.3 billion in enhancing its production capacity in last three years.

The government has had to import 1.45 tons of urea at a cost of $783 million and has also paid Rs54 billion subsidy to maintain the price parity with locally produced urea.

Published in The Express Tribune, February 28^th, 2012.