CEO’s MESSAGE By the grace of Almighty Allah 2020 was a successful and productive year for Engro Fertilizers despite being confronted with a global pandemic that brought significant challenges, not only worldwide but also to our national economic prosperity. Pakistan has been one of the worst affected countries with the economic disruption aggravating an already struggling economy. During these testing times, we acknowledged our role as being the source of over one-third of Pakistan’s agri- productivity and recognized the monumental responsibility this placed on us to ensure the food security of our nation. As a company, the safety of our employees and the communities in which we operate has always been a top priority for us, through which we deliver uninterrupted business operations. In this pursuit, we came up with a robust “Combat COVID Strategy” to ensure business continuity and have robust contingency measures in place. We faced innumerable challenges, but I would like to thank each one of you for displaying the highest standards of commitment determination serving the nation in this hour of need. I am extremely proud of the way each one of you in your respective divisions, lived by the company values, enabling us to break records, achieve milestones and win accolades. As a company, we nurture passion to serve country, community and company, with strong belief in the dignity and value of people, and as a result have made significant developments on the social inclusion front. To this end, the Chairman of Engro Corp and DH Corp, Mr. Hussain Dawood pledged PKR 1 billion, which focuses on fighting this pandemic on multiple fronts including disease prevention, enabling health care practitioners, enabling patient care and bolstering livelihoods and sustenance. Engro Fertilizers has thus far made the following contributions to the PKR 1 BN pledge; The Company has also undertaken other initiatives to prevent the spread of COVID-19 in the communities where we operate: Conversion of our Technical Training Center into a free Corona testing facility for the Daharki community, with the support of Indus Hospital Awareness campaigns, distribution of basic health and safety accessories and installation of handwash stations at Govt. schools and colleges in Daharki and Ubaro To aid the affected families in the regions surrounding our production facilities, we organized the distribution of rations to underprivileged families Regular disinfectant spraying and installation of mist walkthrough tunnels carried out in multiple public places including courts, NADRA office, railway stations etc. Furthermore, other steps were taken to help the community which includes establishment of an Anti-Rabies facility which is under construction and a permanent facility for artificial limbs replacement.
On the Manufacturing front we recorded the longest plant run without recordable injury & Zero TRIR (616 days | Previous best: 187 days) and 21Million Manhours without LWI . We also recorded the highest ever Urea Production in the history of EFERT (Expected Production Outlook: 2.27 Million MeT| Previous Best: 2.0 Million MeT in 2019) and went a step ahead on product innovation by launching the new Zarkhez Khas Grade & introduction of Blend Coat technology. Despite being faced with a global pandemic, the Commercial Division was able to record highest ever Urea sales of 2 Mn tons, Phosphates business witnessed a remarkable turnaround to close year end at ~PKR 400 Million PAT and SFB crossed the PKR 10 Bn revenue mark for the first time in history with the highest ever Zarkhez volume and Zabardast Urea growing by two times versus last year. Furthermore, the Crop Science Division closed deals with likes of CORTEVA and BASF for new innovative products for Pakistani farmers. All these achievements are a testament to the hard work, determination and dynamism of the Commercial team. The efforts of the Supply Chain Division enabled them to move a record volume of 2.6 Mn tons across the pan Pakistan footprint. This team moved 500KT of product in a single month to deliver record sales in June 2020, which enabled us to attain 50% market share. The E-Logistics business resulted in creating a Billion rupee business in revenue in its first year. The Finance team played a crucial role in ensuring business continuity which enabled us to achieve 24 hrs closing versus 11 days before OneSAP . They provided tools and stewardship support to achieve PKR 1Bn of savings across the company, along with prudent business planning and active advocacy which enabled us to deliver nearly PKR 4Bn to our bottom line. Human Resources, our most important asset was re modelled to be “Fit for Purpose” with a new business partner approach to facilitate all functions in achieving our shared objective. Furthering the agenda of Diversity at EFERT, active steps were taken to increase the gender diversity ratio which went up to 8% from 6.2% last year. We are the first company to hire women in unconventional roles and as a result 8 women were hired in Warehousing as WHIs , 6 women were as Trade Apprentices at our manufacturing plant in Daharki and 3 women were hired in field-oriented roles in the Commercial Division. The company also made significant progress on the digitization front. We are the first company in the fertilizer sectior in Pakistan to launch “Humsafar”- the First ever Dealer Management System giving dealers the freedom to execute e-sales and manage their dealer accounts by themselves via their smart phones. SAP Fiori Application was installed to provide SAP data and reports to entire sales force on the go. Fiori and BI Tools adoption activities are currently underway to harness the full potential of technology. The Finance Division launched the Fixed Cost Analysis Dashboard and ‘first of its kind’ Electronic Bank Guarantee issued in favor of EFERT by MCB Bank. Employee Central was also launched by HR to improve work processes and enhance employee experience, enabling them to move towards paperless digitized tools and platforms. This year has been Alhamdulillah one of the best years in the history of Engro Fertilizers as we won 26 accolades, both local and international out of which 15 were for Safety and Environmental Stewardship: • We won the MAP Award after 26 years for the best company in the industrial sector • International Fertilizers Association awarded us with a gold medal for Industry Stewardship • We were awarded at APEA Awards 2020 for exemplary corporate excellence performance in the Manufacturing category. I would like to thank each one of you and especially those working on the field, at the plant, at warehouses and the medical team who continued to carry on with their day-to-day business, leaving no stone unturned to serve the country and company- the milestones and achievements of this year are all a result of your untiring efforts and devotion to the work that you do . As we move forward, we will be faced with innumerable challenges and obstacles but we have to face them head-on, moving swiftly towards fulfilling our responsibility towards the nation by showing the highest levels of commitment, dedication and hard work to take the country and company to new heights as together “we grow Pakistan.” Nadir Salar Qureshi CEO, Engro Fertilizers
ENDOITTOER’s The culture at Engro Fertilizers is a solid reflection of the company’s core values. The ways in which we conduct business, manage workflows and interact as a team, all add up to an experience that represents who we are as an organization and what we stand for. We have a strong organizational culture that focuses on employee well-being along with capability building and skill enhancement, which is essential for career growth and development. Hence, in this pursuit, we have launched different initiatives such as Women of Impact, Art of Meaningful Conversations and sessions on Personal Effectiveness. We celebrate individual and team successes, give credit when credit is due and make our employees feel a part of a strong community. Our culture enables us to attract talent from all over the country because to us our people matter the most, which in turn helps improve engagement, deliver a unique employee experience, and makes people feel more connected. Our culture brings all of you together, breaks down the boundaries between siloed teams, guide decision-making, and improve workflow overall. At Engro Fertilizers, we foster and celebrate a healthy work culture and will continue to work on developing and enhancing the culture in a holistic way through supportive management behaviours. Arshia Saqib Head of HR, Engro Fertilizers
04 MANUFACTURING
YOKOGAW DCS REMOTE FAT DCS project team displayed an excellent example of adaptability when due to COVID-19 travel restrictions had been imposed and project milestone commitments were in peril. The project team with their complete dedication to the project timeline, devised an ingenious and first of its kind “Factory Acceptance Test” procedure in coordination with the Yokogawa team in Singapore, utilizing remote access technology, with camera access being controlled by the EFERT site team, for both the software as well as hardware verification of the solicited system. The remote FAT provided a unique opportunity for comparison of the new system with the current live Honeywell distributed control system and enabled the identification of any discrepancies and errors in the control logic. It also facilitated the involvement of a wider group of Engineers and Operators for testing, resulting in thorough verification. The team was able to save approx. 8 MPKR via this remote FAT as travel and other miscellaneous expenses were eluded. The DCS FAT activities lasted for around 30 days where Engineers from Instruments, Operations, and Process worked collectively on around 1,200 logic loops, 230 graphic schematics, and 18 controller cabinets. 1,320 punch points for corrections and modifications were raised which were resolved collectively with the Yokogawa Team. Asad Naeem (Lead), Khalid Bashir, Mobeen Iqbal, Shahzad Qadri, Abdul Hadi, Hassam Khalid Amir Abdullah, Arsslan Tahir Bhatti, Arslan Qureshi, Maryam Abdul Rab Butt, Sania Ejaz
BOG RELIABILITY IMPROVEMENT Owing to multiple teething issues, BOGs’ operation at Plant-2 had been a point of concern since commissioning. Post-2018, both BOGs were available for operation but there were multiple reliability issues such as forcing securi- ty for machine start-up, sticking and passing of spool valve, and unavailability of Modbus gateway configuration data for BOG-B engine communication. Exhaustive efforts have been put in to address these issues. Starting with the need to force security for machine operation, the logic and narrative were checked in detail and it was found that the security should be a part of start-up overrides as per the narrative but it hasn’t been implemented. This was implemented right away and has been successfully tested. For the problematic spool valve of BOG-B, a new replacement part was identified and procured. It has completed a reliable run on the machine and has been introduced as a WH stock item. Modbus gateway used for Engine communication of BOG-B was configured by third-party engineers during commissioning and no configuration data was available for reconfiguration of the module. After referring to numerous documents for engine communication standard available online and getting help from online technical forums, the module was successfully configured and a procedure has also been made for future reference. Faizan Arshad Chaudhry
INAUGURATION OF I&E SKILL LAB I&E department exhibited its commit- ment towards hands-on learning and core skill enhancement by develop- ing a practical learning facility for young engineers. Dedicated efforts over a period of six months led to the successful accomplishment of this facility which is equipped with cut-models of plant equipment such as motor, transform- er, circuit breakers, control valves and pneumatic instrumentation as well as with in-house built simulator and trainer panels including Yokoga- wa DCS, Bentley Nevada vibration monitoring, Siemens Simatic, Allen Bradley Control Logix, ABB low voltage drive and Schneider/ ABB protection relays. Hands-on training on these models and simulators will enable young professionals to enhance their technical knowledge, troubleshooting skills and decision-making abilities in order to excel better in the field. The facility was inaugurated by EFERT CEO, Nadir Salar Qureshi, and is expected to yield productive results with young engineers acquir- ing practical training under the TTM ambit. Ahsan Jawed (Lead), Khalid Rasheed, Amna Afzaal
MILLION TREE PROJECT Pakistan contributes less than 1% of the world's greenhouse gasses but 200 million+ of its population are among the most vulnerable to impacts of Climate Change. Engro Fertilizers have long realized the need to mobilise their own resources, surrounding communities & government agencies with the knowledge and skills to cope with climate change. So, in June 2018 and with government support, Engro Fertilizers launched the Million Tree project with the aim of planting one million trees across 500 acres of government forest land in Ghotki (Mirpur Mathelo 04 Km from NH-5 near). As of now ~200-acre land has been maintained with plantation of more than 350 K TREES with an investment of around 2.6 Million PKR (land, water, sapling, human resource and technical expertise). Engro has considered this pilot project a type of divine investment and perusing its completion with a religious spirit. Plantation of one million trees by E-Fert will not only aesthetically enhance the surroundings but reverse the environmental degradation, will restore biodiversity and improve ecosystem (carbon footprint reduction).
EL-200 CONTROL SYSTEM HARDWARE UPGRADATION PROJECT El-200 is the elevator system installed at Urea-2 that is used to access five levels along with the PT-2 Structure. Its control system has recently been upgraded since the previous one had been declared obsolete. Allen Bradley-based Compact Logix PLC has been installed along with an HMI interface monitoring and troubleshooting purposes; hence minimizing personnel exposure and safety risks. Existing old JBs have been replaced with a single control panel in the machine room. A cable tray has been installed along the PT-2 shaft (300 ft) in which all new Control, Travelling and Power cables have been laid for elevator reliable & safe operation. All platforms Junction Boxes have been replaced with SS Junction Boxes, new call buttons and LEDs. Complete logic testing was done during factory and site acceptance tests as per developed cause & effect sheets. Muhammad Hamza Saeed
HOW WE DELIVERED 100%: MANAGING RECORD SERVICE FACTOR TO DELIVER RECORD PRODUCTION 2020 will be remembered as the record-breaking year in the history of EFERT. Perfect production number this year has many underlying perfections. 100% service factor in 2020 at Ammonia-3 is the most primitive factor to this magnificent overall site record. The service factor of a process plant is the number of plant operation days vs the total number of days in the year. Ammonia-3 unit has sustained the longest ever front-end run of 668days and the marathon run of continuous 400days of ammonia production (still counting). Looking at the Ammonia-3 unit design numbers, service factor ofdesignplan 814KT 741KTand the yearly production of 100% 94.5%vs vs is nothing less than the operational excellence marvel. This sensational service factor has been achieved showing exemplary teamwork. Initiation of structured Reliability program and Impactful change in Preventive Maintenance program, involving gap analysis of existing practices with manufacturer guidelines remained pivotal in delivering this record service factor. A huge amount of efforts were put in by the whole team in improving the reliability of business-critical machines like the primary reformer ID fan turbine and its lube oil turbine. Team skill enhancement and training is an essential constituent of sustainable & smooth operation. Major improvement in this context was the provision of a platform for sharing experiential learnings “Lesson learnt” in an interactive way, for this, the Video Modules Drive remained under high focus. In this drive, plant critical activities and emergency handling videos were developed and shared by senior individuals.
HOW WE DELIVERED 100%: MANAGING RECORD SERVICE FACTOR TO DELIVER RECORD PRODUCTION (CONTD.) As they say “Those who cannot remember the past are condemned to repeat it” , taking learning from the past incidents, a regime developed where elaborative yet crisp monthly flyers of Lesson learnt from past operational upsets were shared to have better inculcation of knowledge, this served not only as a refresher but proved to be instrumental in improving team focus and vigilance. TTMs also remained the highlight of the year. Extensive training sessions were conducted on the critical TTMs of Boiler Feed Water and Cooling Water Chemistry. Technical training like “Ammonia Steam Letdown Station Hydraulics & Control” and “Pumps & Compressor” were also delivered to build up the team capacity. They were many testing times in 2020, Ammonia-3 team headed through with a lauding success. COVID-19 was an unprecedented challenge where manpower management while ensuring sustained plant operation was the mammoth task. In-order handle unique situations during COVID-19, comprehensive SOP was developed, and managing the COVID situation was highly appreciated by the international insurance auditor and gave very high rating Plant tripping and Operational Emergencies were second to none, where the team proved its mettle and skill by averting potential Ammonia-3 tripping, there were 5 such emergency scenari- os faced and saved this year. Increased CO2 Slip from the front end had remained one of the major issues faced at Ammonia-3, it was not only challenging the plant operation continuity but could also have impacted equipment reliability. This issue was dealt with professionally by doing pertinent RCA and taking unerring action to get hold of the issue. 100% SF not only gave production more than design value but also there was a gain in energy index which has a POSITIVE 700 IMPACT OF PKR MILLION Alhamdulilah..!! The site culture of enhanced teamwork and collaboration eventually paid off and delivered the results for Manufacturing Division. ARC & ASK
ASSET MANAGEMENT DASHBOARD With the above maxim in view, the Electrical section took the initiative to develop a customized asset management dashboard. The dashboard has been customized with the foresight to make maintenance management, analysis, and trending easier. The key feature of this dashboard is the seamless integration of data from SAP, other Microsoft access dashboards, and Electrical section study reports. The dashboard will enable the end-user to extract significant data including maintenance history, spares status, health analysis and condition analysis on the click of a button. End-users can access customized reports with machine-specific information such as vulnerability status, life cycle and recommended actions. The dashboard currently has data incorporated for Electrical equipment only; however, keeping in view the numer- ous benefits, it is planned to expand its scope to incorporate data for the site’s equipment from all domains. Muhammad Rafay Usman APC ONLINE IMPLEMENTATION Urea-3’s ‘Advanced Process Control’ was one of those projects which were most susceptible to be affected due to COVID-19 as IPCOS and other vendors could not have visited the site for pre-commissioning and commissioning steps. One of the most critical steps was the implementation of base layer changes and new loops proposed by IPCOS on the running plant. IPCOS had proposed 6 new critical loops including CO2 Flow/Turbine Speed Controller for K-01, NC Ratio Controller and Reactor Pressure Controller. Since these loops were of high criticality with respect to smooth plant operation and had the potential of plant tripping, a detailed execution strategy was developed and reviewed by Instrument, Operations and Process teams. After thorough reviews of the execution strategy by competent technical resources, a total of six new loops were successfully configured and safely implemented online. These complicated changes were implemented on running plants with the expertise of site resources without any external intervention or support. Faizan Arshad Chaudhry
IN-HOUSE HEAT EXCHANGER FACILITY Heat exchangers are amongst the most critical and widely used equipment for any high-pressure chemical complex. EFERT utilizes more than 500 variable-sized heat exchangers operating at different pressures. A substantial amount of OPEX and CAPEX is spent on them annually for their maintenance & end of life replacement. At the end of their useful life, these heat exchangers are required to be replaced or retubed. Historically only small-sized low-pressure exchangers were retubed at EFERT, while medium & high-pressure exchangers were procured from external vendors. In 2019, the EFERT Manufacturing team undertook the challenge of carrying out medium pressure heat exchangers retubing in-house. Over the last 2 years, the Manufacturing team has successfully retubed 4 heat exchangers, while retubing is in progress for additional 3 heat exchangers. This initiative though in its infancy, has already resulted in cost avoidance of additional cost avoidance of 19 MPKR 28 MPKR to the company while will be materialized once retubing of on ongoing 3 heat exchangers is completed. By rectifying existing facility capacity constraints, cost avoidance of 100 MPKR can be achieved within the next 3 years through in-house retubing of 27 known diseased heat exchangers. In this regard, a detailed feasibility study is currently in progress to assess the full potential of an in-house heat exchanger retubing facility, identify the existing constraints and investments required to rectify them. This resounding success story is a testament to the EFERT Manufacturing team’s entrepreneurial spirit and relentless pursuit of Engineering Excellence.
PROTECTING PLANT LIFELINES – IN-HOUSE DESIGN OF ROTOR CANNISTERS Healthy Spare Rotors of Turbo train, assets worth millions of dollars, are crucial to support continuous plant opera- tion. Since Plant-1 relocation from Pascagoula US, all Turbo machine rotors barring 01, remained stored in wooden boxes. This exposed them to weathering and possible deterioration over time. OEMs' recommendations and best practices suggest that for long-term preservation of the spare rotors, they should be stored in sealed canisters under positive nitrogen pressure. This is to protect them from damages like corrosion and pitting which is generally caused by environmental conditions. Hence, deeming it as an opportunity, the Plant team undertook the challenge to reverse engineer and locally fabrication these containers instead of procuring from OEM or any other foreign vendor. PROUDLY, THE TEAM HAS SAVED 07HAS MANUFACTURED ALL 27MTHE COMPANY REQUIRED CANNISTERS PKR WHILE PROVIDING THE RIGHT PRESERVATION TO THE CRUCIAL ASSETS Omer Humayun, Syed M. Farhan and Imran Khan
COMBATING COVID’19 Focus on 4 Verticals: • Patient care and facilities • Prevention: Testing/Diagnostics • Protecting community & frontline staff • Livelihoods and sustenance PATIENT CARE & FACILITY 176Engro fertilizer had established BEDS FREE OF COST facility at TTC for the local community. All boarding and lodging arrangements were also made for those who were isolated in this facility to shift serious cases to hospitals. This is the only free-of-cost facility in the vicinity with all necessary emergency equipment. PREVENTION: TESTING/DIAGNOSTICS Engro fertilizer had also Established free of cost COVID Testing Facility with the help of INDUS hospital at TTC DHK for the general public. 3000+ 6000+ PCR TESTS ANTIBODY TESTS were conducted in this facility. This facility was established under the Hussain Dawood Pledge.
COMBATING COVID’19 (CONTD.) PROTECTING COMMUNITY & FRONTLINE STAFF 40,000 8000 FACE MASKS DISTRIBUTED PPES KITS DISTRIBUTED TO DOCTORS & PARAMEDIC STAFF 1500 DISINFECTION TUNNELS & SANITIZERS AND 35 TEMPERATURE GUNS DISTRIBUTED AT PUBLIC PLACES, 40HAND WASH STATIONS COURTS & ADOPTED SCHOOLS INSTALLED IN PUBLIC AREAS DAILY DISINFECTION 5 MONTHSOF PUBLIC AREAS FOR LIVELIHOOD & SUSTENANCE DISTRIBUTED ENGRO COMMUNITY VOLUNTEERED & DISTRIBUTED 2000 500 RATION BAGS (FOOD) TO WIDOWS AND THOSE WHO WERE OUT OF ADDITIONAL RATION THEIR JOBS DURING COVID 19 BAGS TO POOR FAMILIES
COMBATING COVID’19 (CONTD.) PERMANENT LIMBS FACILITY ENGRO Fertilizer established a permanent Limbs facility at Daharki. 300+ PATIENTS will get treatment in this facility Groundbreaking by ECORP President & CEO Mr. Ghias Khan and Inaugurated by EFERT CEO Mr. Nadir Qureshi ENGRO ANTI RABIES FACILITY 90%Groundbreaking by ECORP President & CEO CONSTRUCTION COMPLETED 1st center in the vicinity. The facility will be operational in 1Q 2021 SNAKE BITE FACILITY Continued its operation despite COVID 19 crisis 180K + patients treated since 1977, 100K+ treated since 2005 900SAVED LIFE OPF ATIENTS IN COVID 19
COMBATING COVID’19 (CONTD.) O LIVESTOCK VACCINATION IN KATCHA AREA 1500 ANIMALS got vaccinated. In appreciation of EFERT efforts, the Government appointed one permanent veterinary doctor at Katcha areas. SAHARA CLINIC SAHARA clinic revamped The clinic provides OPD service (free of cost) to the local community 5805 PATIENTS attended in 2020
EDUCATION 303030 INITIATIVES 01 Katcha Girls school upgraded from Primary to Middle education 01 Katcha Boys school upgraded from Middle to High school education Infrastructure Improvements in Katcha schools Total 1532 Boys & Girls are educating in these schools Total 13 schools are running SAHARA TTC COLLEGE ENGRO ADOPTED SCHOOLS The established computer lab in Established in 2009. 10 Government schools adopted by 2020. EFERT. 20 Computers provided. 436 Diploma students. Uplift school and added a new PPEs & necessary materials provided playing area for small kids. 2500 + alumni to date. to schools during COVID-19. 550 STUDENTS Vocational courses in 13 trades. 1620 STUDENTS are currently enrolled (1020 boys & 600 girls) TTC students secured Top 11 are currently enrolled Electrical & 14 chemical positions in 2019-20.
COMMUNITY ENGAGEMENT INITIATIVES ENVIRONMENT SUSTAINABILITY & STAKEHOLDER’S ENGAGEMENT 17 LIVELIHOOD projects inititated. These projects are providing EMPLOYMENT TO ~ 50 PEOPLE SEWING MACHINES DISTRIBUTION Distributed sewing machines to 25 SHUHDA’S FAMILIES CLEAN WATER PROJECTS 2 RO PLANTS MADE 03 RO PLANTS operational for the availability of clean converted on solar water at Daharki village
COMMUNITY ENGAGEMENT INITIATIVES (CONTD.) FLOOD RELIEF CAMPAIGN AT KATCHA INFRASTRUCTURE IMPROVEMENT Laid 1250 RFt Laid 400 Rft new sewerage line at new connection line, village Jan Mohammad, 300 RFT repaired at repaired 1000 RFt. Jing Colony TREE PLANTATION 200~ aCocverreed Land
COMMUNITY ENGAGEMENT INITIATIVES (CONTD.) INFRASTRUCTURE IMPROVEMENT Daharki Railway General public General public Solar lights station revamped waiting area Toilet installed at the revamped revamped station O DISTRIBUTION OF RATION BAGS The administration team distributed 200 RATION BAGS in the Jing colony O SAHARA ARTS & CRAFT CENTER 500+ LADIES trained
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GAMIFICATION CRICKET LEAGUE ON TERRITORY MANAGEMENT In the second half of this year, we launched Cricket League2020. This was the first-ever two-pronged gamifica- tion ensuring effective execution of Territory Management &maximum usage of Humsafar application. A massive division-wise online launch was made of Humsafar to initiate hype for the gamification followed by a pre-qualification round! 100% 2000+ 370+ ENGAGEMENT RUNS SCORED WICKETS TAKEN In Cricket League 2020 the focus of gamification progressed from individual performances to team-based performance. Regions were converted into cricket league teams & activities of Territory management/Humsafar were tied to wickets and runs scoring. A team is only as strong as its weakest link hence entire regions motivat- ed TSMs to participate equally. RSMs and ZSMs also competed passionately to contribute bonus points for their teams. TOP 3 TEAMS
FIORI GAMIFICATION In 2020 April Engro Fertilizer installed Fiori Application and provided access to our sales force employees. Fiori is a user-friendly interface provided to the sales team to access detailed sap reports. The reports available via Fiori apps provided real-time data of sales, inventory, and dealer accounts on the phone to all our sales force employees who would normally take this data from regional or zonal coordinators. Whereas before the data before would be requested and provided via email taking a few days now it was readily available on the go via a phone app with our sales force. However, till July we were unable to increase usage of the Fiori app due to a natural resistance of human nature to change and the learning curve of using a new technology app. For this purpose, we decided to improve our implementation of the Fiori app using gamification. So our commercial excellence team sat together and came up with gamification called “Pakistan Walk” giving it a patriotic theme since we implemented it in August. : GAMEBOARD NEW VIDEO GRAND LIVE DICE BADGES & BONUS SCORE CITIES TEASERS SCORECARD ROLL RANKS ROUNDS In “Pakistan Walk” the objective was to ensure better usage of the newly launched Fiori app on a day-to-day basis. Our eventual objective was to maximize the usage of this app so data-centric decision-making can be done, empowering the sales force with real-time information leading to better sales and customer servicing. To ensure a higher level of engagement we came up with creative concepts and tools using technology in gamification. This game had a “Pakistan Walk” theme where players raced through 7 different cities, which were 7 creative levels. Video teasers are used each week to reveal new cities and new board designs. The players would be placed as pieces on these 7 different designed board games with live dice roll activities daily. Steps were used as points tied to achieving certain activities and reports of the Fiori app. Bonus rounds were introduced in between to create spikes in engagements! The result was an outstanding outcome of the Fiori app used more than 10,000 times and each player using it an average of 70 plus times during the one month this gamification was executed. This was also the first gamifica- tion that successfully involved all three levels of sales force motivating Zonal, Regional and Territory Sales Manag- ers to enter the foray of competition! 8606 activity messages sent! 80 video testimonials sent First time played at 3 levels 133 out of 136 people engaged - 97% 58 text testimonials sent ZSMs, RSMs & TSMs Fiori app used 10,044 times 1674 dice roll qualifications Each player used Fiori avg 73 times
SFB CROSSES THE PKR 10 BN MARK GAMIFICATION In a VUCA World! What a year it has been for Specialty Fertilizers Business. It was the month of March when we truly realized what VUCA meant! SFB was standing at 81% achievement and Covid lockdown had just started. The urea price disparity in 1Q had already hit us hard in terms of Zabardast Urea volumes and we were now facing an unprece- dented situation of a total country lockdown. We were unsure of what the future will look like. Over the next few months, things were very uncertain. Untimely heavy rains damaged the crops (esp cotton). The federal govt announced a subsidy which never came. All these impediments kept the agriculture industry in a very skeptical position. However, SFB kept on marching on. We knew that our delivery has a direct impact on the food securi- ty of the nation and we cannot afford to let the external factors drive us. We took control. It was decided among the team that we will keep our focus on our targets and will not let the situation dampen our spirits. And Alhamdulillah, God was with us. We are delighted and proud to say that as a result of the SFB team’s hard work and relentless efforts, we have kept our winning momentum going even in one of the most uncertain and difficult years the fertilizer industry has ever seen.
SFB CROSSES THE PKR 10 BN MARK GAMIFICATION (CONTD.) We are pleased to inform you that 2020 was a record-breaking year for SFB. SFB crossed the Overall volume crossed Highest ever Zarkhez Zabardast Urea unprecedented levels of PKR 10 Bn Volume of 84 KT growth of 2X 200 KT revenue mark for since the inception and volume of 51 KT the first time in (vs CP volume of 190 of ZBU Launch of the Shaan- KT) dar Kissan Program history Launching the Product innovation Launched the second digital platforms – the launch of Zarkhez Mobile Soil Khas and introduction of Testing Lab and the first-ever digital BlendCoat Technology in campaign for EFERT dedicated to the collaboration with province of Sindh (Zabardast Urea Kharif) Fertinagro Spain SFB team has played its part in helping the farmer grow even in the most difficult of years and for that, we are thankful to the whole SFB team whose efforts have culminated in a record-breaking year. We are thankful to our partners in success – the Zarkhez Plant team, the Supply Chain team, the CSG group (especially F&P & GA). Sincere gratitude to AI & NSQ; as their belief, support, and guidance has always been the source of motivation for us. We hope to start 2021 in the same stride and aim to surpass all the records of 2020!
CUSTOMER MANAGEMENT AND TERRITORY PLANNING TRAINING The Commercial Excellence team of EFERT feels privileged to announce the launch of the first training session of Customer Management & Territory Planning – “The most pivotal capability development session of 2020!” It took three months to create this completely customized training course with tools and SOPs facilitated by an external professional research company called Markex Ltd. Our Commercial excellence trainers Obaid Fahad Aziz and Syed Shabih Bokhari were first trained via a train the trainer course and are now leading the sessions. We are going to conduct a total of 7 sessions It is an exciting and immersive from June to August covering the entire 2-DAY SESSION 130 PLUS SALESFORCE employees of the commercial division. that uses interactive teaching techniques so that each participant will be encouraged to participate Some specific online techniques used SHARE SCREEN case study and exhibition tables used to teach concepts MULTIPLE ZOOM BREAKOUT ROOMS for group activities of outlook forecasting MOCK VIDEO line manager sessions between RSM and ASM with assignments presented ONLINE QUIZ competitions for a fun and competitive way of reiterating learnings The training aims to build up each territory manager's capability to meticulously plan his territory using a successful and powerful iterative process and user-friendly tools in order to maximize his territory potential! Our vision is to convert the “art” of selling into the “science” of selling; so that instead of a limited gamut of top sellers, every territory manager uses a standard benchmarked process and successfully achieves top seller performance!
29 SUPPLY CHAIN
REJUVENATED PROCESS FOR LOW VALUE PROCUREMENT The procurement team is continuously striving to make their service better and better for their customers. In accordance with the same, the Procurement Team has revamped the current Low-Value Procurement Process. This comprises high-frequency items that are of a value of less than PKR 10,000 To provide customers with better service and to reap more financial benefits for the company, annual contracts for all categories of low-value items have been placed in SAP. These contracts have been negotiated on annual estimate consumption and due to consolidated requirements, the Procurement team successfully negotiated competitive rates. Exclusive annual contracts have been awarded to the lowest bidding vendors. Contracts for all categories of low-value procurement have been established in the 3sy0ste0m MATERIAL CODESafter the establishment of approx. (most frequently ordered items). These contracts have been made on ECORP and all subsidiaries on S4 Hana can benefit from these contracts. End-user testing has also been concluded with the SAP team and all system issues/errors have been streamlined after intensive testing. Utilizing the OneSAP platform, this initiative of EFERT Procurement was extended to ECORP and EVTL. All Head Office end-users in these subsidiaries are now empowered to make their own Release Orders in SAP against contracts created by the EFERT team, bringing synergies and value creation to the bottom line of the organization.
LAUNCH OF SERVICE POS In line with the improvement of processes and Centralizing all procurement at EFERT, the Sourcing & Procurement Department has revamped the SOP of Services being handled at Head Offices and Field areas. Earlier, the Services requisitions and Purchase Orders were handled by end-users themselves, due to which there was no governing body to monitor the multi-million rupees services scope. Now, all the Purchase Orders shall only be created and approved by Sourcing & Procurement Team, hence segregation of Services PRs and POs will improve control of the process and help in streamlining and standardization of all the contracts being created in SAP. This initiative was launched in November 2020 and so far 100+ PURCHASE ORDERS have been created. PURCHASE ORDER CREATED!
ENERGIZING ENGRO WITH SOLAR ENERGY Of all the realities COVID-19 has unearthed one stands glaringly obvious, problems of nations are no longer restricted to the confines of their borders. Countries around the globe are now facing challenges that cannot be dealt with in a solitary manner. Collective action is the need of the hour. This notion is most obvious when we speak of climate change The world has woken up to the fact that renewable resources are the need of the hour so that we may preserve our environment for future generations. Solar power is reshaping energy production across the world. It relies on sunlight an abundant and infinite source that causes no production of harmful gases. This not only makes it more reliable in the long run it is also extremely environmentally friendly. Engro fertilizers as a company pride itself in being in step with global trends. We as a company not only acknowl- edge climate change as being a pressing problem, we are also taking valuable measures to address it. Our compa- ny has in place an extensive and impressive Health, Safety and Environment program which includes the green initiative. Following its guidelines, we too have introduced solar energy in our warehouses. At present we have successfully installed solar panels at 60 of our warehouses that are collectively producing 18Kw of clean and green energy with an estimated cost recovery period of just 8 months. In the near future, Engro aims to convert all its warehouses into solar-powered units. It is no secret that as a country we suffer from sometimes non-reliable and limited power resources. Only a few years back Pakistan experienced severe load shedding and only this week we had a national blackout. Such power outages are detrimental to the functioning of any company. Hence by switching to solar energy we are also ensuring improved efficiency within the working mechanism of Engro itself. EFERT has seen this potential to harness free renewable energy by using solar panels. Currently, we are the only fertilizer company in Pakistan that has incorporated the use of solar energy at our warehouses. Installation of solar panels is a great step towards a brighter future for our company and hopefully one that will inspire others in the industry to follow suit. Engro is passionate about supporting local as well as global causes. Initiating the use of solar energy is our way of committing to the preservation of our planet and contributing to a sustainable future. By reducing our carbon footprint we want to ensure a cleaner, safer and healthier environment.
WAREHOUSING; YOUR SERVICE PARTNER Bringing dreams into reality for achieving more than 2 Million Ton urea production was a great achievement for manufacturing. Handling this huge volume along with multiple product ranges in 2020 was a challenge for the warehousing team. Such challenges bring out the best within the team turning theory into best supply chain practices. This seems to be a difficult task at early stage 2020 where the COVID-19 pandemic intensified demand for warehous- ing and placed new barriers restricting fieldwork. As the pandemic spread across the nation many businesses started to feel the full impact of the deadly virus at a time when fertilizer application was at a seasonal high, particularly in Sindh. In response to many challenges, our leaders modified their supply chain focus and reformed through a series of initiatives. The warehousing team needed to work internally with team management, transporters, logistics team, and all supply sources to create a heralded partnership; this initiative reduced variation and uncertainties in the transportation of finished products from all sources. Apart from the above, there were various other interactions that evolved in response to changing business environments; a few are as under: Warehousing team ensuring 01 02 Roll out new operational SOP’s in flexibility in operations through complete alignment with the warehous- flexible timing which helped in ing team, logistics team, SAP for optimal coordination between Sales, increasing sales volumes. Production, Planning and Finance. SAP played a vital role in 03 04 Modern warehousing and providing Central stock office refurbishment was carried out which result in management that results in aesthetically pleasing, optimal availability, optimal comfortable workplaces that also improved customer stock levels, and delivery servicing. agreed with the dealer network. Transparent logistics 05 06 Ensured COVID-19 free operations operation and monitoring at warehouses by implementing strict COVID-19 measures. through KPI. We have proved that we have the skills and mindset to ensure safe operations in any environment. We will keep on improving customer services and delivering exceptional results ahead.
JOURNEY TO ISO 14001: 2015 CERTIFICATION Controlling the impact our warehousing operations could have on the environment is one of the most important management issues and doing so ensures that our WH operations not only remain sustainable but also help to conserve precious resources. A critical element during this journey was the structured way of documenting what we advise in our processes across various phases of warehousing operations. ISO 14001:2015 provides a framework for an effective environmental management system which we adopted by: Identification of Waste Improvement of risks to the disposal and Environmental environment its impacts. Performance and through our the addition of a operations. communications strategy. The certification visits: Once we were confident that we were ready to go, we booked two-stage visits by independent ISO auditors. where an external assessor would come and review our entire business operations at warehouses and gauge the impact we create on the environment. Overall, the Stage 1 visit went well. Our docu- mentation and disposal procedure only needed some minor revisions in the HSE agenda as per ISO standards, (which was to be expected). We had less than a week to get everything in order before the Stage 2 visit. And we did! The Stage 2 visit was a great success, our documentation was up to scratch. As of this writing, we are just waiting for our certificate to come through. The entire process was a very interesting journey, it was tough at times, it was long, but we are all in agreement that we are so glad that we did it. What Lies Ahead The ISO certifications program is a continual process designed to ensure ongoing compliance with these international standards. Valid for three years, it requires a surveillance audit in years two and three. In addition to the above timeline, we will continue to conduct regular internal audits on each of our processes, implementing corrective actions, and measuring the ongoing effectiveness of our Environmental management system.
MISSION CLEAN SWEEP In a continuous drive for process improvement and delivering optimal service to end-users Procurement team kicked off a system cleansing exercise during 2020. At the start of the year, we had an enormous PR to PO delta (Open PR line items) of ~2,500 line items and we set ourselves a target to bring it down to 3 digits by the end of 2020. Purchase requisitions dating back to 2018 were still open in the system for various reasons ranging from a required item being obsolete, items under technical review from end-users, IHS update, or awaiting quotes. In order to clear this backlog, procurement initiated weekly meetings including all stakeholders namely Warehouse, Maintenance team, Instruments & Electrical Team & Procurement Team. On a weekly basis, all pending items were discussed and pushed forward for relevant resolution. VP Supply Chain & VP Manufacturing, GM Mainte- nance, GM I&E and all relevant stakeholders worked jointly to close these PRs of 2019. Weekly targets of PO creation were assigned to the procurement team which was stewarded by VP Supply Chain to expedite closure. Procurement bent over backward to unlock the accomplishment of their target to clear the backlog of all open PRs of 2019 and yesteryears. After tirelessly working in coordination with the end-users, the delta of open PRs was brought down to under 90 days. This activity not only increased our service levels but also helped to reduce the critical spares stock-outs at the plant by LESS 3%THAN The procurement team is continuously striving to go the extra mile and serve our customers beyond their expectations. OPEN PR LINE ITEMS STOCKOUT TRENDS – CRITICAL SPARES 3,000 7.00% 2,500 6.00% 2,000 5.00% 1,500 4.00% 1,000 3.00% 2.00% 500 1.00% 0.00% 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
E-LOGISTICS FLEET The Supply Chain logistics team optimized E-logistics fleet mileage to 295 to 305 KM per day with an additional fleet of 50% in the period October-December while our average has increased 14% last year. On a YTD basis handled 52 KT on account of 901/ transshipment with an average saving of approx. RS. 12 M20%i.e. SAVINGS 95%INCREASED OUR ENSURED FUEL UTILIZATION AT TRACKING TO 100% which at the start of the year was 25% while onboarding an additional vendor to ensure compliance and smooth process. Aligned Bank and Truckers for fleet leasing which shall increase transport avails for the plant without any impact to the company financially Introduced container cross-docking which reduced average loading time from 26 to 7 Hrs whereby increased E-logistics revenue by Rs. 3 Million. Initiated multiple projects with realized savings of Rs. 68 Million approx.
37 FINANCE & ACCOUNTING
BANK GUARANTEE ALTERNATE – A CREDIT SOLUTION FOR DEALERS WITHOUT THE INVOLVEMENT OF BANKS Credit sales against Bank Guarantees (BGs) cover a significant portion of our business. However, the BG process involves various documentation which requires time and effort on part of dealers and EFERT. To bring efficiency to the system and to facilitate the dealers, the sales team has proposed an ‘Internal Secured Credit Mechanism’, as an alternative to traditional BG. A project team was formed with representation from Finance and Commercial to develop a financing product equally attractive to EFERT and the dealers. After detailed deliberation, a unique product was developed with the following salient features/ benefits: Dealer will pay Significant savings of Upfront payment will upfront to EFERT manhours spent on BG be invested by the company and value issuance and claim generated will be process. shared with the dealer. Sales team will Less exposure to Spread and charges approve the amount COVID by avoiding the from the bank are and credit period under dealer visit to the bank shared between dealer and to comply with the the BG sales. requirements of stamp and EFERT. etc.
ENGRO FERTILIZERS LTD INTRODUCES THE FIRST ELECTRONIC BANK GUARANTEE SOLUTION IN PAKISTAN Engro Fertilizers Ltd and MCB Bank Ltd have partnered to accelerate the digitization of financial products and have developed Pakistan’s first-ever solution to electronically manage bank guarantees. With businesses adopting virtual operations and enforcing minimal physical interaction in the wake of COVID-19, Engro Fertilizers Ltd engaged MCB Bank Ltd, one of the leading Banks in the country, to develop an electronic bank guarantee management solution that will promote digitalization and enhanced corporate service delivery. Soon after the issuance of the first Electronic BG on August 18, 2020, all other banks were approached to offer a similar product for our dealers. Various bank interfaces including legal, trade and corporate divisions were engaged to encourage SWIFT-based EBGs. During Q4, banks gradually began to convert to EBG issuance and the product started gaining momentum. Sales team was made part of the project and they extended excellent support in onboarding the dealers and handling the teething issues with every new bank. For the month of Dec 2020, EBG is now live for all our 76% of the BG business dealers across 16 banks. was handled through EBG. Dealers are delighted in terms of customer experience as they can save time and hassle for stamp papers issuance, verification of original instrument and physical submission to the warehouse. EFERT has moved to efficient and paperless operations. It will eliminate the risk of counterfeit guarantees and will help save the manhours spent on logistics and safekeeping of the original instrument. In the next phase, we are developing a web-based portal PROGRESS OF EBG (PKR IN MN) that will be integrated with the SWIFT system as well as OneSAP. This will ensure real-time view of BG details in 800 SAP as soon EBG is issued by the bank. 700 Given the existing credit sales model offered by most 600 corporations, the product would assist the wider industry 500 in facilitating their customers and stakeholders in the 400 near future. 300 This project is in line with the commitment of Engro 200 Fertilizers Ltd to improve national corporate practices and 100 lead the industry with innovative solutions. Oct 2020 Nov 2020 Dec 2020 EBG Physical BG
AUTOMATION OF PETTY CASH MANAGEMENT - CLOSURE OF CASH WINDOW OPERATIONS To support the new ways of working, Engro Fertilizer Finance switched the expenses reimbursement facility from Cash Window Operations to Online Reimbursement Facility. The facility has been running smoothly and we have decided to continue this in line with our aim for digitization and paperless operations. Moving to this facility has also resulted in saving of daily man-hours as well as the administrative hassle of cash handling and associated risk. BEST COMPANY IN PAKISTAN – INDUSTRIAL SECTOR CORPORATE EXCELLENCE AWARD - MANAGEMENT ASSOCIATION OF PAKISTAN Engro Fertilizers Limited was awarded the Amir S. Chinoy trophy for being ranked as the best company in Pakistan in the Industrial sector. This achievement marks our return to this podium after 26 years. The award was conferred to the Company at the 35th Corporate Excellence awards held by the Management Association of Pakistan. The Corporate Excellence Awards recognize & honor companies showing outstanding performance, demonstrating progress and enlightened management practices. These awards distinguish companies who have exemplified exceptional financial performance coupled with incomparable governance, leadership, strategic and operational practices.
EPITOME OF EXCELLENCE: 24-HR MONTHLY RESULTS REPORTING Verily, “If we cannot see the possibility of greatness, how can we dream it?” That is exactly how it all started. A dream. To leverage the ever-advanced ERP at our disposal and achieve something that to this day, is an aspiration to big corporates all over Pakistan. A dream to report monthly results within the first working day of the next month. Fast forward a few months and that dream turned into a reality when EFERT was able to report its financial results within the first working day and that too with 98% ACCURACY However, this monumental feat wasn’t achieved without putting in countless hours of planning and utmost display of foresight. It all started with countless meetings with each relevant facet of the company where processes to enable timely closing was agreed all the while resolving possible issues. Next came the multiple iterations of solutions implemented to cut down the time taken by each facet to perform closing activities. These solutions were tested multiple times to ensure they were suitable and implementable. Finally came the time of April 2020 closing where it all had to click. And click it did!!! This was a truly monumental effort where each and every relevant function of the company efficiently and adroitly played its part to ensure timely and accurate completion of their closing activities. A special shout-out to the tireless and zealous efforts of the Financial Reporting and Planning facet for coordinating end-to-end activities and driving us home to achieve this colossal feat. A small illustration of our performance benchmarked against big names in Pakistan’s corporate circle is shown below: Entities ERP Monthly Closing ICI Pakistan SAP ECC 2nd working day Shell Pakistan SAP ECC 2nd working day Unilever Pakistan SAP ECC WD 2 (P/L) WD 3 (B/S) Reckitt Benckiser Pakistan JP Edwards 3rd working day Colgate Palmolive Pakistan SAP ECC 3rd working day Abbott Laboratories BPCS 3rd working day Shan Foods Sidat Hyder 3rd working day Pakistan State Oil SAP ECC 3rd working day GSK Pharma & Consumer JP Edwards 4th working day Lucky Cement SAP S4 WD 3 (P/L) WD 8 (B/S) Furthermore, the achievement of this feat while Working-from-Home is a real testament to the quality of our team and their unrelenting commitment to excellence.
LEVERAGING EXCELLENCE THROUGH BI TOOLS - EFERT FIXED COST ANALYSIS DASHBOARD Simplicity in itself is beautiful. Therefore, it is indeed true that the art of being wise is the art of knowing what to overlook. This was precisely the basis on which our EFERT Fixed cost analysis dashboard was built. Historically, each division in our Company has had various ways of keeping a check on their fixed costs, be it specialized SAP reports or monthly stewardships. And they’ve worked too. Departments have successfully been able to police their expenditures and deliver on targets. However, this year is different. The ongoing pandemic has posed many a challenge to the corporate world and our nation and in the end, what will end up setting us apart from other entities is merely financial performance during such troubled times and such performance will have to be boosted via efficiencies. This is precisely why EFERT as a Company has been set a target of cost curtailment against our budgeted spend. Each division has taken up this task of pitching in to ensure we as a company hit our mark. However, such endeavors require continuous monitoring and that is exactly why this Fixed cost dashboard is what was needed. Retrofitted with SAP, Engro Fertilizers’ Fixed Cost Analysis Dashboard provides quicker, easier & accurate exploration of departmental fixed costs in the hands of Budget Champions. With near real-time data updates and self-service analytical capabilities, budget champions can instantaneously generate fixed cost reports with a single click and drill-down capabilities. All this makes monitoring, controlling & tracking of departmental fixed cost convenient and highly user friendly. ACTUAL SPEND REVISED BUDGETED SPEND VARIANCE VARIANCE % Progress against 603M 715M (113) M (16)% FY savings 32% target PKR: 602,629,713 PKR: 715,264,394 PKR: 112,634,681 900 893 800 715 700 (1) 600 (14) 603 500 88 0 2 8 14 7 9 Actual FC 400 Travel 300 200 100 0 Planned Reduced Advertising Charities Insurance M&R Office Other Purchased Salaries FC Planned and Sales and and Finch and Related Expenses Services and FC Promotion Donations Consumables Expenses Other Staff Costs Some prominent features include: INTUITIVE SLICE & DICE/ EASY EXPORTABILITY INTERFACE DRILL-DOWN TRACKING & TO MS EXCEL CAPABILITIES MONITORING FOR FURTHER ANALYSIS A special shout out to our Business Intelligence team as well as our Planning team for putting in the hours to ensure this tool is launched just in time to cater to our division-wise cost stewardship needs as well as provide a handy solution to one-click cost analysis requirements.
KEY Achieved 24 Hour closing with 98% accuracy – Best ACHIEVEMENTS in class globally Ranked as the best company in Pakistan in the industrial sector at the 35th Corporate Excellence Awards Secured 3rd position in the “Overall Best Corporate Report Category” and 2nd position in the “Chemical & Fertilizer Category” Successful launch of Fixed Cost Analysis Dashboard resulting in stringent cost stewardship and cost savings Introduction of Bank The ‘first of its kind’ Electron- Guarantee Alternate – ic Bank Guarantee issued in Internal Secured Credit favor of EFERT by MCB Bank Mechanism Best in class ST performance, Outstanding GST refunds (~8.5%) out of total industry’s GST refunds (~35% Market Share) Business continuity ensured while WFH through digitization and automation
EXECUTING WITH EXCELLENCE SIMPLICITY IN CORPORATE PLANNING CYCLE The corporate Planning cycle has always been a very daunting task and requires extensive work and collaboration across the Company. This year we strived to simplify the Corporate Planning cycle process to ensure that it becomes more efficient and effective for all the stakeholders. To achieve this, we followed a two-fold strategy of (i) Empowerment to Divisions and (ii) Reducing no of meetings. Overall Guidance was given on acceptable Plan numbers while completely empowering the divisions to prepare their Corporate Plan. Another important step that was taken was to reduce the number of meetings of Senior Management. Instead of the CEO having individual meetings with all divisions, the only summary of the Plan and critical decision points were discussed with the CEO. This led to a significant reduction in man-hour saving of senior management. These steps significantly contributed to simplifying the CP process and made it more efficient. Like every process, there were some learnings that will be incorporated in the upcoming CP cycle to make it more effective. Below are the feedbacks from the respective Division Head on CP 2021 Planning Cycle. “ “ On behalf of Mfg Division, we would like to acknowledge a The CP 2021 was conducted in a very simplified manner, very smart compilation of Corporate Plan 2021. The new where the Finance team took the overall lead and the approach enabled us to deliver on expectations in a much number of meetings were reduced. Business Analysts were better way. Comparing it with previous years, this time fully engaged and collaborated with the respective Departments around the key elements were simplicity & empowerment, and Divisions; acting as the main point of contact. Conversely, which contributed to the overall efficiency of the Corporate the reduction in meetings and interaction led to silo amongst Plan development. the divisions as we were not aware of the plans and initiatives of other divisions. Next year we will have to find a more balanced SHAHZAD NABI approach between simplification and engagement among the divisions. AMIR IQBAL “ ““ The process was time-efficient, well-coordinated and This was my first-time experience of the CP cycle at EFERT. an improvement over last year. I may not be able to compare it with previous practices however what I learned from my team is that it has The process followed this time around created reduced a lot of extra work and saved our time from Simplicity but at the same time resulted in Silos. Next unnecessary discussions. time we should send weekly updates to MC so we all In my personal experience, it was a very focused effort and know what changes are happening in other divisions the team had a strong grip on the process. SALMAN GOHEER ARSHIA SAQIB
EFERT: DELIVERING WITH EXCELLENCE The past year has been a challenging year for the whole world where the ongoing COVID-19 pandemic brought the world economy to a standstill. However, with the introduction of SOPs to cope with the pandemic and mass vaccination on the horizon, businesses, and corporates all over the globe are beginning to experience a resurgence. By the grace of Allah, FY2020 has been one of the best in the history of the Company on many fronts. EFERT continued to build its legacy of 50+ years and set records across various spectrum of business endeavors. Our efforts were widely recognized, and we won multiple awards for safety, environmental stewardship, manufacturing, financial reporting, gender diversity and social inclusion. SAFE AND CONTINUED OPERATIONS AMIDST A GLOBAL PANDEMIC Being responsible for more than a third of Pakistan’s agricultural output, we are cognizant of our strategic role in Pakistan’s agricultural landscape. Therefore, we remained committed to accomplishing uninterrupted operations during this challenging year. In this pursuit, the Company developed comprehensive business continuity strategies and practices to combat the virus. With the health and safety of our employees being our utmost priority, the Company continues to operate a special medical help desk facility and on-site quarantine facilities. Furthermore, during the year, the Company took several initiatives to manage the morale of employees, including special recognition for front-line staff, counseling sessions for emotional well-being, and using online platforms for social interaction.
EFERT: DELIVERING WITH EXCELLENCE (CONTD.) CSR EFFORTS TO COMBAT COVID-19 The Company strongly believes that our success lies in addressing the most pressing issues of our time and in line with this belief, the Chairman of Engro Corporation and Dawood Hercules Corporation, Mr. Hussain Dawood, announced a PKR 1 BN PLEDGE to help the country in its time of need. Under this pledge, the Company has made significant contributions to hospitals and NGOs to prevent the spread of this pandemic and enable diagnostic and testing facilities. Under this pledge, we made significant contributions of over PKR 120 MN TO: Indus Hospital Shaukat Khanum Sehat Kahani In addition to the above, the Company has been at the forefront in its efforts against the spread of the pandemic and has taken various initiatives for the prevention of further spread and support our surrounding communities.
EFERT: DELIVERING WITH EXCELLENCE (CONTD.) KEY DEVELOPMENTS IN THE FERTILIZER MARKET On the international front, urea prices recovered by 12% during the year and stood at USD 289/T in December 2020, compared to USD 259/T in December 2019. DAP prices have witnessed a rapid resurgence during the period with prices clocking in as high as USD 375/T by the end of the year. On the local front, domestic urea prices are currently at a discount of 44% to international prices, hovering around PKR 1,717/bag, significantly lower than PKR 2,040/bag at the start of 2020. The local urea market demand stood at 5,989 KT vs 6,201 KT in 2019. This decline can mainly be attributed to significant channel inventory at the start of the year. On the Phosphates front, the industry demand stood at 2,214 KT compared to 2,021 KT in 2019 mainly due to opportunistic buying in anticipation of international supply challenges and a further increase in DAP prices in the upcoming months. COMPANY’S OPERATING PERFORMANCE Below is a snapshot of our performance during the year: 2020 2019 Revenue – PKR Millions 105,846 121,355 Profit after tax – PKR Millions 18,133 16,871 Earnings per share – PKR 13.58 12.64 Urea production - KT 2,264 2,003 Urea Sales – KT 2,006 1,958 Phosphates Sales – KT 465 596 Specialty Fertilizers Sales - KT 201 170 TRIR 0.04 0.05
EFERT: DELIVERING WITH EXCELLENCE (CONTD.) SEGMENT ANALYSIS UREA During the year, the Company achieved a historic milestone of the highest ever urea production of 2,264 KT as compared to 2,003 KT produced in 2019, an increase of 13% primarily due to better plant utilization supported by minimal outage days and higher gas availability. This was achieved on the back of an unwavering focus on plant efficiency and engineering excellence. In 2020, the Company also achieved the highest ever domestic urea sales of 2,006 KT compared to 1,958 KT in 2019, exhibiting an increase of 2% YoY. As a result, our market share improved to 33% for the year compared to 32% in 2019. PHOSPHATES (DAP/ZORAWAR/NP) The Phosphates business witnessed a steep resurgence as the Company turned around the business from a loss of PKR 755 Mn in the first half to a profit of PKR 1.5 Bn. SPECIALTY FERTILIZER BUSINESS (SFB) The SFB division’s sales for the year stood at 201 KT (Zarkhez/MOP/SOP/AS), compared to 170 KT (Zarkhez/MOP/SOP/AS) last year, registering a growth of 18%. The Potash market increased to 50 KT in 2020 from 45 KT in 2019, mainly due to robust potato and sugarcane crop along with lower prices than last year. The Company was able to maintain its market share of 60% in a growing industry. CROP SCIENCES DIVISION (CSD) The Company continued to make inroads in the Seeds and Pesticides business and despite serious challenges faced by the business during the year, the CSD revenue has increased by 4% to reach PKR 1,386 Mn compared to PKR 1,336 Mn in 2019. The Company also entered into strategic partnerships with multinational brands to introduce new high yield and high margin products, to generate value for the Company and its customers. E-LOGISTICS The Company’s logistics business was adversely impacted by the abolishment of the axle load regime. However, the business continues to maintain its focus on improving the standards and bringing operational efficiency. Going forward, the Company remains committed to continuing to play its role in transforming the Agri landscape in Pakistan and providing support to our nation in these testing times. With the combined efforts of each one of us here at EFERT, we aim to deliver on Engro Fertilizer’s immense potential to develop Pakistan’s economy, overcome hindrances and come out on top.
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