KARACHI

STAFF REPORT

THE fertilizer sectorfaced yet another yearof dismal performancedue to what marketobservers said was anunprecedented cut inthe supply of gas.

The SNGPL based fertilizer plants lostproduction by 89 percent during thecalendar year 2012, said a spokesman ofthe Fertilizer Manufacturers of PakistanAdvisory Council (FMPAC).Out of total production capacity of over 2.2million tons, the SNGPL based fertilizerproducing units produced only 256,500tons of urea, the lowest ever production bythese fertilizer plants in the history of thissector. “Producing only 11.6 percent ofthe total urea production capacity ofSNGPL based fertilizer plants shows theworst ever gas curtailment being faced bythe fertilizer plants in the country,” thespokesman said.The combined urea production figures arealso very dismal as the whole fertilizersector on SNGPL as well as Mari networkonly produced 4.1 million tons of ureacompared to 4.8 million tons it producedlast year against an installed capacity of6.9 million tons.The overall production loss of 2.8 milliontons in a year has never been witnessedbefore. Currently, all four fertilizer plantson SNGPL network are facing a completeshutdown, which has resulted in severeproduction and financial losses for thesector. Four Fertilizer Plants on theSNGPL network including Pakarab,Dawood Hercules, Engro’s new plant andAgritech remained the main victims of thechaotic gas situation in the country.Year 2011 and 2012 have been the worst

years for fertilizer sector. Instead ofproviding gas to local fertilizer plants toproduce economical and affordable ureadomestically, the government preferred toimport Urea by spending a hefty amount ofover $ 1 billion from precious foreignexchange. The spokesman said fertilizersector has been witnessing a steep fall in itsproduction as it produced 5 million tons ofurea in 2009 against a capacity of 5 million,5.15 million tons against 5.6 million tons ofcapacity in 2010, 4.9 million tons against6.9 million tons capacity in 2011 and finally4.1 million tons against the total productioncapacity of 6.9 million tons in 2012.According to the FMPAC spokesman,despite the unprecedented gas curtailmentin the last two years, domestic ureamanufacturing plants have provided Rs365 billion benefit to farmers over the last

5 years, by keeping local urea pricessignificantly below international levels. Hesaid there is a misconception that fertilizermanufacturers enjoy raw material subsidyfrom the government in the form ofreduced feed gas prices. This subsidy isnot for the manufacturers, but is in factpassed on to the farmer via reducedprices, he said. Based on current feed andfuel gas prices, subsidy per bag of ureaworks out to be Rs 228 per bag. Inessence if government subsidy on gasprice was taken away, urea prices wouldonly increase by Rs 228 per bag.On the other hand, difference betweenprice of domestic and international urea ismore than Rs 1,000 per bag. Therefore,he said that not only is the fertilizerindustry passing on feed gas subsidy tothe farmer, it is also passing on a much

larger benefit voluntarily in addition topaying taxes to government.He said that of the total urea priceincrease in the last two years, about 80percent has resulted from imposition ofGST on urea and general inflation. Only20 percent of the price increase is due togas curtailment because the governmentdid not honour its gas supply contractswith fertilizer manufacturers despite thefact that the industry has recently invested$2.3 billion in the country based on thegovernment approved policy designed toencourage investment in the sector.The FMPAC spokesman said thegovernment has also incurred significantlosses by importing urea worth over $ 1billion and providing subsidy of over Rs 50billion on imported urea in the last 2 years.Urea is the most expensive form of energy

that is imported costing around$23/MMBTU, whereas RFO and LNGwould be 30-50 percent less expensivethan urea on a MMBTU basis, he added.He said that government must realize thatagriculture contributes around 24 percentto the GDP of Pakistan and it alsoprovides raw materials to all majorindustries of Pakistan including, textilesand sugar. For the economy of Pakistan toprosper, it is important for agriculturalyields to go up which is only possiblethrough the application of fertilizers in theright quantity at the right time, he said.The decline in urea production poses asevere threat to crops yield and thus thecountry might miss its agriculture andexport targets and further risk the foodsecurity of the country by depending onimported food items.

THE DECLINE IN UREAPRODUCTION POSES ASEVERE THREAT TO CROP YIELD

PLANTS PRODUCE 0.25MTONS UREA AGAINST2.2M TONNESPRODUCTION CAPACITY!

Gas supply to textile industries in Faisalabad is not

available which has caused export orders and production

jobs to pile up: FCCI President Zahid Aslam

BUSINESS

BFriday, 1 February, 2013

sbP further CutsrefiNANCe rAte KARACHI: The central bank has decidedto cut the rate of refinance under theExport Finance Scheme (EFS) by 0.1percentage point from February 1(today).This is the second rate cut announced bythe State Bank of Pakistan (SBP) in amonth. Earlier, it had reduced therefinance rate by 0.2 percent.“It has been decided that the rate of

refinance under the Export FinanceScheme applicable from February 01,2013 and onward will be 8.20 percentp.a. till further instructions,” said theState Bank on Thursday.The central bank, through a circular,asked commercial banks to ensure thatwhere financing facilities were extendedby them to the exporters for availingrefinance facilities under the EFS, theirmaximum margin/spread does notexceed 1 percent per annum.The SBP circular said the revisedreduced mark-up rate would also beapplicable on outstanding loans grantedunder EFS. Accordingly, the SBP advisedbanks to immediately re-price theiroutstanding loans granted under the EFS,keeping in view the revised reducedmark-up rate. Simultaneously, SBP-BSCoffices would also apply reduced mark-upon outstanding refinance loans grantedunder EFS. To reconcile the position ofre-priced loans, the banks should submitparticulars of outstanding loans re-pricedby the bank under EFS on the prescribedformat to the concerned SBP-BSCoffice(s) within 10 days from January 31. STAFF REPORT

ISLAMABAD

APP

The government has decided to provide 50 percentsubsidy on plants and machinery for establishingprocessing plants for meat, fruits, vegetables,dates and olives in Balochistan, Gilgit Baltistan,FATA and Khyber Pakhtunkhwa.Commerce Minister Makhdoom Amin Fahim whoannounced the TradePolicy (2012-15), said that a big quantity of fruitsand vegetables produced in Gilgit Baltistan iswasted due to lack of processing plants andfacilities and the long distance from major urbancenters. This wastage reduced income for the farmers ofthis region, he added.

He said Pakistan is the 4th largest producer ofdates with excellent quality of dates being grown inthe areas of Khairpur, Dhakki, DI Khan, DG Khan,Turbat, Pungor and Washak but only 13 percent ofthe total produce is exported. Similarly, growing and processing of olives in KP,FATA and Balochistan have great potential. He said meat and meat preparations exports havegrown significantly in the last few years and stoodat $175 million in 2011-12. However, more space exists for export of meat tothe adjoining countries, he added. “To promote food processing and encourageinvestment and value addition in this region, thegovernment has decided to provide 50% subsidyon cost of processing-plants and machinery forfruits and vegetables,” the minister said.

Gas shortage curtailssNGPl-based

urea plantsoutput by 89pc

APCNGA holds dr Asim

resPoNsible for

eNerGy Crisis

ISLAMABAD: The All Pakistan CNG Association

(APCNGA) on Thursday held Advisor to Prime Minister

on Petroleum and Natural Resources Dr Asim

responsible for the energy crisis which has resulted

in economic downturn, sluggish growth and massive

unemployment. Energy crunch will remain a serious

challenge confronting the country unless the

incompetent Advisor Petroleum is removed, said

APCNGA Chairman Supreme Council Ghiyas Abdullah

Paracha. Speaking at a press conference, he said the

artificial crisis of gas should be settled immediately,

restoring supply to industries and CNG filling stations

across Punjab according to the former schedule

otherwise they would launch a countrywide protest

movement from February 2. He said the APCNGA will

start its protest from Bahawalpur which would be

followed by a protest in Multan and Vehari on

February 3 while a rally would be taken out in

Faisalabad on February 4, in Gujranwala on February

5 and afterwards in Lahore, Rawalpindi and Karachi.

Paracha warned that sit-ins would be staged in

Lahore and Islamabad on February 10th if authorities

fail to accept the legitimate demands of the CNG

sector. He said the incompetence of Dr Asim had

paralysed the whole country and the critical energy

sector which has caused closure of hundreds of

thousands of businesses and left millions of poor

jobless triggering multiple social problems in this era

of double digit inflation. The leader of the CNG sector

added the LPG-air mix and LNG import projects are

scams of bigger magnitude having far more serious

repercussions than the infamous Rental Power

Projects in which the nation was deprived of billions.

The moves regarding liquid gas have been initiated to

benefit a few influential and crook businessmen at

the cost of the country which should not be tolerated,

he said. Reposing full confidence in the private sector

energy experts, Paracha said the energy crisis can be

resolved within a few months if a high-powered

committee is formed having full representation of the

private sector. NNI

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Major Gainers

COMPANY OPEN HIGH LOW CLOSE CHANGE TURNOVERNestle Pakistan Ltd. 4928.43 5170.00 4972.00 5170.00 241.57 5,360Rafhan Maize Prod. 3485.00 3550.00 3550.00 3550.00 65.00 20Colgate Palmolive 1450.00 1500.00 1499.99 1500.00 50.00 150Bata (Pak) 1350.00 1384.99 1384.99 1384.99 34.99 150Millat Tractors Ltd. 594.02 623.72 596.00 623.72 29.70 151,600

Major LosersIndus Dyeing 670.20 662.00 636.69 662.00 -8.20 500Gillette Pak 150.00 150.00 143.00 143.00 -7.00 1,500Blessed Tex. 109.40 114.50 103.93 103.93 -5.47 5,000Wyeth Pak Limited 920.00 915.00 915.00 915.00 -5.00 50Pak Services 159.41 166.00 155.00 155.01 -4.40 3,600

Volume Leaders

Maple Leaf Cement 17.78 18.25 16.85 17.05 -0.73 43,938,000Fauji Cement 7.82 8.24 7.75 8.01 0.19 28,152,500Telecard Limited 4.02 4.24 3.57 3.66 -0.36 23,081,500K.E.S.C. 5.88 6.32 6.01 6.07 0.19 18,264,500Lotte PakPTA 7.12 7.51 7.13 7.46 0.34 17,908,500

Interbank RatesUSD PKR 97.7323GBP PKR 154.7004JPY PKR 1.0739EURO PKR 132.5152

Dollar EastBUY SELL

US Dollar 98.90 99.60 Euro 132.93 134.67 Great Britain Pound 154.99 156.98 Japanese Yen 1.0710 1.0842 Canadian Dollar 97.56 99.46 Hong Kong Dollar 12.51 12.74 UAE Dirham 26.75 27.05 Saudi Riyal 26.25 26.49

KARACHI: Tahir G Sachak, CEO of Life Insurance

Limited, receives plague from Kaukab Iqbal, chairman

Consumer Association of Pakistan. STAFF PHOTO

AAml CoNveNes GeNerAlmeetiNG of AtffCertifiCAte holdersKARACHI: Atlas Asset Management Limited, the

management company of Atlas Fund of Funds

(the Fund), a closed end fund managed by the

Company, convened the General Meeting of

Certificate holders of the Fund on January 30, as

required under the provisions of Regulation 65 of

the NBFC Regulations, 2008. The trustees of the

Fund, MCB Financial Services Limited, were also

present on the occasion. Briefing the Certificate

holders, the Chief Executive Officer, Mr. M.

Habib-ur-Rahman stated that as per the law,

both the options for the future course of the

Fund, i.e. revocation and winding up of the Fund,

or conversion of the Fund into an open end

scheme, had been notified to them. Atlas Fund of

Funds, he added, was a unique closed end fund

which held its IPO in December 2004, at a time

when various closed end funds were then trading

at a discount to NAV of between 30% to 40%,

and its main objective was to invest in other

closed end funds and avail the benefit of discount

to NAV. Additionally, such objective also resulted

in an attractive dividend yield. Responding to the

questions from the Certificate holders, the CEO

added that as the category of closed end funds

would ultimately become redundant after all the

existing closed end funds would either convert

into open end funds, or go through revocation

and winding up, hence, the objective of

launching Atlas Fund of Funds had been largely

achieved, and the first option offered to the

Certificate holders by the management company

was that of revocation and winding up, which

was different from the other closed end funds

also presently conducting this exercise of

convening certificate holders/ shareholders

meetings. PR

etihAd AirwAys wiNs‘AirliNe brANd of theyeAr’ AwArd

KARACHI: Etihad Airways, the national airline of

the United Arab Emirates, has bagged the ‘Airline

Brand of the Year Award’ recently organised by the

Brands Foundation here at a local hotel. The award,

which is one of the highest honors bestowed in the

business and corporate communities in Pakistan,

was awarded to the airline due to its popularity,

strong company profile and commitment to its

customers as shown by nationwide surveys. The

Brands Foundation, a public company monitored by

the government of Pakistan, organizes the award

annually with an aim to promote healthy

competition among local, national and multinational

brands operating in the country. PR

‘mobiliNk busiNess’iNtroduCes NewPArAdiGm iN busiNessCommuNiCAtioNsLAHORE: Mobilink has launched a new service

division, ‘Mobilink Business’, aimed at addressing

the connectivity needs of businesses across

Pakistan. As part of Mobilink’s new business model,

management and owners of businesses will be

empowered to customize their cellular and

enterprise services to suit their business and

budgetary needs. Mobilink Business offers a

unique portfolio of ‘Mobility Solutions’ that will

enable entrepreneurs, professionals, SMEs and

large business concerns to enjoy increased control,

value and flexibility over their business

communications. Business managers will now be

able to tailor solutions by selecting their preference

of numerous Mobilink services that are unique to

their needs. Bilal Munir Sheikh, Chief Commercial

Officer, Mobilink, emphasized, ‘Mobilink has always

been innovative when it comes to the needs of our

customers across Pakistan. We believe in going

beyond business to change the way businesses

manage their communications needs. Mobilink

Business is another milestone in the history of

Pakistan’s cellular industry that will change the

paradigm of how businesses manage their

connectivity needs.’ PR

roots milleNNiumsChool Gets ‘brANd ofthe yeAr 2011-2012’

ISLAMABAD: Roots Millennium Schools-RMS,

Pakistan won the most prestigious,

progressive; best ranked, valued and highly

rated award locally and globally, the ‘Brands of

the Year Award 2011 – 2012’, in the category

of ‘Education’. The expert panel Brands

Foundation, and a committee consisting of

Governors, academics, Chief Ministers,

University Chancellors, business and

community Bosses nominated Roots

Millennium Schools, Pakistan for this award

with an overall ‘Category A’ in the light of a

reliable survey conducted by the Brands

Foundation. In the view of the expert panel

recommendations, qualitative & quantitative

study reports show that Roots Millennium

Schools, Pakistan has successfully secured the

highest rating in the category of Emerging

Education System and has met all applicable

requirements of the selection criteria laid

down by the Brands Foundation for BRANDS

OF THE YEAR AWARDS. Brands Foundation has

the legal mandate to conduct brands audit,

qualitative study, quantitative survey, market

analysis & brands rating in Pakistan. The

Award Ceremony was conducted at Marriott

Hotel, Karachi where the Chief Guest Finance

Minister Hafeez Sheikh endowed this award to

the Roots Millennium Schools. Abid Hussain –

General Manager Roots Millennium Schools,

Pakistan received this award on behalf of CEO

Roots Millennium Schools Chaudhry Faisal

Mushtaq. PR

CORPORATE CORNER

The country is facing a challenging economic outlook, as GDP

growth in the current financial year is projected to be in the

3-3.5 percent range against a target of 4.2 percent: Asad Umar

BUSINESS BFriday, 1 February, 2013

KARACHI: Dawlance launched their new automatic washing machine at a ceremony on Thursday. Staff Photo

KARACHI

STAFF REPORT

WHILE dealing with financialservice providers, Pakistaniconsumers face problemsranging from irresponsiblelending practices to unfair

contracts, abusive charges and advices bysalespeople that lack objectivity.“Despite the fact that Consumer ProtectionDepartment at the State Bank and theBanking Ombudsman entertain complaintsfrom consumers, grievances redressal is notsatisfactory,” said Consumers Association ofPakistan (CAP) Chairman Kaukab Iqbal onThursday while addressing the 4th FinancialServices and Consumers Conference.The conference was organised by theConsumer International-backed CAP at alocal hotel with Deputy Governor State Bankof Pakistan (SBP) Kazi Abdul Muktadir as thechief guest.President and CEO Silkbank Azmat ShahzadAhmed attended the moot as a guest ofhonour. Kaukab said financial institutions inPakistan had a target-oriented approach toget more clients rather than facilitating andsatisfying their consumers with betterservices. He slammed banks and otherfinancial institutions for fleecing theircustomers under various fictitious heads.

“Service providers use technical marketingpractices to trap customers and lack ofinformation leaves consumers hapless,” theCAP chief said. He also deplored a lukewarmresponse to customers’ complaints by theBanking Ombudsman which, Kaukab claimed,had resolved only 362 of the 1,047 complaintsreceived during 2010. The CAP chairmanurged the SBP, Banking Ombudsman and theCompetition Commission of Pakistan toaugment their mechanism through keeping avigil eye on the delivery of services by thefinancial institutions, especially in the ruralareas. Elaborating on the consumers’doubts about the religious status of Islamicbanking in the country, Kaukab stressed theneed for community learning andunderstanding towards the distinguishingfeatures of Islamic banks.

CAP slams regulators,financial institutions

NoN-textile exPorts

Grow to 48%: fAhim

ISLAMABAD: The share of non-textile sector

exports has risen from 36.5 per cent of total

exports in 2006-07 to 48 percent in 2011-12.

Although textile still remains the mainstay of

country’s exports, focused efforts by the

Ministry of Commerce for diversification of

export basket and markets have yielded

positive results, Federal Minister for

Commerce Makhdoom Amin Fahim said while

announcing Strategic Trade Policy Framework

(STPF) 2012-15. He said the government has

also been successful to a reasonable degree in

diversification of export markets with a

gradually increasing quantum of exports now

going to markets in Asia and Africa. He said

Afghanistan has emerged as a major trading

partner and has become Pakistan’s third

largest export market. He further said that

despite various challenges faced by the

economy, trade has shown consistent

improvement as exports increased by 27

percent in the year 2010-11 and touched a

record level of $ 24.8 billion. APP

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