Engro Corp president throws weight behind agriculture relief package

Says government subsidy is the way to aid helpless farmers

KARACHI: The best way to help farmers who have helplessly seen their earnings squeeze in the aftermath of a fall in commodity prices is through direct government subsidy, said Engro Corporation President Khalid Siraj Subhani on Tuesday.

“The government has already announced a package and if you ask me then I think this is the way forward,” he told journalists, speaking on the sidelines of an event held to mark Engro’s golden jubilee celebration.

His remarks came in response to a question that representatives of growers want government interference in high-cost inputs like fertiliser.

Engro is one of the largest urea manufacturers, which has seen a continuous rise in profits over the years.

“It’s wrong to say that our margins are very good,” he said. “You must also look at the kind of investment, capital allocation, that we have made and the risks that have been taken.”

Subhani said profits of even all fertiliser makers put together account for just a small part of Pakistan’s agriculture-equation.

“Even if 100% of the profits of manufacturers are passed on to the farmers, it wouldn’t make any difference.”

All stakeholders must come onto the table to find a solution to the issues inflicting the farm sector, he said.

About the gas shortage at its fertiliser plant, which has cost Engro heavily in the past, he hoped the episode won’t be repeated.

“Engro is working on a strategy with the government to address that. We have certain plans but I cannot share details at the moment,” he said.

Engro Fertilizer’s 1.3 million-tons-per-year Enven urea plant, built at a cost of over $1.1 billion, is running on a lifeline of 60 million cubic feet per day (mmcfd) of gas up till December 2015.

“It would be a loss for the country if gas is curtailed,” he said.

But in the backdrop of the 50-year history, which Subhani traced through major events like the employee buyout in 1992, the gas problem would appear to be just another commercial challenge.

Despite the growth that has taken Engro from fertiliser to chemicals, food, power generation, energy import and even into coal mining - he said expansion would continue.

“We have a long-term strategy that focuses on food and energy. A dynamic organisation like Engro must continue to grow,” he said.

The event was specifically arranged for media and no senior Engro executive, barring Subhani, was in attendance.

Published in The Express Tribune, September 30^th, 2015.

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