Engro Corp’s latest CEO denies rumours of internal rift

Tales of disagreement within company not true, according to Subhani

KARACHI:

Unlike the exit of Asad Umar from Engro Corporation as its president and CEO amidst a fanfare of trumpets in 2012, the recent resignation of his successor, Aliuddin Ansari, was surprisingly a muted affair.

Ansari chose to remain inaccessible to journalists for comment between the announcement of his resignation on April 22 and his last day as president and CEO of Engro Corp on May 11. There were no press interviews or media appearances, as reporters were consistently stonewalled for requesting access to the outgoing CEO.



Avoiding the press was un-Engro-like. After all, it is a company that survived, at least in part, an “imminent loan default,” “low employee morale” and “severe performance issues across the company’s flagship businesses” because of its exemplary media management amidst prolonged natural gas closures around Umar’s early retirement in 2012.

Regardless of the reasons for the sudden change of attitude towards the press, the fact remains that the unexpected exit of Ansari from Engro Corp fuelled rumours about possible rifts among the company’s board members.

“(Ansari) is out of the country and I can’t comment on his behalf. But he had come in for a finite period of time. He wanted to step down (after the completion of his three-year term) and do other things in life. He really changed things around at Engro,” said Khalid S Subhani, who replaced Ansari as Engro Corp’s president and CEO on May 11, while speaking to The Express Tribune in a recent interview.

The stock market was abuzz. Tales of Ansari’s disagreements with a majority shareholder of Engro Corp over the future course the company should take made the rounds.

Other reports suggest Hussain Dawood, who serves as chairman of both Engro Corporation and Dawood Hercules Corporation, wants his businesses to focus solely on energy and agriculture verticals – a strategy that Ansari did not reportedly agree with.

Subhani said the Engro Corp board of directors offered Ansari a second three-year term as president and CEO, which he did not take. Subhani also denied the existence of any disagreements over the strategic direction of the conglomerate among board members.

“You create value when you expand. You encash some of that value and deploy that money somewhere else,” he said, adding that businesses that people would invest in blindly 10 years ago might not be attractive anymore due to changed fundamentals.

In response to a question about any upcoming changes or restructuring in Engro Corp, Subhani said no major reshuffle is on the cards for the time being.

A veteran

After a very short stint at another company, Subhani joined Engro Corp, previously known as Exxon Chemical Pakistan, in 1983 with a degree in chemical engineering from NED University of Engineering and Technology.

Rising through the ranks, Subhani finds himself at the helm of the Rs176-billion-company 32 years on. “I think my career was managed very well here. As a result, I have spent more or less my entire (professional) life at Engro Corp,” Subhani said, adding his lifelong association with the company included stints in the United States, United Kingdom and Canada.

Unlike the last two CEOs of Engro Corp who started off their careers as business analysts, Subhani comes from a non-finance background. But he says he practically left engineering 20 years ago when he stepped into senior management roles.

Although Engro Corp has suffered greatly because of the government’s inconsistent energy policy in the past, the conglomerate continues to be heavily reliant on its fertiliser segment to date.

Engro Fertilizers contributed over 84% to the holding company’s consolidated after-tax profit of Rs3.6 billion in the first quarter of 2015. “Investments already undertaken cannot be undone … fertiliser and food businesses have grown rapidly, but we are trying to diversify,” Subhani said, adding that the company’s ‘bad patch’ in the relationship with the government was finally over.

“I am fortunate that I have become CEO when everything is going our way. The company is on the right track,” he said.

the writer is a staff correspondent.

Published in The Express Tribune, June 15^th,  2015.

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