FFC Marketing Division
-
Upload
muhammad-bilal -
Category
Documents
-
view
78 -
download
5
description
Transcript of FFC Marketing Division
PrefacePractice is the only tool for bringing perfection in one’s work.
“Theory without perfection is sterile”. Education is a mean for delivering knowledge and training is a way to bring that knowledge into action.
That’s why Internship training is an integral part of MBA degree program. It was a great opportunity to practice and analyze all the learning of MBA from practical perspective.
I have been given the assignment of doing internship in Fauji
Fertilizer Company Ltd, Marketing Division, Lahore. During the internship
period I went through various sections of the Marketing Division
I have also tried my level best to obtain as accurate and precise data
as possible, while keeping the corporate ethics in mind. And to present all,
what I have learnt during my internship, in the following pages. I hope that
this report will be a true representative of my efforts, hard work and will
satisfy the purpose in true spirit for, which it was meant.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Acknowledgement
“Knowledge is in the end based on acknowledgement. “ (Ludwig
Wittgenstein)
First of all thanks to Almighty Allah for enabling me to complete this task. I am thankful to my Teachers at IBA, PU.
For the achievement of th is goal many personal i t ies
have helped me out . I am highly indebted to Fauj i Fert i l i zer
Company l imited who a l lowed me for internship. I am also
very gratefu l to my superv isors Mr. Athar , Mr. Fa isa l Shezad,
Mr. Shehzad Anwar Butt , Mr .R iaz Ahmed Ghuman, Mr.Khal id
Javed, Mr.Maj Pasha, Mr. Inam ul lah, Mr. Ikram, Mr. Qamar, Mr.
Naeem, Mr.Hamid Abbas and a l l s taf f members in Market ing
Div is ion, who guided and helped me a lot throughout th is
internship durat ion.
Without thei r help my report would have been
incomplete.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Dedication
I dedicate this humble effort to the Teacher of the universe (PBUH), by just mere reflection of whose teachings and insight the whole journey of progress of the entire humanity is made possible.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Executive Summary:
FFC, which was established in 1978 as a private limited company, with a vision to acquire self -
sufficiency in fertilizer production for the nation. The company has excellent track record of
excellence and success. Today FFC has highest share in fertilizer market and is one of the top tax
payer of the country. The company has also majority stakes in his sister concern in FFBL.
During my 6 weeks internship I attribute the success of the company to some the following
factors.
One of the country’s most largest and efficient distribution network
Acquiring the best HR talent and further investment on their development
High degree of concerns for employees and community
Working with help of cutting edge technology
The Company is financial very sound, it is considered as blue chip company,
The Company has experienced and professional setup,
Highest share of the fertilizer market in the country, 46%,
Sales revenues are increasing every year
The Company has implemented a sound and effective Internal Control System,
Proper books of accounts are maintained as per statutory requirements,
Monthly trial balances are prepared at 4 different locations and consolidation job is
carried out at Head Office,
Finance/Accounting staff consists of highly qualified professionals,
The Accounting System of the company is designed and installed by a team of people
with many specialized talents,
Internal Audit Department is functioning efficiently and effectively
I have found that from its establishment in 1978, FFC has made unparallel success which is a
bench mark for all the entrepreneurs and companies of nation and its contribution in nation’s
economy and agriculture is really praiseworthy.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Table of ContentsPART 1.........................................................................................................................................................2
INTRODUCTION OF FFC:..............................................................................................................................2
Marketing Division...................................................................................................................................3
NATURE OF THE COMPANY:....................................................................................................................4
Mission Statement...................................................................................................................................4
Corporate Vision......................................................................................................................................4
Quality Policy...........................................................................................................................................5
Nature of the Business................................................................................................................................6
Manufacturing.........................................................................................................................................6
Engineering..............................................................................................................................................7
Marketing................................................................................................................................................8
Subsidiaries companies of FFC...................................................................................................................10
Fauji Fertilizer Bin Qasim Limited..........................................................................................................10
FFC Energy Limited (FFCEL)....................................................................................................................12
FFC HISTORY..............................................................................................................................................14
SUCCESS STORY......................................................................................................................................15
Objectives of the company........................................................................................................................17
ISO-9002................................................................................................................................................18
ISO Certifications...................................................................................................................................19
Strategic Goals.......................................................................................................................................19
Core Values............................................................................................................................................19
Comparison with competitors...............................................................................................................21
An Overview of Sector in Pakistan.............................................................................................................22
Main Fertilizer Producer in Pakistan:.....................................................................................................22
SPOT ANALYSIS OF FERTILIZER SECTOR.....................................................................................................22
FERTILIZER INDUSTRY’S PERFORMANCE................................................................................................22
DEMAND VS SUPPLY..............................................................................................................................23
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
GAS SUPPLY...........................................................................................................................................23
Incentives Offered To Fertilizer Industry...............................................................................................24
PRODUCT WISE, DOMESTIC PRODUCTION................................................................................................25
Import of Fertilizers...................................................................................................................................26
MAJOR FERTILIZER PRODUCERS IN PAKISTAN...........................................................................................27
Engro Chemical Pakistan Limited...........................................................................................................27
ENGRO ASAHI POLYMER & CHEMICAL LIMITED (EAPCL).......................................................................28
DAWOOD HERCULES CHEMICALS LIMITED............................................................................................28
COMPETITORS ACTIVITIES.........................................................................................................................30
ECPL.......................................................................................................................................................30
DHCL......................................................................................................................................................31
NFML.....................................................................................................................................................32
Al-Hamd Chemicals................................................................................................................................32
Pak Arab Fertilizers................................................................................................................................32
Azgard....................................................................................................................................................33
Jaffer Brothers Limited..........................................................................................................................33
Private DAP Importers...........................................................................................................................33
Part II.........................................................................................................................................................35
COMPANY MANAGEMENT SYSTEM...........................................................................................................35
Structure of Marketing Division Lahore.....................................................................................................36
Company Information...............................................................................................................................37
Policy Formulation Process-Meetings........................................................................................................40
Meetings of the Board (At Corporate Head Office)...............................................................................40
Meetings (At Marketing Head Office)....................................................................................................41
MANAGERIAL PRACTICES,.........................................................................................................................42
Functions and Powers of Board of Directors:........................................................................................42
MANAGERIAL POLICIES..............................................................................................................................43
Audit Practices.......................................................................................................................................43
Policies for Attracting Deposits..............................................................................................................43
Policy Statement of Ethics & Business Practices....................................................................................43
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Human resource practices:........................................................................................................................44
Recruitment...........................................................................................................................................44
Hiring:....................................................................................................................................................44
Training:.................................................................................................................................................45
Job assessment......................................................................................................................................45
Factors to be considered judge the performance of the employees.....................................................46
Personal.................................................................................................................................................49
Employees Development:......................................................................................................................50
Pay Structure:........................................................................................................................................50
Major managerial policies, practices/styles...............................................................................................51
Marketing and Sales Policies.................................................................................................................51
Human Resource Policy.........................................................................................................................51
Financial Policies....................................................................................................................................51
Customer Relationship Policies..............................................................................................................52
Internal Department Policies.................................................................................................................52
POLICIES REGARDING EMPLOYEES AND DESIGNATION.........................................................................52
Facilities to Employees..........................................................................................................................52
GROWTH OPPORTUNITIES/ CAREER LADDER............................................................................................60
PROMOTION..........................................................................................................................................60
Job Satisfaction:.........................................................................................................................................60
Part 3.........................................................................................................................................................62
MANAGING THE ORGANIZATION..............................................................................................................62
MANAGERIAL STYLES.............................................................................................................................62
Organizational Culture:..........................................................................................................................62
Centralization/ Decentralization:...........................................................................................................62
Consultative & autocratic......................................................................................................................63
Employees Relationship.........................................................................................................................63
Decision Making....................................................................................................................................63
Planning.................................................................................................................................................64
Controlling.............................................................................................................................................64
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Innovation.............................................................................................................................................65
Communication.....................................................................................................................................65
IMPACT OF MANAGEMENT STYLES ON EMPLOYEES:......................................................................67
MORALE AND PRODUCTIVITY................................................................................................................67
Motivation.............................................................................................................................................67
Morale and productivity........................................................................................................................68
Promotion..............................................................................................................................................69
CRITICAL ANALYSIS OF ORGANIZATIONAL CULTURE AND MANAGEMENT STYLES....................................69
Part 4.........................................................................................................................................................71
Plant Sites and Production Facilities..........................................................................................................71
Production Facilities..............................................................................................................................71
Plants Goth Machhi...............................................................................................................................73
Plant Mirpur Mathelo............................................................................................................................74
Plant Fauji Fertilizer Bin Qasim Limited.................................................................................................75
Capacity Utilization................................................................................................................................76
Production/Sale at a glance...................................................................................................................80
Bottle neck problem at GOTH Machi:....................................................................................................82
Part 5.........................................................................................................................................................84
MARKETING MIX........................................................................................................................................84
FFC Product Mix........................................................................................................................................85
FFC PRODUCTS..........................................................................................................................................85
FFBL PRODUCTS (Marketed By FFC)......................................................................................................85
SONA UREA............................................................................................................................................85
SONA DAP..............................................................................................................................................86
FFC SOP..................................................................................................................................................87
Product strategies.................................................................................................................................88
PRICE.........................................................................................................................................................89
PRICING STRATEGIES.............................................................................................................................89
PLACEMENT...............................................................................................................................................90
Distribution............................................................................................................................................90
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Objectives..............................................................................................................................................90
Sales Promotion.........................................................................................................................................94
Marketing Services................................................................................................................................94
Means....................................................................................................................................................95
Media used at FFC for promotion..............................................................................................................95
Electronic Media....................................................................................................................................95
Radio......................................................................................................................................................96
CCTV......................................................................................................................................................96
Print Media............................................................................................................................................96
Road side Advertisement.......................................................................................................................97
Point of Purchase...................................................................................................................................97
Corporate Social Responsibility at FFC.......................................................................................................98
CSR Objectives.......................................................................................................................................98
Current CSR Interventions.....................................................................................................................99
Free Medical Camps..........................................................................................................................102
Flood Relief and Rehab...........................................................................................................................108
Relief to flood effectees in district Rahim Yar Khan and Ghotki....................................................108
Distribution of Dry Ration by FFC..................................................................................................108
Safety and Environment..........................................................................................................................110
Philosophy:..........................................................................................................................................110
Achievements:.....................................................................................................................................111
Program:..............................................................................................................................................111
FUTURE OUTLOOK...................................................................................................................................112
Part 6.......................................................................................................................................................115
Company Financial Analysis.....................................................................................................................115
Finance & Accounting System of FFC...................................................................................................115
Finance System of the Organization....................................................................................................116
Use of electronic data in decision making...........................................................................................116
Ratio Analyses.........................................................................................................................................118
1-Liquidity Ratios.................................................................................................................................118
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
2- Financial Leverage Ratios....................................................................................................................120
3-Coverage Ratio.....................................................................................................................................123
4-Activity Ratios...................................................................................................................................124
5-Profitability Ratios............................................................................................................................127
6-Market Ratios...................................................................................................................................131
Ratios at Glance.......................................................................................................................................134
INDEX ANALYSIS......................................................................................................................................135
Comments...............................................................................................................................................137
COMMON SIZE ANALYSIS........................................................................................................................138
General Commentary on Financial condition......................................................................................140
Financial Industry Analysis.......................................................................................................................141
Comparison with Key Competitor (Engro Fertilizer Limited)...............................................................141
Part 7: Training........................................................................................................................................144
Distribution Department.........................................................................................................................144
Challenges:..........................................................................................................................................146
Plans:...................................................................................................................................................146
Procedure of assigning new dealership in FFC:....................................................................................146
Criteria for assigning new dealership in FFC:.......................................................................................147
Criteria used for setting sales target in FFC:........................................................................................147
Strategies used by FFC for achieving the sales target (At regional level):............................................147
Strategies used by FFC for brand positioning (At regional level):........................................................148
Objectives:...........................................................................................................................................148
Transportation Arrangements.............................................................................................................148
Warehousing Department.......................................................................................................................150
Functions of warehousing department...............................................................................................150
Types of warehouses...........................................................................................................................151
Objectives............................................................................................................................................155
Functions.............................................................................................................................................155
Other Department Activities................................................................................................................155
Finance Department................................................................................................................................157
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Order Processing System.....................................................................................................................158
Order Processing Through Road:.........................................................................................................158
GENERAL ACCOUNTING SYSTEM.........................................................................................................160
Functional Workflow...........................................................................................................................160
Disbursement:.....................................................................................................................................161
Sales Accounting..................................................................................................................................163
Objectives............................................................................................................................................163
SALES ACCOUNTING SYSTEM...............................................................................................................164
Bank guarantee.......................................................................................................................................164
Ways of collection...............................................................................................................................165
Sales Accounting (Workflow)...............................................................................................................166
Customer Order (CO)...........................................................................................................................166
Financial Instruments..........................................................................................................................166
Administration Department....................................................................................................................168
General Administration:......................................................................................................................169
Human Resource Department.................................................................................................................171
Functions.............................................................................................................................................172
Labor and Legal Affairs Department (LLA)...............................................................................................174
Procurement Department.......................................................................................................................175
GOALS..................................................................................................................................................175
FUNCTIONS..........................................................................................................................................175
PROCEDURES INVOLVED IN PROCUREMENT STEPS.............................................................................176
Advertisement and Sales Promotion Department...................................................................................177
Objectives............................................................................................................................................177
ADVERTISING & SALES PROMOTION TOOLS........................................................................................178
Corporate Social Responsibility Department (CSR)..................................................................................181
CSR Objectives.........................................................................................................................................181
Information technology (IT) Department................................................................................................184
OBJECTIVES OF IT UNITS......................................................................................................................184
SYSTEMS DEVELOPED BY I.T UNITS......................................................................................................184
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
SAP Department......................................................................................................................................185
Modules acquired by FFC:...................................................................................................................186
Regional Office (LHR)...............................................................................................................................187
Activities..............................................................................................................................................188
Sales (NZ).................................................................................................................................................189
Total Regions 5..........................................................................................................................191
Functions of North zone......................................................................................................................191
PLANNING DEPARTMENT...................................................................................................................192
Planning department functions:..........................................................................................................192
Daily Reports.......................................................................................................................................194
Weekly / Fortnightly Reports...............................................................................................................195
Monthly, Quarterly & Annual Reports.................................................................................................195
Analysis of FFC (comparison to key Competitors with reference to DATA BOOK)...................................196
Pakistan Urea Off take Agency Wise .All amount in 000'mt....................................................................197
Pakistan Urea Market Participation (%)...................................................................................................198
DAP Consumption Pattern In Pakistan.....................................................................................................199
Company wise/ Provine wise Urea offtake (qty in 000'mt for 2009).......................................................200
Share Holding Pattern of FFC:..................................................................................................................201
Gross Margins with respect to industry:..................................................................................................202
Comparison With Engro (Key Competitor)..............................................................................................203
STRATEGY FORMULATION FRAMEWORK................................................................................................205
STAGE: 1..................................................................................................................................................206
INPUT STAGE...........................................................................................................................................206
Internal Factor Evaluation (IFE) Matrix....................................................................................................207
EXTERNAL FACTOR EVALUTATION (EFE) MATRIX....................................................................................209
COMPETITIVE PROFILE MATRIX (CPM):...............................................................................................210
INTERPRETATIONS:..............................................................................................................................210
STAGE: 2..................................................................................................................................................211
Matching Stage....................................................................................................................................211
SWOT MATRIX.........................................................................................................................................212
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
SPACE MATRIX.........................................................................................................................................214
Conclusion...........................................................................................................................................214
Interpretation......................................................................................................................................215
The Boston Consulting Group (BCG) Matrix:...........................................................................................216
Interpretation:.....................................................................................................................................218
The Internal – External (IE) Matrix..........................................................................................................219
Interpretations....................................................................................................................................219
GRAND STRATEGY MATRIX......................................................................................................................220
FFC is located in the first quadrant of the matrix are in excellent strategic position and the market growth is high..................................................................................................................................220
DECISION STAGE......................................................................................................................................222
The Quantitative Strategic Planning Matrix: (QSPM)...............................................................................223
Interpretation:.....................................................................................................................................224
PORTERS’ FIVE FORCES MODEL...............................................................................................................225
Supplier Power....................................................................................................................................225
Buyers Power.......................................................................................................................................225
Potential Entrants................................................................................................................................225
Suitability of Alternatives: Imported fertilizer is as suitable as the industry products.........................226
Rivalry..................................................................................................................................................226
Problems and Recommendations............................................................................................................227
Marketing Division: Department wise Problems and Recommended Solutions..................................227
General recommendations......................................................................................................................230
Conclusion:..............................................................................................................................................231
References & Sources Used.....................................................................................................................233
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Part ONE
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
PART 1
INTRODUCTION OF FFC:
With a vision to acquire self - sufficiency in fertilizer production in the country, FFC was
incorporated in 1978 as a private limited company. This was a joint venture between Fauji
Foundation (a leading charitable trust in Pakistan) and Haldor Topsoe A/S of Denmark.
The initial share capital of the company was 813.9 Million Rupees. The present share capital of
the company stands above Rs. 8.48 Billion. Additionally, FFC has more than Rs. 8.3 Billion as
long term investments which include stakes in the subsidiaries FFBL, FFCEL and associate
FCCL.
FFC commenced commercial production of urea
in 1982 with annual capacity of 570,000 metric
tons.
Through De-Bottle Necking (DBN) program,
the production capacity of the existing plant
increased to 695,000 metric tons per year.
Production capacity was enhanced by
establishing a second plant in 1993 with
annual capacity of 635,000 metric tons of
urea.
FFC participated as a major shareholder in a
new DAP/Urea manufacturing complex with
participation of major international/national
institutions. The new company Fauji Fertilizer Bin Qasim Limited (formerly FFC-
Jordan Fertilizer Company Limited) commenced commercial production with effect
from January 01, 2000. The facility is designed with an annual capacity of 551,000
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
metric tons of urea and 445,500 metric tons of DAP, revamped to 670,000 metric tons
of DAP.
In the year 2002, FFC acquired ex Pak Saudi Fertilizers Limited (PSFL) Urea Plant
situated at Mirpur Mathelo, District Ghotki from National Fertilizer Corporation
(NFC) through privatisation process of the Government of Pakistan. It has annual
production capacity of 574,000 metric tons urea which has been revamped to 718,000
metric tons urea in 2009.
This acquisition at Rs. 8,151 million represented the largest industrial sector
transactions in Pakistan at that time.
Marketing DivisionFFC Marketing Division was established in July
1978. It is responsible for all the marketing
operations including planning, sales, distribution
and warehousing, advertising and sales promotion,
finance, IT, administration and technical/farm
agronomic services. The company markets its own
prilled urea and the entire production of granular
urea and DAP produced by Fauji Fertilizer Bin
Qasim Ltd. under the brand name of "Sona". In
addition, the company also market imported
nitrogenous, phosphatic, potassic fertilizers and
micro-nutrients. FFC is the only fertilizer company
which operates all over the country with an extensive network of field warehouses and dealer
network.
Presently FFC market over 3.8 million tons of all fertilizers per annum with 62% urea market
share and 42% DAP market share. Today, Sona is the most popular and premium fertilizer brand
in the country and is widely accepted by the farming community. The Marketing Division has a
well organized, trained and experienced team which is fully capable of handling and profitably
selling large volumes of fertilizers in different market situations.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
NATURE OF THE COMPANY:The company is a public company incorporated in Pakistan under the Companies Act, 1913,
(now the Companies Ordinance, 1984 and its shares are quoted on the stock exchanges in
Pakistan). The principal activity of the company is manufacturing, purchasing and marketing of
fertilizer, including investment in other fertilizer manufacturing operations.
Mission Statement
Corporate Vision
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
FFC is committed to play its leading role in industrial and agricultural advancement in Pakistan by providing quality fertilizers and allied services to its customers and given the passion to excel, take on fresh challenges, set new goals and take initiatives for development of profitable business ventures.
FFC's vision for the 21st Century remains focused on harmonizing the Company with fresh challenges and
encompasses diversification and embarking on ventures within and beyond the territorial limits of the Country
in collaboration with leading business partners.
Quality Policy
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Nature of the Business
Manufacturing
The largest urea manufacturing facility of Pakistan consisting of two ammonia/urea units owned
by FFC, is built at Goth Machhi in district Rahim Yar Khan.Goth Machhi is situated at a distance
of 2 kms from the main Lahore-Karachi highway and is adjacent to the main railway line.
The two plants are based on natural gas from Mari Gas Fields and have an annual designed
production capacity of 1.3 million tons of urea.
Over the years, the plants have demonstrated an operational excellence which has become a
reference for the engineering companies whose process technologies are used here. Delegations
from China, Middle East and Far East keep visiting the plant site for gaining first hand
knowledge before deciding to purchase a new plant.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Nature Of the Business
Maunfacturing Engineering Marketing
Engineering
After the successful start-up of the first plant in mid 1982, a group of selected engineers was
assigned to Technology Division-TD (then called CED) Head Office with the objective of
providing engineering and technical backup to the plant operations.
Additional responsibilities that are assigned to TD, include monitoring plant performance,
development of new projects, handling capital investment projects, advising management on
technical matters and development of a technological base along with consultancy functions.
Since 1982, TD has made tremendous progress in the field of Plant Engineering, Project
Management, Project Feasibilities and Project Development.
The development of TD was equally supported by the FFC management which has recognized
the need to promote research and technological development activities.
TD is manned by a team of highly trained project engineers, process engineers and IT specialists.
Nearly half of the strength is located at the plant to provide on-the-spot assistance to the
manufacturing units besides feeding vital plant data to the Head Office for immediate processing.
TD is equipped with latest computing facilities along with engineering software from world
famous engineering designer M/s Haldor Topsoe of Denmark and other technical software
purchased from the engineering companies as well as in-house developed software related to
engineering and other general purpose need of the company. This technology enables TD to
undertake detailed process/engineering design related assignments and to provide most valuable
assistance to other departments within the company.
TD most significant contributions to date have been successful project management of FFC
Project 1 debottlenecking, FFC Plant Expansion Project 2 and the Fauji Fertilizer Bin Qasim
(formerly FJFC) Project. TD's role in all projects starts from the conceptual stage and concludes
at the successful commissioning and handing over of the project to the Operation Group. The
success achieved so far by TD proves that FFC now possesses requisite in-house capabilities to
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
ensure successful completion of large scale projects within allocated budgets and assigned
project schedules.
Marketing
Marketing Division, setup in July, 1978 is responsible for all marketing operations including
planning, distribution, sales, farm advisory services, field warehousing, finance and
administration. With the commencement of commercial production in June 1982, the company
started marketing its urea under the brand name "Sona".
The company markets not only Sona urea but also imported nitrogen, phosphate and potash
based fertilizers.
The Company is also marketing half a million tonnes of sona urea granular manufactured by
Fauji Fertilizer Bin Qasim (formerly FFC - Jordan Fertilizer Co. Ltd). When FFC came into the
market with its production in June 1982, the other manufacturers namely Engro, Dawood
Hercules and National Fertilizer Corporation were already well established in the market. The
brands of Engro (Engro) and Dawood Hercules (Babber Sher) were considered premium brands
in Sindh and Central Punjab respectively. FFC had to face very tough competition from the
beginning. This competition coupled with the huge surplus of urea in the domestic market posed
a great challenge to the company in the initial years. FFC not only met the challenge by
capturing the desired market share but in the process, enhanced the brand image of its product
Sona urea which has become the number one brand. During the period 1983 to 1986 when a
large urea surplus existed in the country, FFC pioneered urea exports which not only helped in
stabilizing domestic urea but also earned valuable foreign exchange for the country.
The Government of Pakistan deregulated the trade and prices of phosphatic fertilizers on 21
August 1993. Subsequent to this decision FFC started import of these fertilizers and as a result
timely supplies were arranged. Farmers were thus provided with quality product in bags with
guaranteed correct weight and this brought about a very positive qualitative change in the
phosphatic fertilizer business in the country. The Marketing Division now has the necessary
expertise to handle fertilizer imports and exports.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
FFC believes in selling a programme rather than just a product. For this, the company has
adopted a customer oriented strategy, marketing quality products backed by efficient and
effective support services with emphasis on developing the market through practical and
innovative farmer education.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Subsidiaries companies of FFC
Fauji Fertilizer Bin Qasim Limited
FFC Energy Limited
Fauji Fertilizer Bin Qasim Limited
Fauji Fertilizer Bin Qasim Limited is a US$ 461 Million Project, one of the largest in private
sector in Pakistan, producing both DAP and Granular Urea for the first time in the country. The
project is sponsored by the largest and well known industrial group of Faujis and Jordan
Phosphate Mines Company.
Joint Venture
Office Cherifien des Phosphates (OCP) Group of Morocco and Fauji Group including Fauji
Foundation, Fauji Fertilizer Company Limited and Fauji Fertilizer Bin Qasim Limited, have
entered into a Joint Venture Company in Morocco named “Pakistan Maroc Phosphore S.A” with
equity of 800 Million Moroccan Dirhams. The proposed project is planned to be located at Jorf
Lasfar , Morocco , where OCP already has a large chemical complex. This Project will produce
375,000 MT Phosphoric Acid per year by consuming 1,300,000 MT Phosphate Rock and
370,000 MT Granular Sulfur. It is not a grass root project and will utilize basic infrastructure and
ancillary facilities already present at Jorf Lsafar Site. The cost of the project is estimated at US$
203 Million and is likely to start commercial production by early 2007. It will meet total
requirement of phosphoric acid for the DAP production in FFBL plant at Bin Qasim.
Fauji Fertilizer Bin Qasim Limited at a glance
FFBL has the distinction of producing 13% of urea and 31% of Di-Ammonia Phosphate
of the country's total requirement.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Termination agreement with Jordan Phosphate Mines Company Limited (JPMC) was
signed on 24/06/2007, with the same JPMC is no more a partner or equity holder in the
Company.
A long term agreement for the Supply of Phosphoric Acid between Maroc Phosphore
S.A, a wholly owned subsidy of Office Cherifien Des Phosphates, Morocco was signed
on July 21, 2007.
DAP Plant recommenced its production on September 22, 2007 and supply of DAP in the
market started thereto.
Products of FFBL SONA GRANNULAR
SONA DAP
Sona Granular
FFBL produces 13% of total production
SONA DAP
FFBL produces 31% of country’s demand. It is the sole producer of DAP
Fauji Fertilizer Bin-Qasim Limited (FFBL) has its plant in Karachi at port qasim. It has contract
with Fauji Fertilizer Company Limited (FFCL) for the distribution and marketing of its products
in Pakistan. It has two main products; Sona Urea (Granular) and DAP. FFBL exports its products
and imports the products when needed in fertilizer market. It has also setup for the distribution of
its products through Pakistan Railway (PR).
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
FFC Energy Limited (FFCEL)
FFCEL, a separate wholly owned company, has been incorporated in November 2009 to develop
the wind power project with estimated investment of US$ 130 million. This project is being
installed at Jhimpir, Distt. Thatta, Sindh with capacity to produce 50 MW electricity for onward
supply to National Transmission & Dispatch Company (NTDC) to cater for energy needs of the
Country.
Engineering, Procurement &
Commissioning contract has been
negotiated and initialed with the selected
bidder Nordex, Germany and Operation
& Maintenance contract is under
negotiation. The Energy Purchase
Agreement and Implementation
Agreement have been negotiated with
NTDC and Alternate Energy
Development Board respectively.
Applications for generation license and
tariff petition are under preparation. Final
Term Sheet for financing of the project has been received from consortium of local banks for
review and acceptance. The financial close is expected to be achieved by June 2010 while the
construction, testing and commissioning phase is projected to take 16 months after the financial
close. The project is scheduled to commence commercial production by end of 2011.
FFCEL is a fully owned subsidiary of Fauji Fertiliser Company Limited (FFC), while Nordex
AG is a leading manufacturer of Wind Turbines in the world. Founder and Chief Sales Officer of
Nordex Carsten Pedersen and Lieutenant General Malik Arif Hayat (Retd) CE & MD, FFC &
FFCEL exchanged the contract documents, a press release issued here said.
FFC has further planned to develop and establish more renewable energy projects in Pakistan to
contribute towards fulfilling Pakistan’s electricity needs through captive renewable resources. To
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
that end, FFC has already obtained Letter of Intent (LOI) of additional 100 MW Wind Power
Projects from AEDB.
Lahmeyer International (LI) as Consultant The Government of Pakistan has clearly articulated its support for the development of
renewable energies. Due to the fact that the use of wind energy is actually the most economical
one among the renewable energy production techniques, the focus is on supporting the
development of wind farms.
Fauji Fertilizer Company (FFC), one of the largest companies in Pakistan, is entering the wind
energy market by developing a 50 MW wind farm. To prove the feasibility of the chosen site,
FFC has engaged Lahmeyer International (LI) as Consultant. LI is elaborating the feasibility
study, supervising the wind measurements initiated by FFC and preparing conceptual design of
wind farm.
Within the range of this report, the environmental aspects of the Jhimpir project site are updated
and elaborated. One main outcome of the study is the result that FFC Wind Power Project has no
adverse impact on the environmental and social life of Jhimpir, Sindh. Instead it will be utilizing
the wind potential of that unutilized barren land for electricity generation through renewable
resources, thus helping in improving the environment.
Environmental Impact AssessmentThe Jhimpir site area for FFC Wind Farm is selected by Alternative Energy Development Board,
GoP in consultation with Government of Sindh for wind farming. The land is totally un-
inhabited and there is no issue of loss of habitat and resettlement. The Jhimpir site area for FFC
Wind Farm is a barren land with only a few self growing stunted bushes covering small portions
of the land. The land is rocky and has a very deep water table of around 115 m (350 feet), so
possibility of vegetation in that area is unlikely.
There is no wild life sanctuary, protected area, wild life park or known habitat of any kind,
especially there is no endangered specie is found in the region, mainly due to scarcity of water.
There is no irrigation / drinking water network (canal, lake, pond, etc) in FFC wind farm and the
ground water also is very deep approx. at 115 m (350 feet) depth. So there is no threat of any loss
of habitat due to development of FFC Wind Farm.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
FFC HISTORY
FFC was incorporated on May 8, 1978.
Based Unit at Goth Machhi commenced commercial production in June 1982 with annual
designed capacity of 570 thousand tones urea.
Based Unit up-graded in April 1992 to produce 695 thousand tones annually.
Expansion Unit at Goth Machhi commenced commercial production in March 1993 with
designed capacity of 635 thousand Tonnes.
FJFC founded in November 1993 with initial contribution of Rs. 1 billion. The
company’s investment in FJFC now stands at over RS 4 billion.
PSFL acquired on May 31,202 and merged with FFC on July 1,2006. Situated at Mirpur
Mathelo the plant has annual designed production capacity of 574 thousand tones.
The aggregate designed production capacity of FFC is three plants now stand at almost 2
million tones annually.
Since inception to 2006, FFC has produced and marketed 21million tones of urea. In
terms of import substitution this has resulted in national savings of well over 3 billion
dollars in foreign exchange.
Since inception the company has contributed Rs. 42 billion to the national exchequer in
the form of taxes and government levies.
The company earned a net profit after tax of over Rs. 3 billion for the fifth time since
inception, including 2006.
The company was the highest tax payer in the corporate Sector ub 1993/1994.
Since inception the company has sold/marketed almost 28 million tones of fertilizers.
FFC is the only company providing Mobile Farm Extension Services at the farmers,
door-step since 1986.
21.5 million Man-hours of operation without injury were achieved in 2007, the highest
ever.
The company’s annual Reports have been adjudged as one of the best reports in the
Chemical sector twice by joint committee of ICAP/ICMAP.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
The Company was listed on Karachi and Lahore Stock Exchanges in 1991 and on
Islamabad Stock Exchange in 1992. Company employees were also allotted shares for
motivation and promoting a sense of participation. Based on related criteria of Karachi
Stock Exchange, primarily quantum of dividend payout, FFC has been placed in the list
of top 25 companies of Pakistan consecutively for seven years since 1994, topping the list
in 1997.
FFC has many landmarks to its credit. Since commencement of its commercial
production in mid June 1982 till December 2000, the Company has sold 22.89 million
tons of fertilizers. This includes 17.79 million tons of Sona urea and 0.52 million tons
Sona DAP in the domestic market and 0.39 million tons urea exports to China, Iran,
Philippines, India, Bangladesh, Sri Lanka, Thailand and Tanzania. The remaining 4.19
million tons include imported fertilizers i.e. urea, DAP, NP, etc. Presently, it is marketing
over 2 million tons of fertilizers annually and holds 44% share of the urea market. It has
saved the country around US $ 3 billion through import substitution and contributed
almost Rs. 30 billion to the Government by way of taxes, levies, custom duties, excise
duty/ surcharge on gas purchases besides providing employment to hundreds of
individuals.
SUCCESS STORY
FFC commenced commercial production of urea in 1982 with annual capacity of 570,000 metric
tons.
Through De-Bottle Necking (DBN) program, the production capacity of the existing
plant increased to 695,000 metric tons per year.
Production capacity was enhanced by establishing a second plant in 1993 with annual
capacity of 635,000 metric tons of urea.
FFC participated as a major shareholder in a new DAPS/Urea manufacturing complex
with participation of major international/national institutions. The new company Fauji
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Fertilizer Bin Qasim Limited (formerly FFC-Jordan Fertilizer Company Limited)
commenced commercial production with effect from January 01, 2000. The facility is
designed to produce 551,000 metric tons of urea and 445,500 metric tons of DAP.
This excellent performance was due to hard work and dedication of all employees and the
progressive approach and support from the top management.
In the year 2002, FFC acquired ex Pak Saudi Fertilizers Limited (PSFL) Urea Plant
situated at Mirpur Mathelo, District Ghotki from National Fertilizer Corporation (NFC)
through privatization process of the Government of Pakistan.
This acquisition at Rs. 8,151 million represents one of the largest industrial sector
transactions in Pakistan
Recently Fauji Fertilizers Company offered the highest bid of Rs 8.151 billion for the
Pak-Saudi Fertilizers Limited here on Saturday. Second highest bidder was the Dawood
Hercules that offered Rs 3.78 billion while the lowest bid of Rs 3.602 billion was
received from Engro Chemicals. In simple words Fauji Fertilizers Company offered Rs
4.50 billion rupees more than Engro and Rs 4.371 billion more than Dawood Hercules in
bidding for Pak-Saudi Company. Sealed bids for the privatization of Pak-Saudi Fertilizer
Company were opened by journalists on the request of Privatization Minister in the
presence of bidders, senior government officials and private sector representatives. Three
companies, Fauji Fertilizers, Engro Chemical and Dawood Hercules filed bids for the
said company. Fauji Fertilizers offered Rs 135.85 for each share of the Pak-Saudi
Company, Dawood Hercules offered Rs 70 per share, while Engro Chemical offered Rs
66.70 for a share. Seeing a far high difference in the price offered by Fauji Fertilizers, the
other two bidders did not take interest in contesting privatization of the said company and
wished a good luck for FFC.
Announcing price offers by the private sector, Minister for Privatization Altaf Saleem
declared the Fauji Fertilizers Company as the highest bidder that intends to buy 100
percent shares.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Objectives of the company
Build leadership in Plant performance
Expand sales
Create new businesses
Maintain operational efficiency to achieve synergies
Economize on costs by eliminating duplication of resources
To sustain its role as market leader in urea production and marketing.
To deliver exclusive values and services to the shareholders and customers through its
strategies
To place great value on social responsibilities and welfare
To develop a culture based on principles of honesty, integrity, fairness and respect.
To create the agricultural awareness in farmers through media and training.
To provide farmers technical services through technical services department free of cost.
To hire and retain satisfied workforce
To make FFC and FFBL production profitably all over the country
Imports to round out product slate
Conduct business in clean/ethical manner and on private corporate sector professional
lines
Augment profitability for sustained economic growth
Outperform the Industry
Maintain strong brand and favorable company image
Build a strong marketing team by developing people to sustain efforts into the future
Drive land productivity through balanced fertilizer application
Continue efforts for market development
To play a vital role in agricultural development of the country
To provide the quality products
To set high standards for production and sale and achieve these objectives
To be environment-friendly organization
To promote education in the farmers community by awarding merit scholarships.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
To help upgrade the capability of fertilizer research, extension and marketing personnel
in the transfer of fertilizer technology.
To provide a neutral common platform to resolve contentious issues in fertilizer sector.
Our flexible and dynamic corporate strategy strives for enhancing customer satisfaction by
adding value over the long run. We aim at creating value for the stakeholders by maintaining and
improving our competitive position in the market. This is achieved by focusing on our
‘sustainable competitive advantage’ that is derived by continuously assembling and exploiting an
appropriate combination of resources and capabilities in response to the changing market
conditions. Our organizational culture is one of our most fundamental competitive advantages.
We have built and preserve an innovation-adept culture, a culture that promotes transparency and
accountability through honesty, integrity and diligence in our dealing with employees,
customers, financial markets, Government, regulatory authorities, and all the other stakeholders.
We consider diversification of our product line as a major factor behind corporate sustainability
in the ever changing market scenario. Diversification in business line is also being considered.
Our unique corporate strategy gets aligned with the resource allocation system and flows down
to the operational levels, thus ensuring its implementation at all levels along with the
achievement of the intended results.
ISO-9002
Another major landmark for Fauji Fertilizer Company is ISO-9002 certification for its
manufacturing division at Goth Machhi. Quality in all areas has been a hallmark of the Company
right from the beginning and our product "SONA UREA" has already established its rightful
place in the market.
Therefore, to bring our system in line with internationally recognized quality standards, we
decided to go for ISO-9002 certification.
To achieve a total quality management system, we surpassed the requirement of ISO-9002
standards by including all support services like Administration, Personnel, Finance, Hospital,
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Schools and Management Club etc. also in the certification scope.We selected Bureau of Veritas
Quality International (BVQI), England, a leading certification agency as our registrar. BVQI is
honored by various accreditation authorities of the world.
Quality Management System of FFC got ISO certified in its first attempt during November 1997
with the honor of being the 1st Fertilizer Plant in Pakistan. Since then we have not looked back.
We have passed all surveillance audits with commendable remarks from our registrar. Since 21
February, 2001 Quality Management System of FFC now stands recertified (ISO 9002) by BVQI
after successful completion of initial certification period of 3 years.
ISO Certifications Sr. No Certification Name Brief Description of Certifications
1 ISO-9001:2000 Quality Management System
2 ISO 14001:1996 Environmental Management System
3 OHSAS 18001:1999 Occupational Health & Safety Assessment
Series
Strategic Goals Drive land productivity through balanced fertilizer application
Build leadership in Plant performance
Expand sales
Create new businesses
Maintain operational efficiency to achieve synergies
Economize on costs by eliminating duplication of resources
Augment profitability for sustained
Core Values FFC seeks uncompromising integrity through each individual’s effort towards quality product
for its customers and sizable contribution to the national exchequer. Business success of FFC is
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
dependent on trusting relationships. The reputation is founded on the integrity of the Company’s
personnel and our commitment to the principles of:
• Honesty in communicating within the Company and with our business partners, suppliers and
customers, while at the same time protecting the Company’s confidential information and trade
secrets.
• Excellence in providing high-quality products and services to customers.
• Consistency is always there in words and deeds.
• Compassion in relationships with employee of FFCs and the communities affected by the
business.
• Fairness to the fellow employees, stakeholders, business partners, customers and suppliers
through adherence to all applicable laws, regulations and policies and a high standard of FFC.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Comparison with competitors
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
An Overview of Sector in PakistanPakistan is an agricultural economy. The importance of fertilizer in agrarian economy is above
abroad. It has population of over 150 millions, land of 796096 km square and Population with
agricultural profession 70 %.
Main Fertilizer Producer in Pakistan:
1. Fauji Fertilizer Company (FFC)
2. Fauji Fertilizer Bin Qasim (Pvt) Ltd. (FFBL)
3. National Fertilizer Corporation of Pakistan (Pvt) Ltd.
4. Dawood Hercules (DH)
Market Share
Fauji 46%
Engro 20%
Dawood 10%
Others 10%
SPOT ANALYSIS OF FERTILIZER SECTOR
FERTILIZER INDUSTRY’S PERFORMANCEThree leading manufacturers of urea in the country have released their accounts for the first half
of 2005. It was encouraging to note that urea off-take during these six months increased by 18
per cent as compared to the corresponding period last year. But, according to the manufactures,
the demand has flattened out gradually. Still the off-take was comparable with the consumption
in the pervious two years. Indigenous production of urea has improved requiring lesser import of
the commodity. The demand for phosphatic fertilizer took a quantum leap registering a 16 per
cent increase.
Various types of fertilizers are used in the country but urea remains the commodity with in the
largest demand sector. The urea market is dominantly shared by three manufacturers namely,
Fauji Fertilizer Company Limited, Dawood Hercules Chemicals Limited, Engro Chemical
Pakistan Limited. All the three are listed at the Karachi Stock Exchange. Fauji has the largest
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
production capacity and contributed 46 per cent of the total sale in 1997 followed by Engro 20
per cent and Dawood 11 per cent. The other manufacturer controlling any significant market
share is Pak Saudi Fertilizer. FFC-Jordan Fertilizer Company Limited is a joint venture between
Fauji Fertilizer Company and a Jordanian company.
DEMAND VS SUPPLY The demand for urea has been increasing consistently and significantly. This is due to two
factors: the government of Pakistan (GoP) besides offering various incentives to the fertilizer
manufacturers to keep the cost of production low also extending soft term loans to growers for
the purchase of various inputs. The manufacturers have been able to take the fullest advantage of
the GoP policies and have expanded the production capacities over the years. This, on the one
hand, has helped the country in achieving self sufficiency in the production of urea and, on the
other hand, has reduced the foreign exchange expenditure on import of the product.
Consumption of urea is seasonal. In the past, during the peak consumption period, some
unscrupulous elements used to indulge in black marketing of the commodity. However, with the
enhanced availability of indigenously produced urea and an elaborate dealer’s network the
manufacturers have been able to minimize such incidence.
GAS SUPPLY One of the factors responsible for phenomenal increase in the indigenous production of urea is
the policy of the government regarding supply of gas (feedstock) at concessional rate. The policy
has benefited the country.
When the first urea manufacturing plant was established in the country in 1967 by Exxon
Chemical, its installed capacity was only 148,000 tonnes per annum. The policy has encouraged
establishment of new units and expansion of installed capacities by the manufacturers. The total
installed capacity in the country now exceeds 3.2 million tonnes. This capacity will be further
increased by one million tonnes by the end of this year when the current expansion by ECPL and
FFC-Jordan starts commercial production.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
However, some of the analysts believe that the advantage of supply of gas at concessional rates
to fertilizer manufacturers is not being passed on to the farmers. In their views, at present the
international prices of urea are lower than its domestic price. And therefore, they suggest that
efforts should be made by the manufacturers to lower urea price. The manufacturers do not agree
with this. They say that they have been importing expensive urea in the past and selling at lower
prices – virtually subsidising urea sale — a responsibility of the government. Therefore, if the
price of urea has declined in the international market, they should not be asked to lower the
domestic price. In their views, it is a temporary phase as there is an over supply situation in the
global markets. At this time the GOP must protect the local industry.
Incentives Offered To Fertilizer IndustryThe Government has provided following incentives under Fertilizer Policy, 2001, to encourage
fertilizer production in the country:
To fulfill local demand of fertilizers at affordable prices, the Government is providing
subsidy on production and import of fertilizers.
Investors will be allowed to relocate second hand plant, equipment and machinery, with
the same concession/exemption as applicable to new plants.
The Government is providing concessionary feed stock gas to the fertilizer plants for
production of urea.
Import by manufacturers of Rock Phosphate and Phosphorous of fertilizer free of
customs duty.
Tax relaxation has also been offered by the Government.
Export benefit to suppliers of capital goods for new/modernization projects of fertilizer.
Gas price has been fixed for 10 years for new investments.
Gas for balancing, modernization, replacement expansion for existing plants has been
filed for 7 years.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
PRODUCT WISE, DOMESTIC PRODUCTIONProduct Wise, Domestic Production Of Fertilizer (000 Tons)
Company Wise Product 1997-98 1998-
99
1999-
2000
2000-012001-
02
2002-03
Urea
Dawood Hercules 385 412 436 376 398 425
Engro 663 772 818 781 872 888
NFC Pak-Saudi 618 625 603 605 517 613
NFC Pak-China 27 97 73 0 0 0
NFC Pak-Arab 92 97 102 110 99 102
NFC Pak-American 0 125 200 234 301 290
FFC 1,499 1423 1736 1,877 2,073 2,703
Sub Total 3,284 3,551 3,968 3,983 4,260 4,407
DAP
Sona FFC 0 46 298 325 67 0
CAN
NFC PAK-ARAB 315 339 386 374 329 335
AS
NFC PAK-American 0.5 0 0 0 0 0
NP
NFC PAK-ARAB 293 284 261 285 306 305
SSP
NFC LC&FL J.Wala 0 4 73 78 78 75
NFC Hazara Fert. 0 17 73 81 84 72
Sub Total 0 21 146 160 162 147
N:P:K 1 1 1 2 63 75
TOTAL 3,894 4,242 5,060 5,128 5,187 5,269
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Import of FertilizersImport of Fertilizers
000 Tons
Product 1999-00 2000-01 2001-02 2002-03
Urea 114 86 0 0
AS 21 15 32 17
DAP 819 773 919 1,124
NP 122 47 26 30
TSP 15 0 0 9
SSP 22 0 0 0
SOP 11 0 20 16
10:15:20 5 15 5 0
MOP 12 22 11 0
Total 1,141 958 1,013 1,223
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
MAJOR FERTILIZER PRODUCERS IN PAKISTAN
Engro Chemical Pakistan LimitedEngro Chemical Pakistan Limited, formally known as Exxon Chemical Pakistan, was
established in 1967 with an installed capacity to produce 147,000 tons of urea annually. The
Company has already expanded the urea production capacity to 750,000 tons per annum. After
the completion of current expansion programme, the annual production capacity will be
enhanced to 850,000 tons per annum besides improving plant energy efficiency and
strengthening the environment conservation measures. The delay in manufacture and shipment of
some critical equipment by an overseas supplier has delayed completion of project from March
2004 to last quarter of the year. The project cost due to the change in scope and delayed
commissioning has increased from US$ 59 million to US$ 72 million. However, according to the
Company sources, the project economics remain unchanged due to enhancement in gas
utilization efficiency.
Engro Chemical Pakistan Limited is the second largest producer of Urea fertilizer in
Pakistan. The company was incorporated in1965 and was formerly Exxon Chemical
Pakistan Limited until 1991, when Exxon decided to divest their fertilizer business o a global basis
and sold off its equity of 75% shares in our company.
The Employees of Engro, in partnership with leading international and local financial institutions
bought out Exxon’s equity and the company was renamed as Engro Chemical Pakistan Limited.
Engro is a public limited company listed on the Stock Exchanges of Karachi, Lahore and
Islamabad.
Location of Head Office: Clifton Karachi
Regional Offices: Hyderabad
Quetta
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Nawabshah
RahimYarKhan
DG.Khan
Multan
Lahore
Gurjanwala
D I Khan
Products Offered Engro urea
Engro Zorawar
EngroPhosphate
EngroNP
Zingro
Engro DAP
Engro Zarkhez
Factories: Dharki, Sindh.
Bin Qasim, Karachi
ENGRO ASAHI POLYMER & CHEMICAL LIMITED (EAPCL)Engro Asahi Polymer & Chemical Limited (EAPCL) is a joint venture of ECPL with Asahi
Glass and Mitsubishi Corporation of Japan for the production of PVC resin. The project is also
being built at Port Qasim. It will have a capacity to produce 100,000 tonnes of resin annually.
The project cost is estimated around Rs. 4 billion.
DAWOOD HERCULES CHEMICALS LIMITEDDawood Hercules Chemicals Limited was incorporated as a public limited company on 17th
April 1968, as a joint venture between Dawood Group of Industries and Hercules Inc. USA. It
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
was the first private sector venture in Pakistan to receive a loan from the World Bank and was
the largest ammonia/urea plant in country at that time.
Initially the plant's capacity was 345,000 metric tons of urea per annum. The plant was
revamped in 1989 / 1991 to enhance the capacity to 445,500 metric tons of urea per annum.
Also, it made the manufacturing facilities more energy efficient and environment friendly.
ISO-9000:2000 certification. Dawood Hercules also won numerous safety and excellence
awards.
Dawood Hercules Chemicals Limited has not been able to enhance its production capacity
lately. The Company operates on a gas network which is primarily domestic consumer oriented.
Any increase in demand for gas or reduced gas availability, due to the fault in the system,
immediately results in diversion of supply to domestic consumers particularly in winter months.
fertilizer plants in some other areas were able to achieve at least 10 to 12 per cent production
above the designed capacityindicating capacity utilisation at 85 per cent as against a capacity
utilisation of 76 per cent during the corresponding period in 2004. It is believed that the average
capacity utilisation for the year will improve to 90 per cent provided there is no load-shedding of
gas. However, to achieve capacity utilisation above designed capacity the Company needs supply
of gas at optimum level. This will not be possible without improving the pipeline network. By
the end of year 2005, approximately one million tonnes of additional urea manufacturing
capacity is expected to come on stream in the country. This would not only improve the
availability of the product but would also result into greater competition. With the present
downward trend in the international price of urea, the ability to recover escalation in cost through
higher prices will be limited. To remain successful in the tough competition it will be necessary
for the manufacturers to focus on cost control and improved productivity.
The policies of the government assign the highest priority to allocation of gas for the fertilizer
industry to boost agriculture production in the country. It is necessary that the government abides
by the policy and meets industry demand for allocation of additional gas at reasonable price. To
ensure availability of urea at competitive prices the government must avoid any escalation in the
gas (feedstock) prices in the near future as the government intends to enhance production of food
and cash crops in the country. Besides, the industry has become a potential foreign exchange
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
earner. Efforts should be made to enable the industry to earn foreign exchange after freeing the
country from its import liability.
Head Office Location:Empress Road, Lahore
Factory Loaction:
Chichoki Mallia, Shkhupura
Product Offered: Bubber Sher: The Company's principal activity is to produce urea fertilizer. The company markets
it s urea under the brand name Bubber Sher.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
COMPETITORS ACTIVITIES
ECPLThe new urea plant with 1.3 million metric tons per annum capacity is likely to start
operations in August 2010. After the commissioning of their new urea plant their total urea
production capacity will be over 2.2 million metric tons. The company previously concentrated
its operations in the economic proximity of their plant, however now they have expanded their
operational area to the entire Pakistan. They have introduced a fourth non-management tier in
their setup with an idea to amplify the market penetration and cost effectiveness, it will also help
them to concentrate more.
ECPL's Annual Marketing Conference was held in Singapore from 16th to 19th June
2009.
M/s ECPL planned a change in the structural hierarchy of the marketing department
effective from January 01, 2010.
M/s ECPL remained focused on the expansion of their dealer network in the wake of
additional urea production from new plant.
The company ran a sales campaign, which had numerous incentives like quantity
discounts and foreign trips for the top performing dealers. During 2009, the company
held "Engro Champion dealer's conference" in Malaysia from 12th to 15th March 2009 in
which their top performing dealers participated.
The removal of Boron from the product line was one significant decision of Engro during
2009. The entire available Boron inventory was given to the main dealers free of cost.
The company vigorously ran the technical campaign in the Center Zone to strengthen the
brand & corporate image.
In order to boost the sale of DAP & Zerkhaiz the company decided to waive off the
credit charges on sales against Bank Guarantees.
The company also introduced the SMS facility regarding urea shipments from plants to
the dealers.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
DHCL North Zone remained the target of all the activities and their activities in the Central and
South zones of FFC were minimal to the point of nonexistent.
The company imported 97 kt DAP during the year.
The company reduced the DAP dealer transfer prices to as low as 1750 ex - Karachi.
NFML Their last plant Hazara Phosphate fertilizers (HPL) was privatized in December 2008 and
M/s Azgard 9 took over the operational control of the plant.
The company remained the sole distributor of the TCP's imported urea.
The company, in order to handle the huge quantity of imported urea imported by GOP
through TCP, improved its warehousing set-up by hiring warehouses at several new
locations.
The favorable market scenario enabled the company to easily sell the products in the first
half of the year but in the later half company had to carry large inventory.
During the fourth quarter of the year, the company under the pressure of heavy imports,
made a significant strategic shift in its policies when they started offering unauthorized
credit to the dealers for urea sales.
During the peak seasons, NFML indulged in various unethical practices and gave huge
quantity of urea under the political pressure, urea sales through haulage contractors etc.
A huge quantity of imported urea was also dumped en-route with the connivance of
NFML.
Al-Hamd Chemicals After acquiring the SSP plant from NFC, Al-Hamd Chemicals throughout the year
supplied SSP to the market.
Pak Arab Fertilizers Their new plant is expected to commence production in March 2010 according to the
official announcement by the company.
The company remained haphazard regarding its dealer network.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
During the year, on one hand, they were trying to enhance their dealer network and at the
same time, on the other hand they were selling large portions of production through
hidden deals to selective large dealers bypassing the dealer network.
Pak Arab tied up the sale of slow moving products with urea.
The company remained aggressive throughout the year and offered foreign trips and
quantity discounts during their sales campaigns to market their IMP, CAN and DAP
products.
Mr. Muhammad Zahir, Ex-vice president ICI Pakistan, joined the company as
Director Marketing.
Azgard The company after the acquisition of SSP plant from NFML launched its own SSP.
Initially it was sold under the brand name of "Kissan Plus" but later the company branded
it as "Tara SSP". The company presently is marketing two SSP grades with 14% P2O5
and 18% P205.
Azgard arranged trips for 70 dealers to China and Hong Kong on achieving the
phosphatic sales targets of 300 and 600 mt respectively.
The company offered Deferred Marketing Allowances (DMA) to dealers in various slabs
on DAP sales during the period May-June 2009.
Azgard utilized rail as the transport to ship its products in NWFP.
Jaffer Brothers Limited The company continued aggressive marketing of imported DAP, TSP and MAP
throughout the year.
They offered various quantity discounts and Deferred Marketing Allowances to dealers
throughout the year to promote & sell their products.
The company followed the prices of private importers to sell DAP, they were however
much lower in prices from the urea manufactures.
Private DAP Importers Private importers remained very active throughout the year.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Part TWOCompany Management System
The reduction in DAP prices in the international market gave them a new lease of life and
they were back in business in 2009. During the year, they imported consistently and
heavily and made windfall profits.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Part II
COMPANY MANAGEMENT SYSTEMOrganizational chart
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Structure of Marketing Division Lahore
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Now most of the responsibilities of IT Department are shifted to SAP
Company Information
Management
Chief Executive and Managing Director
Lt. Gen. Malik Arif Hayat HI (M), (Retired)
Chief Financial Officer
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Board of Directors Lt Gen Hamid Rab Nawaz, HI(M)
(Retired)
Chairman
Lt Gen Malik Arif Hayat, HI (M) (Retired)
Chief Executive and Managing Director
Mr. Jorgen Madsen
Mr. Qaiser Javed
Mr Tariq Iqbal Khan
Dr Nadeem Inayat
Mr. Istaqbal Mehdi
Maj Gen Muhammad Tahir, HI(M) (Retired)
Brig Arif Rasul Qureshi, SI(M) (Retired)
Brig Rahat Khan, SI(M) (Retired)
Mr Shahid Aziz Siddiqi
Mr Shahid Anwar Khan
Mr Khizar Hayat Khan
Plantsites
Goth Machhi, Sadikabad
(Distt: Rahim Yar Khan)
Tel: No. 92-68-5786420-9
Fax: No. 92-68-5786401
Mirpur Mathelo
(Distt: Ghotki)
Tel: No. 92-723-651021-24
Fax: No. 92-723-651102
Marketing Group
Lahore Trade Centre,
11 Shahrah-e-Aiwan-e-Tijarat, Lahore
Tel: No. 92-42-36369137-40
Fax: No. 92-42-36366324
Karachi Office
B-35, KDA Scheme No. 1, Karachi
Tel: No. 92-21-34390115-16
Registered Office
93-Harley Street, Rawalpindi CanttTel: No. 92-51-9272307-14Fax: No. 92-51-9272316E-mail: [email protected]
Syed Shahid HussainCompany Secretary
Brig Khalid Kibriya (Retired)Tel: No. 92-51-9272327Fax: No. 92-51-9272519
Group General Manager Marketing
Mr. Asad Sultan Chaudhry
Group General Manager Technology & Engineering
Syed Iqtidar Saeed
Group General Manager Finance/CFO
Syed Shahid Hussain
Group General Manager Manufacturing & Operations
Mr. Tahir Javed
General Manager Manufacturing & Operations (Mirpur Mathelo)
Mr. Naeem-ur-Rehman
Senior Manager Corporate Affairs/Company Secretary
Brig. Khalid Kibriya (Retired)
DIRECTORS NOMINATED BY
Mr. Jorgen Madsen Fauji Foundation
Mr. Qaiser Javed Fauji Foundation
Mr. Tariq Iqbal Khan National Investment Trust (NIT)
Dr. Nadeem Inayat Fauji Foundation
Mr. Istaqbal Mehdi Pak Kuwait Investment Company
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Maj. Gen Muhammad Tahir (Retired) Fauji Foundation
Brig. Arif Rasul Qureshi (Retired) Fauji Foundation
Brig. Rahat Khan (Retired) Fauji Foundation
Mr. Shahid Aziz Siddiqui State Life Insurance
Mr. Shahid Anwar Khan National Bank of Pakistan
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Policy Formulation Process-MeetingsAt FFC, polices are devised at the peak level. Board of Directors and Executive Committee
devise strategies keeping in view the vision, mission and the objectives of the company. These
strategies are executed according to the instructions of top level of hierarchy.
Top management and middle management are given powers to carry out the operations for the
achievement of long-term objectives. They encourage the views and suggestions of employees as
well. It helps in the effective implementation of the formulated strategies.
Meetings of the Board (At Corporate Head Office)The chairman presides over meetings of the board and encourages the participation and
contribution of executive and non executive directors. The directors meet at least once in each
quarter. Additional meetings are called upon when required. In 2004 a total of seven meetings
were held which were also attended by chief Financial Officer and the Comp[any Secretary. The
chief Financial Officer and the Comp[any Secretary are the employees of the company and are
not entitled to cast votes at the meetings. Written notices of the meetings along with agenda and
its details were circulated seven days in advance. Minutes of each meeting are recorded and
circulated by the company within 30 days.
In these meetings the issues generally discussed are:
Approval of quarterly financial statements
Approval of half yearly financial statements
Approval of annual financial statements
Annual business plans
Annual budgets
Quarterly forecasts and annual forecasts
Cash flow projections
Performance monitoring
Internal audits reports
External audit recommendations
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Agreements and contracts
Amendment of laws
Agreement with staff unions’ Collective Bargaining Agents (CBA)
Status of payments of debts and obligations and repayments of loans
The board, after each meeting, gives the recommendations to strengthen and formalize the
corporate decision making process.
Meetings (At Marketing Head Office)
All the heads of departments meet every Tuesday to
To present the weekly reports to GMM
To discuss the sales situation
To look at the competitors’ activities
To monitor the performance against monthly and annual plans
To monitor fertilizer supply and demand situation.
Tries to devise strategies to overcome problems if any.
In every month a monthly meeting is held in which reports for the month of all departments
are presented to GMM.
In monthly meetings the targets and plans for next month are also set.
In these meetings monthly sales of FFC against the same period of last year and monthly
sales of competitors’ are also analyzed.
Sales of all regions are reviewed.
Sales performance of all sales officers are compared with targets
Best sales officer of the month is selected and rewarded.
Expenses for the month are approved.
These meetings are presided over by GMM.
All these meetings are held at Lahore marketing office.
Annual meeting of all the managers of Marketing Division is also held
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
MANAGERIAL PRACTICES,
Functions and Powers of Board of Directors:The role and responsibilities of the chairman and the chief executive officer are distinct, clearly
defined and documented and are carried out separately by the two officers. The board exercise its
powers to carry out its duties with a sense of object judgment and independence in the best
interests and the company has circulated a” statement of ethics and business practices” to
establish a standard of conduct, as a model corporate citizen , for the board and employees of the
company. Each year, the director attend the orientation coerces of their duties and responsibility
to manage the affairs of the company on behalf of the shareholders; these courses are also
attended by the management of the company.
The board has also adopted vision and mission statements and an overall corporate strategy for
the company and formulated policies including risk management, procurement of the goods and
services marketing ,terms of credit and discount, acquisition and disposal of of fixed assets and
write-off inventories, bad debts, loans and advances, investments and disinvestments of funds
with maturity period exceeding six months, borrowing, donations, charities, delegations of
financial powers, transitions with related parties, loans and advances, human resource
management including succession planning , healthy ,safety and environment . decisions on
material transitions or significant matters are documented through resolution passed at their
meetings and circulated for approval.
The board monitors the operations of the management through three standard
committees. Implementations of the decisions, policies and strategies along with maintenance of
their record have been delegated to the management under the supervision of the Chief Executive
and Managing Director of the company and is executed and controlled through management
committees.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
MANAGERIAL POLICIES
Audit Practices A number of excellent manuals are available for the professional auditor or the member of a
director’s examining committee who wishes to familiarize himself with specific audit techniques.
In FFC most direct form of auditing is simple rechecking have a second person redo what
someone else has already done. In addition to this, some direct spot- checking has an important
place in the audit program even where controls are well developed.
Policies for Attracting Deposits Although management and directors of FFC do have absolute control over the level of their
deposits, they can never the less influence the amount the FFC hold. Because deposits are so
important to the profitable operation of FFC, the FFC tends to compete aggressively for them.
Among the factors determining the level of deposits in a FFC are some that the FFC usually
cannot affect significantly, some of the leading are monetary and fiscal policy and the level of
general economic activity.
Policy Statement of Ethics & Business Practices
It is the policy of FFC to follow the highest business ethics and standards of conduct. It is the
obligation of every one of us to act responsibly; that is, to be honest, trustworthy, conscientious,
and dedicated to the highest standards of ethical business practices.
The Company’s reputation and its actions as a legal entity depend on the conduct of its Directors
and employees. Each one of us must Endeavour to act according to the highest ethical standards
and to be aware of and abide by applicable laws. We must all ensure that our personal conduct is
above reproach and complies with the highest standards of conduct and business ethics and have
the obligation to ensure that the conduct of those who work around us complies with these
Standards. The Company’s Code of Business Ethics and Standards of Conduct will be enforced
at all levels fairly and without prejudice. This code to which the Company is committed in
maintaining the highest standards of conduct and thical behavior is obligatory, both morally as
well as legally and is equally applicable to all the Directors and employees of the Company who
have all been provided with a personal copy.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Human resource practices:
Following are the practices conducted in the FFC.
Recruitment
Hiring
Training
Performance Management
Employee Development
Pay structure
Compensation & Benefits
Recruitment
External Recruiting: In the external recruiting, FFC advertises through its website
www.ffc.com.pk & also through the newspaper. They also attract the job applicants through the
reference of existing employees.
Internal recruiting: They also make internal recruitment by hiring an existing employee to
another job according to the need.
Hiring:
The hiring procedure they have conducted is the following.
Take the written tests :In written test the general knowledge, knowledge about related field and
the English level of the applicant is checked.
\
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
From 2010 Onwards GAT (General) test by NTS will replace the old test conducted by FFC itself.
Conduct the interview
Interview is compulsory in every hiring, while taking the interview the HR manager and the
specific department manager must be present.
To engineers, two interviews are conducted.
o Preliminary interview
o Final interview
Preliminary interview is conducted by the specialist person, who are special skills and
knowledge about the related field and they check the knowledge of the applicant.
Final interview is conducted by the top level management who takes the decision either the
applicant should be selected or not on the recommendations of the specialist
Training:In the training, FFC has gone for the two ways.
Internal Training: The management has gathered its pool of the experienced people who
trained the employees in their skills, behaviors & attitudes.
External Training: They hired the international consultancy firm who gives training to the
employees and assists in the different areas of job. The training period is of the two months.
Experienced personnel come from Denmark, china and gave training. On the job training and off
the job training is given to the employees. For example employees are sending to foreign country
for higher studies on scholarship.
Job assessment
Performance Management:
They made evaluation of their employees after six months. Feedback is taken from employees
and their performance is judged.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Performance Appraisal System (PAS)
Several factors are considered to judge the performance and each having different weighted
value for the tiers, Top, Middle and Lower.
TOP: Department Managers and above
MIDDLE: Sr. Officers, Section Heads and Unit Managers
LOWER: Officer-I and below
General Hierarchy Structure in all most of the departments at Marketing Division
Factors to be considered judge the performance of the employees Job knowledge and skills
Quality of work
Organizational skills / time management
Leadership and supervisor skills
Decision making / judgment
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Senior Manager
Deputy Manager
Supervisor
Supporting Staff
Junior Executive
Supervisor
Quantity of work
Interpersonal skills / Team work
Training and Development
Safety / Security
Personal
Job knowledge and skills
Deals the following abilities
Job Knowledge (level of knowledge possessed by the employee)
Analytical Ability (capability to consider pros and cons methodically/systematically)
Innovation (ability to generate new ideas)
Effective Employment of Job Knowledge to Produce Results
Optimum Utilization of Resources (best possible use of resources)
Quality of works
Deals the following abilities
Accuracy / Precision (ability to produce work with no/minimum errors)
Dependability (level of reliability/trustworthiness)
Follow Up Action (degree of involvement till completion of work)
Consistency (ability to maintain quality of work)
Neatness (orderly, smartly and skillfully handling of work)
Organizational skills / Time management
Deals the following abilities
Initiative (willingness to work without being told/prompted)
Knowledge and Adherence to Company policies
Effective Management of Resources (efficient/economical use of resources i.e. Lab our,
Time, Materials etc)
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Planning and Allocation of Priorities (conceiving and working out proper sequence of
action)
Meeting Deadlines with Accuracy (timely completion of work without errors)
Leadership and Supervisor skills
Deals the following abilities
Apportionment of Responsibility and Authority (assigning of jobs with required
authority)
Setting of Goals (self and subordinates)
Delegation (empowering subordinates for given assignments)
Planning and Control (formulating and directing activities)
Ability to Motivate (capacity to inspire and encourage others)
Decision making & Judgment
Deals the following abilities:
Objective Assessment of Issues / Problems (Impartial analysis of problems)
Proactive Thinking for Solutions (anticipating problems and their solutions)
Evaluation of Facts for making sound Decisions / Recommendations
Timely Decisions
Awareness of own Capabilities (Strengths and Weaknesses)
Quantity of work
Deals the following abilities
Volume of Work (capacity to handle/produce work)
Target on Time (completion of task in given time)
Priority (assigning weight age to task in order of their importance)
Ability to work Under Pressure
Sustained Work (consistent / steady output)
Interpersonal skills / Team work
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Deals the following abilities
Relationship with Colleagues
Relationship with Subordinates
Relationship with Superiors
Outside Relationships (development and maintenance of corporate relationship outside
the company)
Ability to Create Synergy amongst Team Members (act as unifying force)
Training and development
Deals the following abilities
Self Development (keenness for improvement)
Coaching Capabilities (ability to guide and train)
Acceptance of Challenges (readiness to learn/teach new technology and methods)
Setting Standards for self and Others (benchmarking training and development needs
Desire to Learn Latest Technology / Management Tools (urge and search for knowledge
Safety & Security
Deals the following abilities
Knowledge of Safety / Security Methods & Techniques
Application of Safety / Security Procedures
Security & Confidentiality of Information
Security of Company Material / Property
Health Consciousness (knowledge and implementation of basic health needs)
PersonalDeals the following abilities
Oral Communication
Written Communication
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Emotional Intelligence (ability to understand and positively influence own and other’s
emotions)
Honesty
Attitude (flexibility / adaptability)
Employees Development: The channel has strongly focused on the employee development.
Cover the laps among the employees by using frequently the mentor in the organization.
Make promotions regarding to their performance
Job rotation is also done if the managers see any need of it. But they also watch the
interest of the employee.
Pay Structure:FFC has lead the market pay strategies that is they have pay the more than the 5-10% which
has developed the external motivation in the employees.
Annual Bonus
Free education
Free pick & drop to their employees
Free medication
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Major managerial policies, practices/stylesFFC has the strong management system to run the business. Today FFC is one of the most
successful companies and its all due to its superb managerial policies. There are many planned
policies which are adopted by the company.
Marketing and Sales PoliciesMarketing and sales departments serve as backbone in the company. FFC has fully planned and
organized marketing and sale policies. Meetings are held where decisions are taken for the
efficient functioning of the company’s marketing and sales areas because the company depends a
lot on its marketing and sale policies. Marketing budget is carefully determined and sales people
incentives and salaries are reviewed from time to time. There are certain other essential things
about the sales strategies. Products are sold throughout Pakistan with no change in prices
anywhere. In case of consumer products the freight are born by the company. The customers are
offered no discount and also products are sold on cash basis. In case of industrial products freight
are the responsibilities of the customer.
Human Resource PolicyFFC has strong human resource policy. The management believes that their employees are major
assets of the company. Just because of this policy the company continues to benefit from the
efforts of its valuable people, who are actually, the strength of FFC through training and
development activities the human resource policies aim at the improved working conditions all
over the organization. The various personnel strategies can be that the employees are chosen
solely on the basis of merit and they are given monetary rewards and incentives with a view to
increasing the commitment and motivation of the employees. Although the salaries are not really
competitive if you look at the market scenario yet the employees are quite satisfied as they are
working in an excellent environment and enjoying as an employee of a market leader.
Financial PoliciesFFC has the well established rules for their financial transactions. One of the most important
strategies in this regard is of investment. Before making investment future is seen rather than the
present i.e. investment is made only in the projects, which will increase the sales in the future.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Customer Relationship PoliciesFFC adopts the strong customer relationship policy. They think customer as the king. They are
following 20 – 80 strategy in dealing with the customers.
Internal Department PoliciesThey maintain a strong relationship between the departments. All departments are interrelated. It
is one of the main aspects of strategic management that all the various functions performed in the
company by the different departments must have interrelation and collaboration if company
wants to achieve success. Thus synergy is given a lot of importance.
FFC has many other policies to run their business. These all contribute to the success to the
success of the FFC.
POLICIES REGARDING EMPLOYEES AND DESIGNATIONNumber of Employees:
There are approximately 3,162 permanent and temporary employees working in Fauji Fertilizer
Company Limited. Finance department of the company comprises of approximately 200
professionals. The Company divides its employees into three broad categories namely
Management Employees, Staff Employees, and Casual Employees.
Facilities to Employees
Medical policy
Travelling policy
Medical Policy
Eligibility
Employees and their families as per term "Dependents".
Medical Coverage
Personnel at Rawalpindi, Plant sites, Lahore = consult FFC Doctor.
Personnel at Karachi = Dr nominated by RM Karachi.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Specialist Consultation
For personnel living in Township, SDK and RYK referral from FFC clinic is mandatory except
the child specialist on panel. For other stations referral from Company nominated
doctor/registered medical practitioner. Travel expenses according to entitlement with/ without
attendant as per doctor recommendation will be paid by Company.
Hospitalization
100 % reimbursement in case of the Company panel hospital for General Ward. For private
room 60 % reimbursement of room charges (for staff employees).
Dental Treatment
Toothache, Gum Diseases, Deteriorated Teeth extraction, Filling of Cavities, Root Canal
treatment and Crowning.
Overseas Treatment
On recommendations of Board of Armed Forces Institute of Cardiology (AFIC) (for cardiac
diseases). Oncologist CMH, Rawalpindi (for Cancer). Reimbursement up to 500000/- only.
Management approval is must before movement.
Daily Allowance
Cat I Rs. 500.00 Per day
Cat II Rs. 440.00 Per day
Cat III Rs. 315.00 Per day
NOTE
For a full calendar day exceeding 12 hours = One DA
For the part of a calendar day exceeding 6 hours = half DA
For less than 6 hours = No DA
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Technical staff when detailed for duty in emergency shutdown or turnaround from GM to
MM or Vice Versa will be entitled one additional DA.
Out of Pocket Allowance:
1 /4th of DA per day.
Relocation
Self family rail fare in entitled class.
04 x additional DAs for married staff employees.
02 x additional DAs for single staff employees.
Relocation Allowance
Category Married Single
I Rs.1000.00 Rs. 500.00
II Rs.800.00 Rs.400.00
III Rs.500.00 Rs. 300.00
Transportation of Personal Effects
By Good Train
Category Married Single
I 1500 KG 750 KG
II 1200 KG 600 KG
III 1000 KG 500 KG
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
On retirement the employees can avail the above facility or one truck from place of posting to
home station.
Hotel Stay
Management employees are entitled to stay in Hotel as per entitlement:
Expenses: Hotel expenses. (Room Rent, meals Taxes for one person) Guest is not
allowed.
Bills: Bills are required to be produced.
Daily allowance: No DA in case of Hotel Stay.
Relocation/ Transfer
4 X additional DA (Married), 2 X DA (unmarried). On relocation if family is traveling with
officer in same car cost of one ACC Fare for self and Half ACC Fare for each member
Relocation Allowance
CAT Married Unmarried
1& II 10000/- 5000/-
III & IV 5000/- 3000/-
V 3000/- 2000/-
Transportation of Goods
By goods train
CatMarried Unmarried
1& II 6000 KG 3500 KG
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
III & IV 5500 KG 3000 KG
V 4500 KG 2500 KG
Annual Leave
Less 5 years of Service : 18 Days
Completed 5 years 24 Days
Completed 6 years 25 Days
Completed 7 years 26 Days
Completed 8 years 27 Days
Completed 9 years 28 Days
Completed 10 years 30 Days
Casual Leave
10 working days per year.
Max 3 days at a time.
Cannot be prefixed /suffixed to any other leave.
Sick Leave:
10 working days per year.
Certificate from Doctor is must in case of leave exceeding two days.
Accumulation upto 30 working days.
SANCTION:
Unauthorized absence will cause break in service.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Total period of absence even an account of all leaves exceeding 90 days will cause break
in service as per Factories Act.
Leave over and above entitlement will be treated as Special Leave without Pay.
Casual / Sick Annual leave will be sanctioned by Unit Managers/Section Heads.
Hotel Entitlement-Officers:
CAT 1 & II: All Hotels of their choice.
Cities Category-III Category IV / V
Peshawar Pearl Continental Ambassador
Deans
Rawalpindi/Islamabad PC Deans Faraz International
Holiday Inn Shalimar
Flashmans Flashmans
Shalimar Holiday
Silver Grill
Kashmir Valley
Lahore PC Flettis
Avari Shalimar
Holiday Inn Ambassador
Ravi Lodge
Day Inn Hotel
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Multan Holiday Inn Sindbad
Holiday Inn
Hyderabad Any Hotel Fraz
New Indus
Sain Jees
Karachi Shareton Beach Luxury
PC Midway
Marriott Metropole
Avari Mehran
Holiday Inn Best Western
Crown Plaza Plaza
Sky Tower
Gulf
Exceissior
Chietan
Sarwan
Faisalabad Serena Eastman Inn
Dec-Continental
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Quetta Serena Loards
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
GROWTH OPPORTUNITIES/ CAREER LADDERFFC provides growth opportunities to its employees and officers, as it deals with many leading
institutions.
PROMOTIONFFC decisions about promotions are decided upon the basis of merit in one’s present position
and ability and potential to assume the impossibilities of higher level positions.
Sometimes other factors are considered such as length of service, education, training courses
completed, previous work history and the like.
Job Satisfaction:I asked this question (regarding job satisfaction) to majority of supervisions with whom I got the
chance to work. Some of the qualitative findings are:
Most of the employees are highly satisfied with their job
Highly satisfied with monetary rewards
Highly satisfied with relation to fellow employees
Highly satisfied with subordinate junior relation
Moderately satisfied with relation promotion mechanism
Moderately satisfied with subordinate junior relation (In case of seniors from army
background)
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Part THREE
Administrative Styles
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Part 3
MANAGING THE ORGANIZATIONThe management of the FFC focuses on some of the objectives that it wants to achieve. The way
managers treat and deal with their subordinates in order to accomplish the multiple objectives of
the organization is determined primarily by management system of beliefs about the nature of
man and about the determinants of cooperation in an organized endeavor.
MANAGERIAL STYLESManagement is process of utilizing material and human resources to accomplish designated
objectives. It involves the organization, direction, coordination and evaluation of people to
achieve these goals. The role of manager is to assemble the best work team he can obtain and
then to provide a supportive motivational environment to guide that team to accomplish agreed
upon objectives. The essence of management is the activity of working with people to
accomplish results. It involves organizing, motivating, leading, training communicating with and
coordinating others.
Organizational Culture:The culture of the organization is very much differentiated with their competitor. The culture of
the organization is too much dynamic that is encouraged to the individual to do hardworking &
show the achievement. Following are the practices that make the culture of the organization
dynamic.
Centralization/ Decentralization:
The culture of the organization is centralized and also decentralized that everyone has followed
the orders of the Top management and decentralized in the sense that some decision are taken
into consideration and solved by the specific department head.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Consultative & autocraticManagement style cannot be said purely autocratic or monarchy but it also includes consultation
from the employees. Although decision is even then is made at highest level after taking into
consideration the conditions and suggestion from the employees.
Examples of Centralized policies
Perk policy
Recruitment policy
Decision making policy
Salaries policy
Examples of decentralized policies
Temporary workers related policies
Daily wages employees related policies
Employees Relationship
The culture has focused on the good relations among the employees. each and every person is
working in the friendly environment and co-operate with each other.
Now a day world became a global village and every field is directly affected by the incident done
all over the world. Fauji Fertilizer Company Limited also affected by the political and social
conditions of world just like increase in oil prices. With this new technology, innovation, ways of
communication and new management styles affect the FFC in positive manners.
Decision Making In FFC decision making done by the team work. Leaders consult with individual or group
subordinates, obtaining their ideas and opinion, and then make the decision. While doing
decision making FFC identifying and diagnosing the problems or facts or both, generalizing the
alternatives, choosing best alternative and after implication evaluation the results.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Identify and diagnosing problem
Generating alternative solutions
EvaluatingAlternative
Choosing best
alternative
Implication Decision
Evaluating results
FFC decision is making some times very lightly affected by organizational politics, emotions and
personal preferences but FFC management quickly overcome on it due to good controlling.
PlanningIn FFC planning through by a proper channel and it take a long time. When they plan something,
they started their planning from the beginning of year and almost taking one year on research and
other precaution and facts relating to their planning they implied what they planned.
In their planning there is a proper channel/ sequence which we mentioned above.
First of all they analysis the situation and see with the alternative goals and plan and measure the
opportunity cost. After that they select the best way and last step of their planning is implication
with monitoring and controlling.
While doing planning and implication of planning they also see and measure internal and
external threats, weakness, strengths, resources etc.
The most interesting thing in FFC’s planning that there is vertical planning but from Bottom to
Top because their bottom staff directly relating to their customers (farmers) so they started
planning at gross root level.
ControllingControlling is a very much important aspect of big business. Controlling consists of verifying
whether everything occurs in conformities with the plans adopted, instructions issued and
principles established. Controlling ensures that there is effective and efficient utilization of
organizational resources so as to achieve the planned goals. Controlling measures the deviation
of actual performance from the standard performance, discovers the causes of such deviations
and helps in taking corrective actions.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
FFC decision is making some times very lightly affected by organizational politics, emotions
and personal preferences but FFC management quickly overcome on it due to good
controlling.
CompareDetermine deviation
With inLimitsStandards
YesNoTaking corrective
Action
Continuous work progress
Set performance
stander
Measure performance
In FFC the formal control, feed forward control aims to prevent problem before they arise, feed
back control implies the performance measure by the data and analysis the results. With this they
have the also have audit management and budgetary control by the help of auditors, balance
sheet, income statement and financial ratios.
Innovation In fertilizer sector innovation is not so much important aspect. Because as old as fertilizer
product as increase in value and demand of product. Because Industry Market innovation are
slowly as compare to Consumer Market
In FFC for the purpose of innovating ideas Research and Development (R&D) Department is
working. They used the latest equipment and welcome to positive innovation by all over the
world.
CommunicationIn FFC downward and upward communication is used through hard and soft copy but they
converted their communication channel from hard copy to soft copy.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
There are following way of communication in FFC.
Use of telecommunication
Use of electronic media, e-mail, fax etc.
They heavily invested in the technology. They are using the latest technology especially
imported from the foreign country.
A good deal of verbal interchange takes place in FFC each day. It is a two way street. The
competent officers discuss, listen as well as interact rather than directs. The FFC makes the
communication channel more effective by staff meeting eventually it is an extension of the
conversational or discussion technique but embraces a larger segment of the organization. Such
meetings are regular features of efficiently operated FFC and take a wide variety of forms,
ranging from daily or weekly officers meetings to annual weekend conferences.
The major portion of communication necessary for the day to day operations of a FFC consists of
simple person to person conversation more complex ideas, however, gain clarity if they are put
in writing. Thus the FFC is talented in the ability to write clearly which is an invaluable
management talent that needs constant practice and development.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
IMPACT OF MANAGEMENT STYLES ON EMPLOYEES:
MORALE AND PRODUCTIVITYThe employees of the FFC possess high morale, and thus exhibit high productivity. The
employees are happy and are also productive workers. Job attitudes and morale are quite positive
for two reasons.
Firstly employees gain social satisfaction from interactions at the work place. Working
conditions and supervision good, secondly high morale result from high motivation to produce.
MotivationMotivation can be defined as a willingness to expend energy to achieve a goal or a reward.
The management styles adopted by the FFC affect greatly, and employees are motivated in order
to enhance their performance and achieve the derived goals.
FFC focused on the motivation of employees to do work and for this purpose
FFC give them different types of incentives, bonuses, pay incentives, per
motion, Medical facility, residential facility, fair well, annual dinners and
much more.
Job design for motivation is another personnel approach that has been increasingly emphasized
in recent years. Job contents, methods and relationships are structured not only to satisfy
technological and organizational requirements but also to accommodate human needs for
meaningful and self-fulfilling work. Jobs are being designed to fit the people who hold them in
the hope that greater employee motivation (which is essential to higher productivity) will result.
Sensitivity training and / or organizational development programs have been used to aid in the
broad development of Top executive talent and teamwork. Just like it FFC create a community
for employees.
The Company has built a model township for its employees at this remote location which
consists of residential accommodation along with allied facilities. In caring for the community in
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
health, education, environment & sports, Fauji Fertilizer Company Limited follows its key
objective:
"To use all skills, energies and technologies in building the image of the company, by strictly
adhering to the Company Core Values, that makes its employees to contribute towards society in
a way and enhance its image as a leading Fertilizer Business company in Pakistan."
For this FFC is providing excellent health, education, recreational and sports facilities to its
employees.
Health facilities include a modern clinic equipped with a laboratory in the vicinity of the
residential area. A panel of competent doctors is available round the clock to take care of the
community's health.
Two schools, FFC Grammar School & FFC Model School are operating in parallel in the FFC
Township, offering up to the Higher Secondary level. Imparting computer literacy to children is
one of the main elements of FFC schools, modern education. FFC operate two separate
Management and Staff clubs, offering sports and recreational as well as social activities. The
clubs are equipped with basic facilities like swimming pools, Tennis/Squash courts, Health gym
and much more. A lush green (09 holes) golf course is a panoramic element of FFC sports
facilities and it has promoted many good golfers in the community.
Many sports events like Annual Sports, Married Vs Bachelors and Sports Gala etc. are held from
time to time, imparting healthy entertainment to the residents. Social events like Musical
Evening, Mushaira, Eid-Milan, etc. are also part of the social activities of the club.
Morale and productivity The employees of the FFC possess high morale, and thus exhibit high productivity. The
employees are happy and are also productive workers. Job attitudes and morale are quite
positive for two reasons.
Firstly employees gain social satisfaction from interactions at the work place. Working
conditions and supervision good, secondly high morale result from high motivation to
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
produce. In other words we can say, that management should put its eggs in the basket that
creates a high-motivated work force.
Promotion FFC decisions about promotions are decided upon the basis of merit in one’s present
position and ability and potential to assume the impossibilities of higher level positions.
Sometimes other factors are considered such as length of service, education, training
courses completed, previous work history and the like.
CRITICAL ANALYSIS OF ORGANIZATIONAL CULTURE AND MANAGEMENT STYLES
Organization’s culture is a pattern of basic assumption invented, developed by a given
group as it learn to cope with its problem of external adoption and internal integration.
Values, principles, policies, and structure of the organization are the main miles stones
to analyze the company’s strength.
Principles/Values:
These are the principles and supporting behaviors, which flow from their Purpose and
Core Values. Employees of FFC have some exceptional qualities.
They show respect for all individuals.
The interests of the Company and the individual are inseparable
They are strategically focused in their work
Innovation is the cornerstone of their success
They are externally focused
They value personal mastery
They seek to be the best
Mutual interdependency is a way of life
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Part FOUR
Production Facilities
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Part 4
Plant Sites and Production Facilities
Production FacilitiesBASE UNIT-GOTH MACHHI (FFC-1)
Start-up: June 1982
Design Capacity
Ammonia: 330,000 Met/Year
Urea: 570,000 Met/Year
REVAMPED BASE UNIT
Capacity Enhanced: 1992
New Capacity
Ammonia: 403,000 Met/Year
Urea: 695,000 Met/Year
EXPANSION UNIT-GOTH MACHHI(FFC-2)
Start up : 1993
Design Capacity
Ammonia : 363,000 Met/Year
Urea : 635,000 Met/Year
---------------------------------------------------------------------------------
MIRPUR MATHELO UNIT (FFC-3)
(EX-PAKSAUDI FERTILIZER LTD.)
Start up: Oct 1980
Acquisition by FFC: 31 May, 2002
Merged with FFC: 1 July, 2002
Design Capacity
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Ammonia: 330,000 Met/Year
Urea: 574,000 Met/Year
Plant Description:Plant location : Goth Machhi Sadikabad Product: Sona Urea Fertilizer Plant-I Commencement of Commercial production: June 14. 1982. Project cost: Rupees 3300 MillionProduction capacity:Ammonia-1 : 1220 Tones per DayUrea-1: 2105 Tones per DayPlant-IICommencement of Commercial production: March 21,1993Project cost: Rupees 7215 Million Production capacity:Ammonia-II: 1100 Tones per Day Urea-II: 1925 Tones per Day
The year witnessed exceptional performance at every level. plant operating efficiencies surprised
all previous records with large margins. Cost effective and professional solutions are adopted to
address any major potential reliability threats.
Plants reliability improvements projects remained of prime importance and significant progress
has been achieved by addressing major unreliable areas and chronic problems. System
implementation through enforcement of FFC,s operational, maintenance, plant monitoring,
housekeeping and safety practices remained in the lime –light and deficiencies were overcome
utilizing the gap analysis approach.
The continued with selective investments necessary to sustain profitability, improve operations
and maintain its position at the leading fertilizer manufacturer in the country.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Plants Goth MachhiOperational performance of the plants 1&2 Goth Machhi was excellent during the year with a
total “SONA” urea production of 1458 thousand tonnes. Plant 1 created a new record of daily
urea production this year.
Annual maintenance turnarounds of both plants were carried out in the first quarter of 2009 and
were executed safely and successfully within the stipulated time.
Comprehensive inspection and major overhauls of equipment and machines were carried out in
house. Various modification jobs were also executed to improve operational efficiencies. With
ongoing efforts to improve plant reliability and performance, maintenance turnarounds are now
schedule on bi-annual basis.
The continuous decline in natural gas supply pressure from & General water shortage in the
country with frequent canal closures and declining water flow in the rivers in the past few years
has also put more strain on our water supply wells & challenge with a direct impact on
production.
Dedicated booster compressor have been planned to be commissioned in the first quarter of
2005 to boost gas supply pressure and further expansion of raw water resources and its
optimization is currently under way to meet water requirements. In our endeavour of self reliance
in areas of critical maintenance activities, refurbishment of old bimetallic stripped of plant 3 was
successfully completed in the fabrication shop which made this expensive equipment operational
again at plant 1. Detailed engineering of energy revamp project of plant 1 Ammonia unit is under
process and commissioning is expected in 2006. This implantation would result in an energy
saving of 0.3 Gcal/ Met ammonia. Utilization of the safe natural gas would also result in 18
thousand tonnes of additional urea production.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
evaluation of existing BFW heat exchanger E-211 was carried out for vibration and leakage
estimation. The exchanger has completed its useful life and order has been placed for a new
exchanger with modified design.
HIGHLIGHTS – 2009 and 2010
Goth Machhi
Highest ever yearly shipments of 1,653,683 mt were made from Goth Machhi.
Highest ever road shipments of 1,649,515 mt were made during the year with an increase
of 2.9% over last year.
Highest ever monthly shipments of 143,035 mt, 147,395 nit, 141,870 mt, 135,945mt
and 165,379 mt were made from Goth Machhi during the months
of March, May, August, September and December 2009 respectively
Plant Mirpur Mathelo
Taping the potential of our recently acquired plant Mirpur Mathelo has resulted in a noteworthy
efficiency of 125% of name plate capacity with annual production 716 thousand tonnes, 14% in
excess of last year output.
We are pleased to report that the company was able to achieve the required “SONA urea”
quality level for ”FFC urea” produced by the plant 3, which was formally declared
As “SONA urea” on March 2008. we are confident that benefits will continue to acquire to the
company by providing value added quality products to our customers.
To fulfil our commitment with the GOP for enhanced urea production, annual maintenance
turnaround of the plant was deferred to 2006 after careful technical review of efficiency
maintained during the period of meet the increase in demand.
To meet its commitment to the Govt. FFC has also planned de- bottlenecking of its plant three
for increasing nameplate production capacity to 725 thousand tonnes annually in a normal year..
The project is ready for commissioning after turnaround 2006 and will help reduce NH3 contents
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
of effluent water and provide additional urea production of 17 MTPD. Cooling tower packing
replacement for another two cells shall be completed before the onset of next summer season
and is expected to yield a saving of Rs. 12.50 million per annum through improved energy
efficiency.
Information technology culture was successfully inculcated at the plant in order to reduce and
simplify routine workload and to keep pace with modern technology. the marks are modern fiber
optic network , new inventory management system and computer training of all employees.
HIGHLIGHTS – 2009 and 2010
Mirpur Mathelo
Highest ever monthly shipments of 71,055 mt, 68,455 mt and 73,250 mt
were made ex-Mirpur Mathelo in the months of March, May and October
2010 respectively.
Highest ever daily shipments of 3,565 mt were made on December 31, 2009.
Plant Fauji Fertilizer Bin Qasim LimitedOffice Cherifien des Phosphates (OCP) Group of Morocco and Fauji Group including Fauji
Foundation, Fauji Fertilizer Company Limited and Fauji Fertilizer Bin Qasim Limited, have
entered into a Joint Venture Company in Morocco named “Pakistan Maroc Phosphore S.A” with
equity of 800 Million Moroccan Dirhams. The proposed project is planned to be located at Jorf
Lasfar , Morocco , where OCP already has a large chemical complex. This Project will produce
375,000 MT Phosphoric Acid per year by consuming 1,300,000 MT Phosphate Rock and
370,000 MT Granular Sulfur. It is not a grass root project and will utilize basic infrastructure and
ancillary facilities already present at Jorf Lsafar Site. The cost of the project is estimated at US$
203 Million and is likely to start commercial production by early 2007. It will meet total
requirement of phosphoric acid for the DAP production in FFBL plant at Bin Qasim. Fauji
Fertilizer Bin Qasim Limited is a US$ 461 Million Project, one of the largest in private sector in
Pakistan, producing both DAP and Granular Urea for the first time in the country. The project is
sponsored by the largest and well known industrial group of Faujis and Jordan Phosphate Mines
Company. Termination agreement with Jordan Phosphate Mines Company Limited (JPMC) was
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
signed on 24/06/2003, with the same JPMC is no more a partner or equity holder in the
Company. A long term agreement for the Supply of Phosphoric Acid between Maroc Phosphore
S.A, a wholly owned subsidy of Office Cherifien Des Phosphates, Morocco was signed on July
21, 2003. DAP Plant recommenced its production on September 22, 2003 and supply of DAP in
the market started thereto.
HIGHLIGHTS – 2009 and 2010
Bin Qasim / Port
Highest ever daily shipment of 3,740 mt, of Sona DAP ex-FFBL was recorded
on September 27, 2009.
Highest ever daily shipment of 7,105 mt comprising 3,440 mt Sona Urea (G) &
3,665 mt Sona DAP ex-FFBL was recorded on October 28, 2008.
MV Brother Glorry, carrying 39,628 mt DAP berthed at KPT on November 15,
2010 and was discharged in record time, earning 34,236 US$ in dispatch money for the
company.
Capacity UtilizationQuantitative Data (Production) of Sona Urea-2009 (Figures in Tonnes)
Months Plant 1,GM Plant II, GM Plant III.MM
For the
Month
Cumulati
ve
For the
Month
Cumulati
ve
For the
Month
Cumulative
Jan (p
)
72600 72600 69400 69400 63600 63600
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
(A
)
72753 72753 73410 73410 57589 57589
Feb (P
)
64800 137400 62300 131700 59300 122900
(A
)
65535 138288 66774 140184 64249 121838
Ma
r
(p
)
74000 211400 71200 202900 65800 188700
(A
)
71077 209365 69078 202962 70780 192618
Apr (P) 71300 282700 62000 264900 65800 254500
(A) 65373 274738 69504 278766 68445 261063
Ma
y
(p) 71000 353700 71100 336000 65300 319800
(A) 74097 348835 72901 351667 68402 329465
Jun (p) 70100 423800 68600 404600 63200 383000
(A) 70076 418911 70262 422129 68622 398087
Jul (p) 72500 496300 67800 472400 65300 448300
(A) 71035 489946 72155 494284 69663 467750
Months Plant 1,GM Plant II, GM Plant III.MM
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
For the
Month
Cumulati
ve
For the
Month
Cumulati
ve
For the
Month
Cumulativ
e
Aug (p
)
70100 566400 70000 542400 65800 514100
(A
)
70892 560838 71654 565938 70165 537915
Sep (P
)
71000 637400 66100 608500 65800 579000
(A
)
68204 629042 68657 634595 67029 604944
Oct (p
)
21600 659000 69800 678300 57500 637400
(A
)
29349 658391 68122 702717 65147 670091
Nov (P) 72500 731500 67100 745400 66300 703700
(A) 70151 728542 70206 772923 67813 737904
Dec (p) 73500 805000 69600 815000 66300 770000
(A) 78679 807221 73690 846613 72419 810323
(P) = PLAN
(A) = ACTUAL
Reasons of attaining phenomenal utilization capacity: State of the art production facilities
Excellent HR
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Effective integration with distribution, warehousing and sales departments.
Effective Planning
Control over MARI Gas fields
Demand > Supply
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Production/Sale at a glance
Urea Production (Met/Year) Sale (Met/Year)
Years
Goth MachiM.Math
eloTotal
Urea DomesticUrea
Export
Urea
Importe
d
Phos*/
PotassicTotal
PLA
NT-I
PLAN
T-II
PLANT-
IIISona FFC
1982 325,4 - - 325,452 267,641 - - - - 267,64
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
52 1
1983566,7
71- - 566,771 493,339 - 42,000 - -
535,33
9
1984589,2
58- - 589,258 474,439 - 140,772 - -
615,21
1
1985598,6
94- - 598,694 521,898 - 78,957 - -
600,85
5
1986594,9
01- - 594,901 581,683 - 65,237 - -
646,92
0
1987632,0
79- - 632,079 587,891 - - 2,907 -
590,79
8
1988637,7
37- - 637,737 642,857 - - 22,542 -
665,39
9
1989632,9
72- - 632,972 678,430 - - 2,605
162,113/
14,086
857,23
4
1990652,6
65- - 652,665 645,188 - - 134,366
169,943/
24,229
973,72
6
1991629,2
66- - 629,266 643,608 - - 206,244
148,753/
18,945
1,017,
550
1992648,1
78- - 648,178 647,460 - - 187,058
153,025/
16,040
1,003,
583
1993657,3
76
477,33
9-
1,134,7
15
1,176,6
11- - 129,006
207,038/
7,147
1,519,
802
1994678,1
14
659,52
6-
1,337,6
40
1,288,8
11- - 33,387
192,002/
8,210
1,522,
410
1995680,0
62
700,03
1-
1,380,0
93
1,422,6
66- - 60,604
122,640/
9,527
1,615,
437
1996 710,8 695,74 - 1,406,6 1,413,9 - - 238,130 144,969/ 1,798,
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
62 9 11 07 1,446 452
1997773,0
48
734,27
5-
1,507,3
23
1,482,9
48- - 146,813
81,181/
0
1,710,
942
1998742,5
99
682,96
9-
1,425,5
68
1,449,2
01- - 169,610
187,392/
0
1,806,
203
1999726,7
23
734,68
9-
1,461,4
12
1,581,6
55- - 26,277
291,499/
0
1,899,
431
2000729,8
64
695,93
8-
1,425,8
02
1,793,5
54- 63,350 0
321,977/
9,269
2,188,
150
2001737,6
07
756,41
7-
1,494,0
24
1,883,8
49- - 34,035
340,301/
9,377
2,267,
562
2002801,8
25
713,88
9
368,575*
*
1,884,2
89
2,033,8
83
328,14
757,000 -
285,776/
7,718
2,712,
524
2003784,8
26
738,32
7626,716
2,149,8
69
2,065,4
59
598,79
218,500 -
475,491/
10,947
3,169,
189
2004741,8
31
716,62
1715,577
2,174,0
29
2,708,5
44
148,83
213,500 105,693
515,993/
11,451
3,504,
013
2005820,4
54
772,82
5709,526
2,302,8
05
2,891,8
82- - 314,701
572,990/
45,293
3,824,
866
2006809,3
73
760,44
2725,839
2,295,6
54
2,888,6
68- - 321,601
824,361/
20,426
4,055,
056
2007829,2
50
810,67
3680,442
2,320,3
65
2,771,8
61- - 96,976
562,276/
17,305
3,448,
418
2008841,1
17
797,10
8683,986
2,322,2
11
3,027,2
45- - 58,370
348,275/
19,364
3,453,
254
2009807,2
21
846,61
3810,323
2,464,1
57
3,088,3
82- - -
708,886/
41,128
3,838,
396
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Part FIVE
Company Marketing Mix
Bottle neck problem at GOTH Machi:At Goth Machi within a radius of 65 Km there are 3 production plants (FFC, Fatima and Engro)
so it creates a bottle for trucks to tale the fertilizer inventory out of the Goth Machi.
Solution Recommended: Build an additional strategic warehouse at Goth Machi
Forward Integration into transport business
Improved facilities for truckers
Improved economic incentive for truckers
Long term agreements with transport dealer
Increase rely on railways
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Part 5
MARKETING MIX
Marketing Mix consists of major components: Product, Place, Promotion and Price. These
components are called marketing decision variables because a marketing manager can vary the
type and amount of each element. One primary goal is to create and maintain a marketing mix
that satisfies consumer’s needs for a general product type. Marketing mix often is viewed as
“controllable” variables because they can be changed. However, there are no limits to how much
these variables can be altered. They are not totally controllable major components of Marketing
Mix:
1. Product
2. Place
3. Price
4. Promotion
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
FFC Product Mix
FFC PRODUCTS SONA UREA (Prilled)
IMPORTED UREA FFC
UREA FINES
DAP – FFC
SOP
TSP – FFC
SONA BORON (BORAX)
FFBL PRODUCTS (Marketed By FFC) SONA UREA (Granular)
IMPORTED UREA FFBL
SONA DAP
SONA UREASona Urea is the most concentrated solid, straight
nitrogenous and most widely used fertilizer in the country.
Mostly it is manufactured in the form of prills, but FFC is
producing in prilled as well as granular forms. Prilled and
granular fertilizers are white in color, free flowing, readily
soluble in water and both contain 46% Nitrogen. Because of its
high solubility, it is suitable for solution fertilizers and foliar
application. Urea is the best suited to our soils because some of
the salient physical and chemical characteristics of Sona
Urea Prilled and Granular are below.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
DescriptionActualStatus
Prilled Granular
Physical Condition Free Flowing Prills Free Flowing Granules
Nitrogen(%) 46 46
Moisture (%) < 0.30 < 0.30
Biuret (%) 0.80 ~ 0.87 0.80 ~ 0.87
Fines (%) < 1.0 Dust Free
AV Prill Size (mm) 1.82 ~ 2.0 2.0 ~ 5.0
SONA DAP DAP is the most concentrated phosphatic fertilizer containing 46% P2O5 and 18% Nitrogen.
From nutrients' concentration point of view, it has got the highest quantity of total nutrients in a
50 KG bag i.e. 32 KG of nutrients / bag. The highest concentration of plant nutrients in a bag
helps saving costs of transportation, handling, storage and application. It is the widely used
phosphatic fertilizer in the world as well as Pakistan. The solubility of DAP is more than 95%,
which is highest among the phosphatic fertilizers available in the country. Due to high solubility
it can also be used through fertigation as well as by foliar application. Its nitrogen to phosphoris
ratio ( 1 : 2.5 ) makes it an ideal fertilizer for Basal application to meet the initial requirement of
most of the crops. Having an ultimate acidic effect on the soil, it is well suited for our alkaline
soils. Its salient characteristics are listed below:
Description Actual Status
Nitrogen (%) 18
P2O5 (%) 46
Crushing Strength (Kg) 6
Size (mm) 2 ~ 4
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Moisture (%) < 0.7
FFC SOPThis fertilizer is an important source of Potash, which is a quality nutrient for production of crops
especially fruits and vegetables. Potash is an important nutrient for activation of enzymes in the plant
body and helps increasing sugar and starch contents. Potash improves the resistance of the plants
against pests, diseases and stresses like water / frost injury etc. FFC SOP contains 50% K20 in addition to
18% sulfur, which is also an important nutrient especially for oil seed crops and it also has an
ameliorating effect on salt-affected soils. As readily soluble in water so it can be used through fertigation
as well as foliar application. SOP is well suited fertilizer for all types of crops and soil. Use of potassic
fertilizer in Pakistan is minimal, which needs to be promoted for qualitative as well as quantitative crop
production.
Classification of & Share of products
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
S.No Products % Share
1 Nitrogenous Fertilizers
I. Urea 70.6
II. Calcium Ammonium Nitrate (CAN) 5.3
2 Phosphatic Fertilizers
I. Single Super Phosphate (SSP) 3.4
II. Triple Super Phosphate (TSP) 0.02
3 N/P Fertilizer
I. Di Ammonium Phosphate (DAP) 14.6
II. Nitro-Phosphate 4.6
4 Potash Fertilizers
I. Sulphate of Potash (SOP) 0
5 Mixed Fertilizers
I. N:P:K (in various ratios) 1.5
TOTAL 100
DEMAND VS SUPPLY
The demand for urea has been increasing consistently and significantly. This is due to two
factors: the government of Pakistan besides offering various incentives to the fertilizer
manufacturers to keep the cost of production low also extending soft term loans to growers for
the purchase of various inputs. The manufacturers have been able to take the fullest advantage of
the GOP policies and have expanded the production capacities over the years. This, on the one
hand, has helped the country in achieving self sufficiency in the production of urea and, on the
other hand, has reduced the foreign exchange expenditure on import of the product.
Consumption of urea is seasonal. In the past, during the peak consumption period, some
unscrupulous elements used to indulge in black marketing of the commodity. However, with the
enhanced availability of indigenously produced urea and an elaborate dealer’s network the
manufacturers have been able to minimize such incidence.
Product strategiesDifferentiation StrategyUrea is quality product as described earlier and FFC do not compromise on quality. Therefore, in
product strategy, they are following differentiation strategy.
Product line extensionCurrently FFC is following this strategy and adding new formulas to existing product categories
and it is using already established promotion for these products.
Future outlookNew brand strategyFFC is gtoing to pursue new brand strategy by introducing new product categories.FFC has plans
to diversify in near future as engro has diversified to FMCGs
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
PRICEIt is the value that one puts on the utility that one receives of goods and services.
It includes price determination; pricing policies; and specific pricing strategies.
Sona Urea Maximum Sale Price Per Bag Sona Urea Pearled Rs. 850 Per 50 Kilogram Sona Urea
Granular Rs. 853 Per 50 Kilogram Fauji Fertilizer Company Limited FFC
PRICING STRATEGIES.As the demand for product is much higher than that of
supply it is a signal to charge high price as there is
monopolistic competition is prevailing in the market.
FFC applies premium pricing strategy for almost its entire
product. It charges high price but its high quality is
enough to offset the effect of high price. Premium pricing
is the practice of keeping the price of a product or service
artificially high in order to encourage favorable
perceptions among buyers. The practice is intended to
assume that expensive items enjoy an exceptional reputation or represent exceptional quality
distinction.
Product Price
Sona Urea (P) 17000/tone
Sona Urea (G) 17060/tone
Sona DAP 51040/tone
Sona SOP 45840/ tone
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
PLACEMENTIt is the making available of products in quantity desired to as many customers as possible and to
hold the total inventory, transportation and storage costs as low as possible. It includes selection,
Coordination and evaluation of channels; transportation; warehousing; and inventory control.
The product is distributed directly from the plants. There is a great demand of fertilizers in the
country and company is having in advance orders. But to make the whole system very smooth a
company is having well structured distribution department. Which coordinates with carriers both
company and individuals, Because fertilizers is required in all the parts of the country and FFC
being a national firm takes it as it obligation that its product is distributed trough out the country.
The company also ensures that the prices of the product do not vary in any part of the country
because of transportation cost. For this purpose company gives some discount to those dealers,
who belong to far-flung areas.
The distribution department makes contract with private contractors to accomplish the tasks. The
contractors are responsible for any loss to the product on the way. The management also pays
surprise visit at different dealers shop to ensure that the quantity in the bag, quality and price are
the same as suggested by the company policy.
Distribution Distribution department is of the major department helping the sales force. The primary function
of distribution department is to ensure effective and efficient distribution of product from plants
up to the final customers.
Objectives Coordinate with plant management to ensure smooth operations.
Ship out entire production of FFC and FFBL plants and imported fertilizer in accost
effective manner(3.4 MT approx)
Follow up of product quality complaints.
Satisfying 3580 dealers, 1632 direct customers and 165 warehouses.
Plan and undertake self imports/exports and ensure prompt handling , quality
packing ,correct weight, timely delivery and documentation.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Monitor packing availability and arrange safe storage of surplus production during lean
months.
Maintain liaison with Pakistan railway, NLC, port authorities and suppliers.
Transportation Arrangements
Private trucking contractions
NLC
Pakistan railway
Customer served
Dealers 3580
Direct customers 1632
Total 5212
Zone wise Warehouses and capacity
Zone Regions Warehouses Capacity MT
North 5 63 136700
Central 5 53 119400
South 4 49 78400
Total 14 165 334500
Functions of warehouse department Co ordination
Inspections
Training
Formulating warehouse plan
Weekly capacity reports
Duties of Warehouse Supervisor
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
The basic purpose of the Supervisor is to checkout all the procedure related to warehouse.
Consider the security procedure.
Follow all the precaution received from the regional office.
Product wise record of the bags and monthly report send to regional office.
Check all the work of the handling contractor and watch & ward to insure that all the
work is doing according to the agreement.
Preparation of the documents carefully because any error can create a big problem
Preparation of the transaction registers on daily basis.
Signed all the vouchers carefully
Take sign of the dealers on the invoices and send to regional office immediately.
Prepare tally sheet on daily basis
All the important documents should be under locked. For example Invoice book and
SMR (Stock Movement Report) etc.
SMR Report will be send to Marketing Division Lahore on daily basis it depends on the
transaction.
Other duties of the Supervisor
Open the lock of the warehouse in the presence of the watch & ward.
Sure the condition of the lock before the open.
Lock the warehouse under the presence of the watch & ward.
The products should be stored separately.
In one line the maximum bags should be 20 not access.
There must be a gap between two lines and the gap should be two fits not more.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Sales Promotion
Promotion is the backbone of the successful marketing network. But in fertilizer industry in
Pakistan companies need little promotion to achieve its objectives. And the reason is because
demand is greater than supply. But FFC does it for many good reasons one of them is to protect
its brand name, that is SONA Actually company wants that whenever any former in the country
thinks to use fertilizers the only name that should come into his mind should be SONA.
FFC marketing division Lahore has a sales promotion department, which is working under
marketing service department, is responsible all the promotional activities. The department is
using various ways to promote their products. These are d ifferent Medias used at FFC for
promotion.
Strategies are dynamic and change as per requirement
Seasonality factor is most important while making strategies
Sales depend upon season
Strategies regarding advertisements are rarely intensive.
Marketing Services Planning
Technical services
Advertising and Sales promotion
Objectives1. To create demand
2. Build brand image
3. Build corporate image
4. Build strength and loyalty among customers and dealers
5. Improve visibility
6. Create differentiated identity
7. Not to maintain market leadership but also to supersede current objectives
8. Earn popularity not purchase
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Means Electronic media
Outdoor media
Electronic media TV, Radio, InternetOutdoor media Bill boards, holding etc
During short supply radio is used
Frequency of usage changes according to needs
Media strategies are made by committee which listens to and watches ads by our
advertising agency
Advertising agency is not static. Decision is made by committee
Sales promotion department has keep a special liaison with other marketing services department
i.e. planning and technology.
Media used at FFC for promotion Television
Radio
CCTV
Print media
Road side
Point of purchase
Electronic Media Ptv
Ptv -world
KTN (Sindhi Language)
GEO
Indus T.V
ARY-Digital
Campaigns
Kharif campaign
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Rabi campaign
Radio National radio channels
Add duration 10sec-60sec
All around the year
CCTV Islamabad airport
Multan airport
Faisalabad airport
Lahore railway station
Multan railway station
Hyderabad railway station
Faisalabad railway station
Daewoo coaches
Daewoo lounges
Print Media National daily’s
Regional news paper
International magazines
National magazines
Regional cultural magazines
Add size 108 pcm(standard size of add)
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Road side Advertisement Jumbo hoardings
Bill boards
Ware house boards
Dealer shops boards
Plastic whole signs
Point of Purchase Crop posters
Corporate posters
Crop booklets
Agro grams
Zari reports
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Corporate Social Responsibility at FFC
For Fauji Fertilizer Company Limited, social responsibility
means facilitating communities and empowering its people.
Sustainability shall always remain quintessential for the
performance of CSR. Historically, FFC has always been
socially a responsible corporate entity. The Company started its
CSR per se as early as in 1982 by introducing Agri-Services
thus helping in poverty alleviation of common farmer and
assisting them in sustained empowerment. Gradually FFC
started interventions in most of the defined sectors and has
developed a history of about 30 years of contributions to the
society.FFC, further plans to bring sustainability in its interventions and desires to achieve
international standards by aligning CSR with our business objectives. FFC is also committed to
improve quality and quantum of its interventions by maximizing on the available resources.
Since FFC has become member of covenants like UNGC, the CSR has to be aligned with
international guidelines. It is necessary to standardize the interventions and monitor the quality
of interventions at a central level. We need to stay committed to its principles. Keeping the
vision of responsible corporate entity in mind, FFC has moved in this direction. FFC has made
quality as its core value when it comes to CSR intervention at any level, and in future this will
remain as the prime objective.
CSR Objectives
Company’s obligations of paying back to the society from which it derives its
economic gains.
Address stakeholder concerns and invest in the communities in the vicinity of our
fertilizer plants.
Empower the small and medium farmers all over Pakistan
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Incorporating UNGC Principles in our governance.
Contribute in achievement of UN Millennium Development Goals.
Current CSR Interventions
As most of the sustainability conscious organizations around the world do, FFC is playing its part actively in this direction. Being the brand leader in fertilizer sector with the biggest market share and counted among one of the leading corporate entity in Pakistan, FFC understands its obligation in nation building and well being of deprived communities around the plant sites. Under the charter of FFC CSR interventions, following sectors have been made part of the program
Education
Health Care
Environment
Poverty Alleviation
Sports
Annual Fun Fares
Relief & Rehab for flood affectees
Health Care
Availability of medical facilities is essential for a productive society.FFC has embarked on a
mission of upgrading and building new modern facilities for the natives living in Rahim Yar
Khan and Ghotki districts under its CSR intervention in the field of health. Some of these
interventions are:
Sona Welfare Hospital
Hazrat Bilal Trust Hospital
Coronary Care Unit
Free Medical Camps
Sona Welfare Hospital
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Sona Welfare Hospital (SWH), Mirpur Mathelo was constructed at a cost of Rs. 12.5 Million in
2006. SWH offers following facilities and
services which include:
High-tech X-ray
Ultrasound
Pathology laboratory
10 Beds for emergency treatment of
indoor patients
OPD for outdoor patients
Free consultation (Male Doctor and
Female Gynecologist available)
Free snake bite treatment
Free emergency treatment & ambulance service Subsidized medicines, lab test, x-ray
and ultra sound (50% of the actual cost) 30% discount for dog bite patients
30% discount for dog bite patients SWH has a capacity of providing outdoor treatment to about
100 patients per day. SWH has under its belt the services of best medical staff and is a great
relief to the underserved communities in District Ghotki. The treatment at SWH is free of cost as
well as subsidized, which is serving as a life line to hundreds of patient in the entire district of
Ghotki. SWH free treatment for snake and dog bite cases is a rare facility in these
underprivileged areas.
Hazrat Bilal Trust Hospital
Hazrat Bilal Trust Hospital (HBT) was established in 1986 by FFC near Goth Machhi Plant.
Initially it had a capacity of 10 beds but gradually it was expanded to 22 beds. It can cater for
about 125 outdoor patients per day. A new 25 beds building is under construction. The hospital
will soon start its Dental section as well as a vocational training centre. HBT has the honor of
running the largest TB cure program in Rahim Yar Khan with significant success ratio. Some of
the services available at HBT are:
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Complete treatment for TB patients
OPD
Fully equipped eye department
Operation theatre for Lens surgery
X-Ray & Ultra Sound
Lab tests
Hepatitis test facility
Snake & Dog bite treatment
Coronary Care Unit
The CCU facility provided by FFC in 2008 at DHQ Hospital, Mirpur Mathelo, is designed to
provide life saving advance management of cardiac patients. It is equipped with latest medical
equipment & monitoring systems. CCU is
an example of FFC commitment for
providing health care to the under
privileged communities of these areas.
Some of the facilities and services
provided at CCU are:
Treatment Capacity of 9 Beds
Cardiac Monitors
Defibrillator
ECG Machines
Pulse Ox meter
Mobile & Automatic Gas Delivery System
Flow meter
Suction Injector Unit
Free Medical Camps
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
FFC organizes various medical camps for free treatment of general public in District Ghotki and
Rahim Yar Khan. In the year 2010, FFC arranged 32 free medical camps in the area near FFC
plants.
Some of the camps arranged were in the field of general medicine, skin and eye treatment
providing relief to the local people of far flung areas. The patients are provided with free
medicines at the camp while referrals are also made to SWH for advance treatment, free of cost.
Such health care service at the door step was unimaginable in the past and this activity provides
relief to thousands of patients every year.
Environment
“We do not inherit the earth from our ancestors; we borrow it from our children” (American
Proverb)
FFC has over the years strived to adopt best security and precautionary measures in order to
safeguard environment and lives of its working staff. Following are the initiatives undertaken by
FFC in this direction
Recycling
Green Planet
Renewable Energy
Recycling
The Company has adopted all possible measures to
safeguard the environment. FFC continues to introduce most
modern and Environmental Friendly Technologies in its
manufacturing plants. The bottom line for FFC operations
remain its 3’R approach comprising of reduce, re-use and recycle. FFC has maximized water use
by water recycling and minimizing the wastage of water. Regular technical training and safety
sessions have helped FFC achieve zero accident ratios during operation at plant sites. In
recognition for its efforts, FFC has been awarded many prestigious awards for its compliance
with International Safety Standards (ISS). Some of these are
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Certification of Quality Management System[ISO-9001:2008]
Occupational health & Safety Assessment Series[OHSAS-18001:2008
Environmental Management System[ISO-14001:2004]
Compliance with National Environmental Quality Standards [NEQS]
Green Planet
The total area of forests in Pakistan according to the recent
estimate is 4.224 million hector which is 4.8% of the total land
area. The deforestation rate in Pakistan is among top five
countries in the world, which is a grave threat ignored so far.
FFC has been working in partnership with Forest Department in
plantation of trees in District Rahim Yar Khan and shall
continue this partnership in future for district Ghotki as well
Renewable Energy
In its diversification efforts, FFC has embarked on a
Renewable Energy Project to install a 50 MW Wind Energy
Farm at Jhampir in Sindh province to providing cleaner
energy. For future, FFC has a plan to expand its output to
150MW. In addition, this initiative is also aimed to provide
much needed relief to the on going energy crisis faced by
Pakistan, as this will be a valuable indigenous addition to the power grid of the nation. It is also
inline with the global vision of eco friendly natural energy and FFC is spearheading this sector in
Pakistan. Some important facts about wind energy are:
Zero emission, making it the most eco friendly source
Economically suitable amid rising fuel prices
Indigenous inexhaustible energy source
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Poverty Alleviation
FFC CSR has undertaken concrete measures for poverty alleviation in Pakistan. Some of these
are as follows:
Technical Training Centre
Sona Vocational Centre
Agri Service
FFC Contribution to Agriculture Research Globally
Technical Training Centre
Technical training is considered to be a method of immediate relief from the shackles of poverty
by imparting useful practical knowledge of basic technical trades. FFC has established its
Technical Training Center (TTC) at plant site, Rahim Yar Khan. TTC programs involve courses
for staff of FFC as well as young matriculate students from adjoining areas. Some highlights of
TTC are:
Matriculate students from surrounding community completed 3 months Mechanical
Craft Course.
3 sessions on first aid training.
3 programs were arranged on defensive driving. Highway and Motorway Police
provided resource persons for this training.
3 courses on MS-EXEL 2007, MS-WORD 2007 and MS-POWER POINT were
organized.
53 Skill Improvement Programs were held in trades of operation, equipment
maintenance, machinery maintenance, instrument and electrical.
3 courses were conducted for ENGRO including two courses on machinery
maintenance and one on equipment maintenance.
Sona Vocational Centre
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Sona Vocational Centre (SVC) has been established at
Mirpur Mathelo. It started its operation in February 2009.
The aim behind SVC is to empower womenfolk of the
society, who face deprivation especially in the rural areas of
our country. Courses covered under SVC program are:
Tailoring & Stitching
Hand Embroidery
Machine Embroidery
Aar Work
Neck Designing
Cooking
Beautician
Qurashia
All the courses running under SVC program are free of cost for women.
Agri Service
FFC has been providing Agricultural Advisory Services to the farming community throughout
Pakistan since 1982, for increasing the agriculture
production in general and the farmers’ economic
returns in particular. Till date more than 1.5 million
farmers have been given agriculture support under
this program. Farm Advisory Centers are located in 5
cities of Pakistan, having a team of agricultural
expert providing miscellaneous advisory services through
Training Programs for the farmers
Crop Demonstrations
Field Days
Farmer Meetings
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Village Meetings
Crop Seminars
Farm Visits
Group Discussions.
All the centers are fully equipped with modern sophisticated computerized Soil & Water Testing
Laboratories and high-tech extension equipment. For stronger link and timely guidance of
farmers, FFC publishes a quarterly Urdu and Sindhi News Letter “Zarai Report” containing
season specific information regarding crops, fruits, vegetables, improved agronomic practices
and articles on agricultural issues. FFC technical teams maintain close coordination with
government departments working on these lines, so that more and more users can avail these
services. Farmers from across Pakistan can avail these services as FFC offers e-service through
its web site and via email correspondence.
FFC Contribution to Agriculture Research
FFC always strives for new research and techniques in the field of agriculture and fertilizer
industry. Team of experts from the field of agriculture, continuously devises new methods of
agriculture. FFC research work makes its way to both international and local agriculture/
fertilizer sector journals. Some of these are:
International Fertilizer Industry Association (IFA) Brochure
Soil & Environment (Pakistan Journal of Soil Science)
Proceedings of National Fertilizer Development Centre
Farming Outlook
Monthly Kissan World, Lahore
Monthly Zari Dunya, Lahore
Monthly Jadid Ziraat, Lahore
Monthly Dhamak, Lahore
Monthly Nidaay Kissan, Lahore
Monthly Mahyaar, Lahore
Monthly Kissan Wing, Lahore
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Sports
FFC has always been encouraging healthy activities and continues to support sports events in the
areas of Rahim Yar Khan and Ghotki as well as on national level. Some of the sports events
sponsored by FFC are :
All Punjab Sona Cup Girls Handball Championship
National Tae Kwondo Championship
3rd Jashan-e-Baharan Handball Mela
All Pakistan Football Tournament
Sona Cup Kabbadi Tournament
Jashan-e-Pakistan Volley Ball Tournament
2nd Twenty 20 Deaf Cricket National Champsionship
3rd M. Shamim Memorial Football Tournament
2nd Summer Season Dist. Football Tournament
Sponsorship for 15th Tour De Cycle Race
Quaid e Azam Football Tournament
District Hockey Championship-2009
Hockey Coaching Camp at Sadikabad
Interschool & College Handball
9th Sona Golf Championship
League Football Championship
3rd Anti Narcotics District Hand Ball Mela
Jashan-e-Aazadi District Throw Ball Tournament
FFC also sponsors numerous district and national level events and has assumed the role of patron
in this field. This contribution has also helped in encouraging and developing new talent in
Pakistan.
Flood Relief and Rehab
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Relief to flood effectees in district Rahim Yar Khan and Ghotki
Distribution of Dry Ration by FFC
As per the CSR commitment of Fauji Fertilizer Company Limited, one more time, relief was provided to the communities in district Rahim Yar Khan and Ghotki, on 14th and 15 April 2011 at Kot Sabzal. More than 750 flood effected families (comprising of 10 people per family) were distributed one month dry ration consisting of rice, wheat, pulses, sugar, Ghee, tea, biscuits, mineral water, Dates ,hygiene packs (detergent,toothpaste,tooth brush,soap) etc. This activity was a joint collaboration with Pakistan Red Crescent Society.
In 2010, Pakistan witnessed a devastating flood that annihilated dozens of villages and destroyed
the road and irrigation infrastructure. According to the figures released by the Government of
Pakistan, an estimated loss of $9.7 billion was caused by these floods nationwide.
In districts Rahim Yar Khan and Ghotki, flood had crippled the lives of people of the area. FFC
thus took the task of shouldering its share of responsibility initially in flood relief effort for the
affected natives of District Rahim Yar Khan and Ghotki. Some of these relief efforts were:
Distribution of cooked food
Dry ration for families
Transport for Evacuation
Mineral & FFC filtered Drinking Water
Tents/ shelters
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Cloths, Blankets & Shoes for the affected families
Soap & Washing Powder
Crockery
FFC employees voluntarily made remarkable contribution in their respective plant sites which
amounts to millions. Food, drinking water, beddings, shelters and clothing was provided to the
flood affectees in the relief phase of the operation. Medical teams from FFC medical units
performed day night service for the flood affectees in Rahim Yar Khan and Ghotki, saving many
precious lives.
Rehabilitation
FFC has taken up the challenge of reconstructing 3 villages of districts Rahim Yar Khan and
Ghotki. The intervention is planned in Reconstructing of Houses, Education, Health, Shelter,
Water and Sanitation and Infrastructure. This project of rehabilitation and reconstruction will
cost 102 million (PKR) out of which 50% will be contributed by FFC.
A project has been devised to construct
Houses, water supply, pathways & sanitation
facility for the affected natives of Muaza
Chacharan, Mohib Shah (Rahim Yar Khan)
and Chuttoo Chachar (Ghotki). FFC while
acting as a responsible corporate entity has
lead from the front in this time of national
grief and has played an exemplary role for
other entities to come forward and contribute their share
Overview of FFC CSR Future CommitmentsFFC shall work with renewed vigor to alleviate the suffering of deprived all over Pakistan. With
this, FFC desires to address the concerns of all its stakeholders especially the communities in the
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
neighborhood of its manufacturing plants. In the year 2011, FFC plans to develop a CSR culture
in the Company by involving all cadres of management, including senior management for
achievement of social responsibility objectives.
FFC vision of a responsible corporate entity is reflected by from its CSR program. With its
intervention in health, education, poverty alleviation, sports, environmental protection and flood
rehabilitation, FFC is endeavoring to make a humble contribution to the society.
FFC had embarked on the mission of uplifting the underprivileged communities around the plant
sites. FFC is well underway in developing a CSR culture internally and has aligned itself with
the commitments and vision of United Nation Global Compact and UN Millennium
Development Goals.
Safety and Environment
Safety has always been a hallmark of FFC performance. FFC has always placed safety ahead of
all other business requirements. We have come a long way to develop a safety culture where
everybody speaks safety language.
Achievement of over 23 million man-hours of safe operations is reflective of our best corporate
Practices.
Philosophy:
FFC believe that most of the accidents are caused by human error and are preventable. The
management recognizes that safety is of prime importance and high production targets can only
be achieved through a good safety performance. FFC endeavors excellence in the field of
personnel and plant safety. Personnel safety is regarded above all business requirements.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Achievements:
The company runs a safety program through which all employees are educated and trained to
perform their duties safely. The effectiveness of the safety program is reflected by the various
awards won from National Safety Council (USA) since 1982. The company has received 15
awards of honor. Two special safety awards on outstanding performance were given to FFC in
1989 / 1993 by the council for constantly achieving outstanding performance in the field of
safety. FFC also has the honor of achieving all time best 16.49 Million man-hours without lost
time injury as of 31 December 2001, which is the all time best.
Program:All safety achievements are accomplished by coordinated efforts of the safety section and all
departments. A safety culture at the plant site is created in which employees are motivated to
participate in safety talks, slogan competitions and safety incentive programs. Housekeeping is
the essential feature of our safety programs, which enables us to keep our plant in excellent
presentable form.
All employees receive token award on achievements of safe million man-hours milestone. The
company not only believes in safety at the plant but also promotes off the job safety. Township
residents and both schools are also part of safety program.
Monitoring and Control:
Plant safety performance is reviewed monthly by safe operation committee (SOC). General
Manager Plant is the Chairman and all departments Managers are SOC members. Routine plant
audits ensure compliance to all safety standards applicable to the industry and strict compliance
to industrial codes is
adhered to for the new
installations and
modifications.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Description No. of Awards Received
Award of Honor 15
First Place Award 05
Second Place Award 04
Award of Merit 04
Outstanding Safety Award 2
AWARDS FROM NATIONAL SAFETY COUNCIL, USA
Environment:
Like safety, environment at plant site is held sacrosanct. All efforts remain focused on the
maintenance, preservation and improvement of environment. If not complete elimination,
mitigation of pollution is the primary goal. Management is completely committed in its support
to sustenance of environment, which encompasses pollution, noise and greenery. FFC has spent
millions in achieving a complete control of the environment. For FFC, end of the pipe treatment
remains the last resort. It believes in mitigating pollution through recycling, elimination or
bringing changes to the system. Plant operation is strictly controlled to maintain a safe
environment for plant personnel as well as the surrounding community.
FUTURE OUTLOOKThis company always looks into the future prospects of growth through innovation and
diversification; FFC seek to increase productivity and profitability for enhancing returns to our
shareholders.
It shall continue to explore and tap opportunities, face challenges and make course corrections
where necessary to achieve goals for the betterment of Company and the Country. Government
policies, global & domestic economic forces and the money market would play a vital role in
decisions and ability to meet business objectives.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
FFC has progressed remarkably from its inception in 1978 till to date. Three projects in a span of
less than 20 years have been set up. Each of these have incurred an investment of over 300
million US$ amounting to one of the largest investments in Pakistan. This performance record is
considered unparalleled in the country and matches high standards anywhere in the world. At
this point in time, the company is preparing to harmonize itself with new century. Building on
the foundations of the last 20 years, the company is confident to take on the new challenges.
FFC’s vision for the 21st century looks for diversification and establishing projects beyond the
territorial limits of the country in collaboration with world famous international industrial
holdings. The list of different projects that are being evaluated at present are:
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Oil Refinery Paper Mill Project
Software Development House Off-Shore Fertilizer Complex
Mineral Acid Production Petrochemical
Revamp of existing FFC facilities
Part SIX Company Accounting/Finance System
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Part 6
Company Financial Analysis
Finance & Accounting System of FFCThe Accounting System of the company is designed and installed by a team of people with many
specialized talents, System Analysts, Internal Auditors, and Chartered Accountants who work
full time in designing and improving the Accounting System.
Company uses double entry accounting system. Accounts are prepared and maintained with
compliance to the International Accounting Standards. The accounting system of the company
comprises of 4 independent sections which are on different locations. That are: - Plant Goth
Machhi, Plant Mirpur Mathelo, Marketing Division, and Head Office. Financial Reports of the
company are prepared according to the 4th schedule of the Companies Ordinance 1984.
Independent set of books of accounts are maintained at each location and monthly Trial Balances
are extracted. At each month end, six monthly, and Annual consolidated financial statements are
prepared in accordance with statutory requirements.
Head Office decides maintaining their day to day transactions, share records, lender records, etc.
and carried out consolidation job.
Marketing Division records transactions regarding sales & purchase of fertilizer, Dealers
Account, Accounts of Selling Expenses, and Marketing Expenses. Manufacturing sites at Goth
Machhi & Mirpur Mathelo maintain accounts related to cost of goods sold that is Manufacturing
Cost and related records of Plant & Machinery. All these activities are carried out on system
supported by computerization / manual operations.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Now oracle is working as legacy system for finance function, now SAP is the frontline system, and all the financial transactions are executed on real time basis. All these activities are executed by financial and controlling module of SAP.
Finance System of the OrganizationThe Company has an effective Finance Management System. Annual Business Plan is prepared
and implemented by the company. Adequate provision for dividend payments, disbursements for
operational needs, stores & spares, BMR and capital projects are made in the Business Plan.
The finance system of the Company is structured into four divisions. These divisions are further
divided in departments. Each department of the company prepares its annual budget and sends it
to divisional head. Divisions then prepare consolidated budgets and send to Head Office for
approval. Management Committee approves the business plan after thorough financial
evaluation. This Committee is chaired by the Chief Executive & Managing Director and includes
five members from the Management of the Company including the CE & MD.
The Board oversees the approval of annual Business Plan, cash flow projections and long term
plans, budgets along with variance analysis, significant internal audit issues, sale of material
investments and assets and transactions of extraordinary nature through duties delegated to the
Audit Committee.
Use of electronic data in decision makingDuring my study I learned that Management is a series of decision making processes and assert
that decision making is at the heart of executive activity in business. But decisions need to be
made fast, especially in the current context where the most precious and least manageable
commodity available to managers is time.
During my practical study at FFC, I assert that in sustainable development, everyone is a user
and provider of information considered in the broad sense. The need for information arises at all
levels, from that of senior decision makers at the top levels to the grass-roots and individual
levels. Accounting System of the FFC is based on ORACLE database, developed by the team of
System Analysts of IT department with the help of Professionals of Finance Department. Access
to the Accounting System is given to the employees according to their functions and
responsibilities.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
The Management has developed the accounting system and implemented the system to make
relevant information accessible in the form and at the time required to facilitate its use. The
purpose is to meet the organizational needs for Accounting Information as efficiently as possible.
The Company uses many accounting reports that affect the daily operations of almost every
department. All employees are paid and their pay slips are generated from accounting
information.
Many reports are generated from system to control daily business operations. For example:
MD Fax. This report is generated daily in the morning and delivered to all persons at top level.
This report lists information about the last day(s) activities, i.e. production, sale, inventory etc.
Examples of other Reports Generated by the Accounting System
Cash and Credit Sale Summaries Stock Movement Report
Collection Summary Dealer Ledger
Receipt and Payment Account Receivable Accounts
Age Analysis Report General Sales Tax Report
Payable Accounts Trial Balance, etc.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Ratio Analyseso Liquidity ratios
o Financial leverage / solvency ratios
o Coverage ratios
o Activity ratios
o Profitability ratios
o Market ratios
1-Liquidity RatiosCurrent Ratio
It shows the relationship between current assets and current liabilities of a concern.
Current Ratio = Current Assets / Current Liabilities
The current ratio for the year 2010 remains same as compared to year 2009. To pay current
liability of Rs.1 the company has current assets of Rs. 0.84. The standard of current ratio is 2, so
yet the company needs to consider this.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Year 2008 2009 2010
Current Assets 9709511 14917456 17,223,642
Current Liabilities 11823641 17854574 20,578,083
Current Ratio 0.82 0.84 0.84
Quick Ratio/Acid test RatioQuick Ratio = Current Assets - Inventory
Current Liabilities
Year 2008 2009 2010
Quick Assets 6417149 11776736 17011922
Current Liabilities 11823641 17854574 20,578,083
Quick Ratio 0.54 0.66 0.82
Findings: The quick ratio measures a company's ability to meet its short-term obligations with its
most liquid assets. Hence higher the ratio, better it is acid test & ratio of FFC is showing
improvement as compared to previous year, which is a good sign for company.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
2- Financial Leverage RatiosLong term debt to equity ratioIt indicates what proportion of equity and debt the company is using to finance its assets.
Long term Debt to Equity Ratio = Long term Debt / Total Equity
Year 2008 2009 2010
Long Term Debt 5378214 4578809 3,819,405
Equity 12285213 13082442 15,447,547
Long term debt to equity
ratio
0.44 0.35 0.24
This ratio shows the extent to which company is financed with long term debt. This ratio tells us
that creditor is providing 0.24 cents for each Rs.1 being provided by shareholder. Hence the
graph shows that the company payout it’s long term loans in 2010
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Long Term Debt to Total Assets RatioIndicates what proportion of the company’s assets is being financed through debt.
Long term Debt to Assets Ratio = Long term Debt / Total Assets
Year 2008 2009 2010
Long Term Debt 5378214 4578809 3,819,405
Total Assets 31918963 38551582 43,060,856
Long term debt to total
Assets
0.17 0.12 0.09
This ratio shows the percentage of the assets financed by long term debt. Thus 9% of the firm
assets are financed with debt, so company is using less of its long term debt in financing assets as
compared to previous year
.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Total Capitalization Ratio
The capitalization ratio measures the debt component of a company's capital structure, or
capitalization (i.e., the sum of long-term debt and shareholders' equity) to support a company's
operations and growth.
Year 2008 2009 2010
Long Term Debt 5378214 4578809 3,819,405
Total capitalization 17663427 17661251 19266952
Long term debt to total
Capitalization
0.3 0.26 0.19
This ratio shows the relative importance of long term debts to the long trend financing of the
firm. The company ratio is showing that the capital structure is mostly based on equity and the
ratio is also showing decreasing trend as compared to previous year.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
3-Coverage RatioThis ratio shows the ability of firm to meet its interest from earning before interest and tax.
This ratio shows the company ability to cover interest charges. Higher the ratio, beneficial it is
for company. And the ratio of FFC is showing the decreasing trend but yet it is very good.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Year 2008 2009 2010
EBIT 10736454 14002164 15,619,480
Interest Expense 695371 944947 1,086,741
Interest Coverage
Ratio
15.44 14.82 14.37
4-Activity RatiosTotal Asset TurnoverAsset turnover measure a firm’s efficiency at using its assets in generating sales or revenue.
Total Asset Turnover = Net Sales / Total Assets
Year 2008 2009 2010
Net Sales 30592806 36163174 44,874,359
Total Assets 31918963 38551582 43,060,856
Assets Turnover Ratio 0.96 0.94 1.04
This ratio shows the overall effectiveness of the firm in utilizing its assets to generate revenue.
The standard of the ratio is 2. So the company needs to improve this ratio.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Receivable Turnover Ratio:An accounting measure used to quantify a firm's effectiveness in collecting debts.
Year 2008 2009 2010
Net Credit Sales 30592806 36163174 44,874,359
Receivables 495929 256886 357,956
Receivables Turnover
Ratio
62 141 125.3
Average Collection
Period (365/RTR)
5.88 2.5 2.9
This ratio shows the quality of receivables and how successful the firm is in its collection.
Higher the ratio, more the efficient company is. FFC’s receivable turnover ratio showed
improvement (although slight downward trend is there) that is a good sign for the company.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Inventory turnover Ratio:A ratio showing how many times a company's inventory is sold and replaced over a period.
= Cost of Goods Sold/ Inventory
Year 2008 2009 2010
Cost of Goods Sold 18234692 20515044 25,310,406
Inventory 258094 144087 211,720
Inventory Turnover Ratio 71 142 119.5
Avg age of
Inventory(365/ITR)
5.14 2.6 3.05
A ratio showing how many times a company's inventory is sold and replaced over a period. The
graph shows inventory management of the company. FFC’s inventory turnover ratio is good but
again it is decreased in 2010 year that is a negative sign for the company.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
5-Profitability RatiosGross Profit MarginA ratio used to assess a firm's financial health by revealing the proportion of money left over
from revenues after accounting for the cost of goods sold.
Gross Profit Margin = Gross Profit / Sales*100
Year 2008 2009 2010
Gross Profit 12358114 15648130 19,563,953
Net Sales 30592806 36163174 44,874,359
Gross Profit Margin 40.40% 43.27% 43.5%
Gross profit ratio of this year is greater as compared to previous year that is 43.5%. It means
from one rupee of Sale Company is earning gross profit of Rs. 0.45 & that’s good for company.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Net Profit MarginNet Profit Margin = Net Profit / Sales*100
Year 2008 2009 2010
Net Profit 6525083 8823106 11,028,849
Net Sales 30592806 36163174 44,874,359
Net Profit Margin 21.33% 24.40% 24.5%
Net profit ratio is also higher as compared to previous year. This ratio shows that company is
earning Rs. 0.24 on it Rs. 1 sale that is increased from previous year thus indicates efficiency of
company.
Return on AssetsROA gives an idea as to how efficient management is at using its assets to generate earnings.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Return on Assets= Net Profit / Total Assets*100
Year 2008 2009 2010
Net Profit 6525083 8823106 11,028,849
Total Assets 31918963 38551582 43,060,856
Return on Assets 20.44% 22.89% 25.6%
ROA gives an idea as to how efficient management is at using its assets to generate earnings.
The higher the ROA ratio the better it is, because the company is earning more money on less
investment. And the company is showing increasing trend hence positive sign for the company.
Return on Equity
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Return on equity measures a corporation's profitability by revealing how much profit a company
generates with the money shareholders have invested.
=EAT/ Shareholders equity
Year 2008 2009 2010
Net Profit 6525083 8823106 11,028,849
Equity 12285213 13082442 15,447,547
Return on Equity 53.11% 67.44% 71.3%
Return on equity measures a company's profitability by revealing how much profit a company
generates with the money shareholders have invested. FFC’s ratio is increased from previous
year which is a good sign.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
6-Market RatiosEarning Per Share—EPSThe portion of a company's profit allocated to each outstanding share of common stock.
Year 2008 2009 2010
Net Profit after tax 6,525,083000 8823106000 11,028,849
Number of ordinary
shares
493474230 678527065 678527065
EPS 13.22 13 16.25
It shows the portion of a company's profit allocated to each outstanding share of common stock.
The company is showing increasing trend as compared to previous year.
2008 2009 20100
2
4
6
8
10
12
14
16
18
EPS
EPS
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Dividend per Share—DPS
DPS = Total Amount of Dividend / Number of Outstanding Shares
Year 2008 2009 2010
Total Amount of
Dividend
518, 1480,000 6717417900 10622306000
No. of Shares 493474230 678527065 678527065
DPS 10.50 9.90 15.64
This ratio shows that how much company is distributing to it’s shareholder from earning. This
ratio increased from year 2009. So it is a promising sign for investors
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Dividend Payout RatioThe percentage of earnings paid to shareholders in dividend.
Dividend Payout Ratio = Dividend per Share / Earning per Shares
Significant increase as compared to 2009 shows a very positive sign for investors.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Year 2008 2009 2010
DPS 10.50 9.90 15.64
EPS 13.22 13 16.25
Dividend Payout Ratio 79.43% 76.15% 96.2%
Ratios at GlanceRatios 2008 2009 2010
Liquidity Ratios:
Current Ratio 0.82 0.84 0.84
Acid Test Ratio 0.54 0.66 0.82
Solvency Ratios:
Long Term Debt to Equity 0.44 0.35 0.24
Long Term Debt to Assets 0.17 0.12 0.09
Long Term Debt to Capitalization 0.3 0.26 0.19
Coverage Ratio:
Interest Coverage Ratio 15.44 14.82 14.37
Activity Ratios:
Inventory Turnover Ratio 71 142 119.5
Average Age of Inventory (Days) 5.14 2.6 3.05
Total Assets Turnover Ratio 0.96 0.94 1.04
Receivable Turnover Ratio 62 141 125.3
Average Collection Period (Days) 5.88 2.5 2.9
Profitability:
Gross Profit Margin 40.40% 43.27% 43.5%
Net Profit Margin 21.33% 24.40% 24.5%
Return on Assets 20.44% 22.89% 25.6%
Return on Equity 53.11% 67.44% 71.3%
Market Ratios:
Earning per Share 13.22 13 16.25
Dividend per share 10.50 9.90 15.64
Dividend payout ratio 79.43% 76.15% 96.2
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
INDEX ANALYSISBalance Sheet
As at December 31, 2010
2010 2009
Percentage Percentage
Non Current
Assets
Property, plant and equipment 113.8 100
Goodwill 100 100
Long term investment 101.8 100
Long term loans and advances 134.8 100
Long term deposits and prepayments 143.3 100
Current
Assets
Stores, Spare parts & loose tools 81.4 100
Stock in trade 146.9 100
Trade debts 139.3 100
Loans and Advances 258.2 100
Deposits & prepayments 133.2 100
Other receivables 84.1 100
Short term investments 177.5 100
Cash & bank balances 30.8 100
Total Assets115.4 100
Equity & Liabilities
Share capital 100 100
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Capital reserves 100 100
Revenue reserves 138.5 100
Non-current liabilities
Long-term borrowings 83.4 100
Deferred taxation 105.9 100
Current Liabilities
Trade and other payables 120.13 100
Interest &mark-up accrued on loans 93.6 100
Short term borrowings 92.6 100
Current portion of long term borrowings 97.7 100
Taxation 188.6 100
Total equity and liabilities 115.4 100
Profit and Loss Account
For the year ending December 31, 2010
2010 2009
Percentage Percentage
Sales 124 100
Cost of sales 123.3 100
Gross profit 125 100
Distribution cost 124.2 100
Finance cost 115 100
Other expenses 108 100
Other Income 112.5 100
Net Profit before taxation 124.9 100
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Provision for taxation 120.42 100
Profit for Year 124.7 100
CommentsEquity & Long-term Debts
Share Capital increased in year 2010 due to issue of share bonus by the company. While the long
term debt of the company move downward over the last five years. This trend shows that
Company prefers equity financing over long-term debt financing.
Current Liabilities
There is a sharp increase in the current portion of long-term debts in first three. This increasing
trend is coupled with the decreasing trend in long-term debts. Company taxes also show an
upward movement. Company is retiring its long-term debts very quickly.
Fixed Assets
Property, Plant and Equipment has shown a increasing trend Long-term loans and advances also
showed an increasing trend on the asset side which mean Company is placing more fund in this
head.
Current Assets
Closing Inventory showed decrease in year 2010. The decrease in Inventory showed efficient
management of the inventory. Store, spares and tool are trending down. Short term investment
showed a sharp increase. Cash & bank balance also showed a sharp increase.
Comments on income statement
Sales are trending up while the cost of goods sold is also trending up. There is also increasing
trend in selling and distribution expenses, financial charges and other charges.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Over all profits are on increasing trend in size over the long period. The total turnover of the
company is increasing year after year
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
COMMON SIZE ANALYSISBalance Sheet as at December 31, 2010
ASSETS
2009 2010
Percentage Percentag
e
Non-Current Assets
Property, plant and equipment 36.30 37.00
Goodwill 4.07 3.64
Long term investment 20.04 18.27
Long term loans and advances 0.88 1.05
Long term deposits and prepayments 0.02 0.02
Current Assets
Stores, Spare parts & loose tools 7.77 5.66
Stock in trade 0.37 0.49
Trade debts 0.67 2.07
Loans and Advances 0.34 0.78
Deposits & prepayments 0.10 0.11
Other receivables 1.90 0.14
Short term investments 17.56 27.9
Cash & bank balances 9.98 2.76
Total Assets100 100
EQUITY AND LIABILITIES
2009 2010
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Percentage Percentage
Equity
Share capital 17.60 15.75
Capital reserves 0.42 0.37
Revenue reserves 15.92 19.74
Non-current liabilities
Long-term borrowings 11.88 8.86
Deferred taxation 7.87 7.46
Current Liabilities
Trade and other payables 20.76 22.3
Interest &mark-up accrued on loans 0.38 0.32
Short term borrowings 15.79 13.09
Current portion of long term borrowings 4.67 4.085
Taxation 4.71 4.08
Total equity and liabilities 100 100
Profit and Loss Account
2009 2010
Percentage Percentage
Sales
100
100
Cost of sales 56.73 56.4
Gross profit 43.27 43.5
Distribution cost 8.78 8.79
Finance cost 2.61 2.4
Other expenses 3.52 3.06
Other Income 7.75 7.02
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Net Profit before taxation 36.11 36.64
Provision for taxation 11.71 11.76
Profit for Year 24.40 24.5
General Commentary on Financial condition
During the period under review, net sales for the company increased an increase of 18%. Cost of
sales rose by 20% due to the hike in prices of raw materials, fuel and power and salaries and
wages resulting in a gross profit, an increase of 16% as compared to the corresponding period
last year.
Profit after tax increased by 12% .Finance cost decreased from Rs 520 million to Rs 494 million.
Total assets declined. The drop was mainly caused by the decline in short term investments and
cash and bank balances. There was a 50% decline in short term investments; major decline was
in the local currency term deposits with banks and FIs. Cash and bank balances declined. On the
liabilities side, there was a major decrease in short-term borrowings and trade and other
payables.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Financial Industry Analysis
Comparison with Key Competitor (Engro Fertilizer Limited)Ratios Engro FFC
Liquidity Ratios:
Current Ratio 0.828 0.84
Acid Test Ratio 0.772 0.82
Solvency Ratios:
Long Term Debt to Equity 4.593 0.24
Long Term Debt to Assets 0.639 0.09
Long Term Debt to Capitalization 0.8212 0.19
Coverage Ratio:
Interest Coverage Ratio 5.03 14.37
Activity Ratios:
Inventory Turnover Ratio 11.28 119.5
Total Assets Turnover Ratio 0.19 1.04
Receivable Turnover Ratio 7.28 125.3
Profitability:
Gross Profit Margin 46.48% 43.5%
Net Profit Margin 19.6% 24.5%
Return on Assets 3.803% 25.6%
Return on Equity 34.7% 71.3%
Market Ratios:
Earning per Share 3.48 16.25
Dividend per share 2.71 15.64
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Dividend payout ratio 71.2%% 96.2
Interpretation:Liquidity of FFC and Engro both are good. Solvency Ratio oF FFC is much greater than Engro.
Ability to pay interest is much superb of FFC. Very strong Activity Ratios shows stronger
management of FFC. The strong managerial effectiveness of FFC is also reflected in strong
profitability and Market Ratios
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Part 7
Training
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Part 7: Training
Distribution DepartmentDepartment: Distribution
Period 18 -19 July
No of Days 2
Supervisor Faisal Shehzad
Distribution Officer
Hierarchy of Distribution Department:
On the first day first of all I gave my joining as an internee in HR department. In the second step
I was given a schedule according to which I have to work in the organization. My first day was
in distribution department. There I reported to Mr Faisal Shahzad. He briefed me about the
various order and distribution reports that were used on daily basis. The reports showed date on
which order was placed, the day on which it was dispatched, medium, spoilage and was divided
on regional basis. All the distribution starts from their 3 production plants:
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
GGMM
SM(Distibution)
DE(Distribution) 2
Supporting Staff
Mirpur Mathelo
Goth Machi
Bin Qasim, Karachi.
He gave the very simple definition of distribution “To ship the product from one source to
another effectively”. He really emphasized the word “effective” and briefed that in FFC to be
effective distribution they mean that:
Distribution should be competitive.
No Duplication of Resources.
Time Management as per agreement with customer.
Practice of FIFO
Region Based.
Cost Effective.
Effective Coordination.
Minimum Delay
Minimum Warehouse Cost.
Minimum Damages
The order is generated from agencies in respective regions and then it comes to Marketing head
office Lahore. Here a practice called “pooling” is done. The distribution executives here decide
to which production plant the order should be directed for proper execution. In this step usually
two things are considered while directing the order to a particular plant:
Time Management
Cost effectiveness
In case of order of Sona Granular and DAP the pooling is quite as only Bin Qasim plant is
manufacturing them so all the orders are directly directed to Bin Qasim plant. But in case of
orders of Sona Prilled the distribution section has to choose among Goth Machi and Mirpur
Mathelo Plant.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Then Mr Faisal discussed “Upcoming distribution plans and challenges” Some of the main
points are:
Challenges: Heavy Reliance on road transport
Law and order challenges such as Dacoits
Bottle Neck of Trucks at Mirpur Mathelo
Competitors (Fatima and Engro) located in radius of 65 Km
Congestion at Karachi Terminal
Increasing prices of high speed diesel
Operating Cost
Axle Load
Plans: Competitive freight rate
Better Facilities to truckers
Minimize Loading time
Minimize spoilage
Transit insurance
Then I studied the daily morning reports. These reports showed details:
Daily Production (current and cumulative)
Daily shipments to respective regions (current and cumulative)
Shipments to customers and warehouses
Region Wise Inventory
Variance
Daily shortage/excess
Procedure of assigning new dealership in FFC:Following documents are required for assigning dealership
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
CNIC
NADRA verification
Application for agency
Dealer selection form
Bank certificate
Special Adhesive Stamp of Rs 100.
Criteria for assigning new dealership in FFC: Credibility of the applicant
Location of market
Potential turnover
Commitment
Capital to be invested
Reasonable business sense
Networking
Potential improvement in market share
Criteria used for setting sales target in FFC: Past Records
Industry sales
Market share
Monthly break ups
Cropping pattern
Awareness of Brand among farmer community
Strategies used by FFC for achieving the sales target (At regional level): Effective tour planning
Tie- in strategy
Information dissemination
Assigning quotas for dealers
Dealer network
Order generation
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Avoiding long lead time
Strategies used by FFC for brand positioning (At regional level): Sponsoring Agri based events
Free testing of soil samples
Assistance to farmers in cropping problems
Objectives: These are the following objectives of the distribution system.
Ship out entire production of FFC & FFBL Plants and imported fertilizers in a cost
effective manner. (3.4 million mt. approximately)
Satisfying 3580 dealers and 1632 direct customers and feeding 169 warehouses.
Truck generation for 1556 sales points
Plan & undertake self imports/ export and ensure prompt handling, quality packing,
correct weight, timely delivery and documentation.
Monitor packing availability and arrange safe storage of surplus production during lean
months.
Follow up of product quality complaints.
Co ordinate with plant management to ensure smooth operations
Maintain liaison with Pakistan Railway, NLC, Port Authorities, Customs, Export
Promotion, Bureau and foreign manufacturers and suppliers.
Transportation Arrangements private trucking contractors
national logistic cell (nlc)
pakistan railways
Customers served:
Dealers 3580
Direct Customers 1632
Total 5212
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Warehousing DepartmentDepartment: Warehousing
Period 20 July
No of Days 1
Supervisor Shehzad Anwar Butt
Deputy Executive (Warehousing)
Hierarchy of Warehousing Department
The warehousing department is involved in completing the formality For hiring And firing of
warehouses (on need basis), appointment of handling contractors, watch and ward contractors.
The record of inventories is maintained and physical inspection of the warehouse and product are
carried out to ensure safety and security. This department works in collaboration with
distribution department.
Functions of warehousing department Coordinating of warehouse department with regions regarding warehouse selection,
training of supervisors, planning capacity of warehouses
To conduct inspections of the warehouses on planned and surprise basis
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
GGMM
SM(Distibution)
DE(Distribution) 1
Supporting Staff
Each warehouse is inspected around 17 times a year.
Warehousing department is considered with processing of
o Lease agreements
o Watch and ward agreements
o Handling agreements
o Watch and ward bills
Conduct the training of warehouse supervisors.
Preparing the operational, capital and revenue budgets on yearly basis.
Formulating warehouse plans.
Preparing weekly capacity reports.
Types of warehousesWarehouse Type Quantity Capacity
Strategic warehouse 02 20000
Permanent 61 168700
Temporary 84 89500
TOTAL 147 278200
Strategic warehousesThere are two strategic warehouses in the country, one is located at Chiniot and other is located
at Yousufwala. The total capacity of the strategic warehouses is 20000 MT. The purpose of these
two warehouses is to provide the product in bulk in major areas because both covered the huge
area.
Permanent warehousesThere are sixty one warehouses in the country, located at different places. The total capacity of
these warehouses is 168700 MT.
Temporary warehouses / purely temporary warehouses
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
There re one hundred and six temporary warehouses in the country, located at different places.
The total capacity of these warehouses is 154900 MT. The purpose of these warehouses is only
to control the seasonal demand. Because in season the demand of the product is very high and
the product must be reached at the end user in short time as possible and there is impossible to
store such a huge quantity at the plants.
Zone-wise Warehouses and Capacity
ZONE REGIONS WAREHOUSES CAPACITY (MT)
North 5 55 114000
Central 5 48 99800
South 4 41 64400
TOTAL 14 144 278200
Agri Services Department
Department: Agri. Services
Period 21 July
No of Days 1
Supervisor Riaz Ahmed Ghuman
Manger Marketing (Agri Services)
Hierarchy of Agri services Department
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
GGMM
SM(AS)
DE(AS) 2
Supporting Staff
Fauji Fertilizer Company Limited has been providing Agricultural Advisory Services to the
farming community throughout Pakistan since 1981, for increasing the agriculture production in
general and the farmers’ economic returns in particular. FFC in pursuit of its national
commitment and moral obligation maintains regular contact with farmers and Agricultural
Institutions to ensure constant and efficient transfer of latest technology.
The company is providing quality farm advisory services all over the country through its 5 Farm
Advisory Centers and 14 Regional Technical Services Officers. Farm Advisory Centers are
located at Mandi Bahauddin, Ghakar, Bahawalnagar, Muzaffargarh and Hala. Each centre has a
team of five Agricultural Experts, providing multifarious advisory services through crop
demonstrations, field days, farmer meetings, village meetings, crop seminars, farm visits and
group discussions. All the centers are fully equipped with modern sophisticated computerized
Soil & Water Testing Laboratories and high-tech extension equipment. Moreover, FFC has also
established a micronutrient and plant tissue analysis laboratory at Farm Advisory Centre,
Ghakhar having Atomic Absorption Spectrophotometer and other analytical instruments. Soil
Testing is a valuable tool to propagate appropriate and balanced use of chemical fertilizers and to
identify soil problems. Soil/water samples are collected from farmers’ fields and analyzed in the
laboratories. Fertilizer recommendations are developed on the basis of soil analysis and
recommendation reports are delivered to the growers for proper and balanced fertilizer use. The
soil/water testing and micronutrient analysis facility is offered free of cost. Besides these five
farm advisory centers, we have 14 Technical Services Officers based at 14 Regional Offices of
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
FFC spread all over the country extending these services in their respective areas. To further
strengthen advisory services and facilitate farmers, FFC also publish crop, vegetable, orchard
brochures, agro-grams, posters and pamphlets containing latest information regarding production
technologies of crops, and orchards grown in Pakistan. For a stronger direct link and timely
guidance of farmers, FFC publish a quarterly Urdu and Sindhi Newsletter “Zari Report”
containing season specific information regarding crops, fruits, vegetables, improved agronomic
practices and articles on agricultural issues. Following is the list of crop brochures available with
FFC
Wheat
Brochure
Cotton
Brochure
Sugarcane
Brochure
Rice
Brochure
Maize
Brochure
Oil Seed
Brochure
Potato
Brochure
Vegetable
Brochure
Mango
Brochure
Citrus
Brochure
Banana
Brochure
Apple
Brochure
Guava
Brochure
Date Palm
Brochure
Orchard Cultivation Brochure
Boron
Brochure
Salt-affected Soils Brochure
To improve the fertilizer use efficiency and to obtain optimum crop yields, a “Fertilizer Guide
Book” and “Fertilizer Recommendation Book” has also been published containing
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
comprehensive information on various fertilizers available in Pakistan, their application methods
and their economic use.
FFC has also adopted the pragmatic approach of telecasting crop documentaries on PTV before
the onset of sowing season of major crops. In these documentaries all the components of crop
production are covered with sufficient elaboration. Cotton, wheat, sugarcane and rice
documentaries.
Agri service department is providing support function to sales..
Objectives Enhancing crop yield/overall crop production
Promotion of balanced fertilizer use
Farmer education /training
Dissemination of latest and complete package of technology
Focus on increasing farmers income
Counter fertilizer misconception
Supplement government effort for agricultural
Functions Increase and focus on farm management expertise
Establish proper linkage sales and technical services
Professional development on personnel
Collaborative research
Other Department Activities Weekly water situation report at Mangla and Terbala dam
Water availability during Rabi / Kharif season
Weekly co ordination meetings
Annual stewardship report
Annual budget preparation
Domestic demand for crop report
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Completion of monthly report received from 14 regions, 5 FAC and the department
Facilitating field officers
Facilitating the purchase of technical items
Monitoring activities of FAC
Internal structure of FAC
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
FAC Manager
Reg TSO
Agronomist Chemist Chemist Ext Extensionist
Finance DepartmentDepartment: Finance
Period 22- 28 July
No of Days 5
Supervisor Khalid Javed
Manager
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Order Processing SystemOrder processing system (OPS) is used to control shipments from plants to sale districts or
warehouses and activities related to shipments. The activities include:
Despatch Priorities
Management of freight cost, gross rates and discounts
Track of customer order pending with Haulage Contractors (HC)
Following is the brief information regarding order processing through road and Pakistan
Railways (PR).
Order Processing Through Road:Order processing through rail is carried out in the following way:
The customer provides CO to the sales officer along with financial instrument.
Sale officer provides this information to the regional manger (RM) or he directly sends
the CO to the marketing office.
Regions send COs along with financial instruments to the finance department in the
marketing division and if the order is from the plant then RM sends a copy of the CO to
the plant as well.
Collection section punches the COs.
One copy of printed customer orders is sent to Karachi.
For further processing Karachi office downloads the punched customer orders. (These
customer orders have been punched in Lahore)
Karachi office verifies the customer orders and does the necessary actions if there is any
objection in COs.
Distribution department prepares the despatch plan on the basis of pre-planned criteria so
that each region could have pre-planned percentage of the products.
Allocation plan is prepared to allocate the customer orders to the contractors.
Finance section generates the invoices/advices.
Allocation plan leads to the generation of the daily shipment plan (DSP).
DSP is sent to the bagging section for cross checking purpose.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Haulage contractors load the product in their vehicles by showing the bilty for loading at
plant.
Invoices are generated in case of customer orders and advices are generated in case of warehouse
orders.
The vehicles are loaded according to the plan after verification process.
Bagging section punch invoices into the system to ensure the shipment.
Order Processing Through Pakistan Railway: The customer provides CO to the sales officer along with financial instrument.
The orders are then punched into the system by the finance section.
A temporary order is made for the shipment of the consignment from plant to Dhabeji
warehouse1.
Despatch plan is prepared for TSO that shows that how much quantity to be despatched
to Dhabeji warehouse and at this stage allocation plan is also prepared accordingly.
Allocation plan is prepared according to the Dispatch plan in which order quantities are
assigned to different contractors.
Daily shipment plan is generated on the basis of allocation plan and it is sent to the
bagging section for cross checking purpose with the haulage contractors.
Haulage contractors send their vehicles along with bilty for loading at plant.
After allocation to the contractors, Dispatch Note (DN) is generated by the system that
helps the transfer of the product from plant to Dhabeji warehouse.
Haulage contractor issues a bilty slip to his driver and the driver take this slip at the
bagging section where it is compared with the Dispatch note. After successful
verification the vehicle is loaded with the product.
The amount of the product and date is written down on the DN and also punched into the
system.
After receiving the product bags from the vehicles, Pakistan Railway issues a receipt
called Railway Receipt (RR). RR(s) are used for the billing process by Pakistan Railway
for shifting the consignment from Karachi to respective regions.
1
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
A copy of RR is also provided to the contractors and the contractors claim their shipping
charges on the basis of RR.
RR(s) are then punched into the system against respective customer orders.
Invoices are generated and the copies of the invoices are sent to the respective persons.
The customers receive their orders from the railway station after clearing all the dues.
GENERAL ACCOUNTING SYSTEM
Functional Workflow
General Accounting System
Data feeding
ValidateVoucher
Generation
ReceiptVoucher
BankVoucher
JournalVoucher
PaymentOrder
Validate & Finalize
Tax Ledger
GeneralLedger
CostCenterLedger
Petty CashBook
Sub-sidiaryLedger
BankBook
Govt. TaxReports
Parties TaxCertificates
Imprest SheetsPayment OrdersExpense Claim
Phone BillsUtility BillsInvoices
Other ReceiptsDD Receipts
Funds TransferTax Payments
DTRAssets
W&W ContractsGodown Rent Contracts
Rent Contracts
W&W BillsGodown Rent Bills
Rent Bills
Data feeding
Validate
Monthly BillGeneration & Pre-Payments
Long-term PaymentsActualization
Senior finance manager (SFM) is the head of the finance department. SFM is responsible to
report the managing director of the company about the performance of the finance department.
He is responsible of all the activities of the department. There is one senior finance executive of
general accounting and one finance officer of the sales accounting. Both are working under the
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
supervision of the senior finance manager. SFE of general accounting monitors all the activities
related only to the general accounting and finance officer of sales accounting monitors all the
activities related to the sales accounting.
There are four person are working under the supervision of the senior finance executive of the
sales accounting.
Senior Finance Executive (Disbursment) SFE (D)
Finance Executive (Disbursment) FE (D)
Finance Executive (Fixed Assets) FE (FA)
Finance Officer (Financial Reporting) FO (FR)
Senior Finance Executive (Disbursment) SFE (D)
There are five accountants and 3 Senior Finance Assistants are attached with the SFE (D).
SFE (D) deals the following heads.
Disbursement
Salary Staff
Banks
Disbursement:Under this head the following payments are included
Payment to suppliers
Payment to Contractor
Payment to Government Agencies
Payment to Tax department
Lease/Rent of the buildings
Services of the watch and ward
Handling contractor for loading and unloading
Payment on per page
Basic as on agreement
Hospitals/ Doctors as on panels
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Banks:
FFC used the following banks.
Habib bank limited
Muslim Commercial bank limited
Union bank limited
Bank Al-flah
In bank dealing the company mainly used the two heads.
Collection Account for deposits
Imp rest Account for payments
General Accounting System (Functional Overview)General Accounting System has the followings artifacts:
Bank Voucher (BV)
Journal Voucher (JV)
Petty Cash Voucher (PCV)
Receipt Voucher (RV)
Bank Voucher (BV)This voucher is used to represent the expenditure details along with cost controller’s (also called
functionaries) detail.
Journal Voucher (JV)Journal vouchers are used for many purposes since the name suggests that these can be used for
any purpose regarding crediting or debiting an account. JV(s) are also used to make
adjustments/corrections in amount’s code/classification in the bank payments vouchers.
Petty Cash Voucher (PCV)This voucher is prepared to adjust all the official expenses under a certain limit (e.g. 1500 Rs).
This voucher is normally used to pay the employees bills/claims etc under this amount.
Receipt Voucher (RV)
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
This voucher is used to receive any type of amount on behalf of FFCL. It can be used to receive
the transfer of funds from HO or funds transfer from one bank to another bank. The amount can
be an employee’s telephone bill that is debited from the employee’s account.
Purchase Requisition (PR)Purchase requisition is prepared in case the staff wants to purchase something they need. It
covers all the official expenses. In case a department needs something to purchase, a PR is
prepared and after the verification from the respective authorities, it is forwarded to the
procurement department that processes the PR.
Trial BalanceTrial balance is a monthly report showing the details of expenses during the month. It covers all
the marketing activities. It contains details about receivables, credited and debited amount
information. It is effectively used to represent the progress on the basis of the information
represented within. It is prepared monthly for MD and quarterly for the board of directors.
Cost Controllers/CentersAny department or section that can utilize an amount is called cost controller/center. Each cost
controller/center has been assigned a code. Following figure shows the list of all the cost
controllers/centers codes used:
Sales Accounting Sales accounting deals the following heads:
Bank guarantee
Receivables
Sales collection
Objectives Establishment of Dealer Network
Efficient Collection Procedure
Recording Of Sales Data
Control Of Receivables
Product Inventory Monitoring
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Sales Accounting System
Docs. Insertion into Respective Tables
CO
DDSGeneration
SMRCRVJVDCS CSTMR CDS Invoice AdviceCR
Approval
DealerBalances
MIS/Misc. Reports Posting Routines
BankDaily
CollectionReports
SalesReports
Credit SalesReports
TaxReports
WarehouseAccounting
Reports
ReceivableReports
Media
SALES ACCOUNTING SYSTEM
Bank guaranteeCredit sale of the company is only 6% to 7% of the total sale. The company is still discouraging
the credit sale because the company has an option of 100% cash sale. There are two types of the
bank guarantees.
Single bank guarantee
Revolving bank guarantee
Single bank guarantee This guarantee is used by the ginners, single means the bank guarantee is used only one time.
Revolving bank guarantee:This guarantee is used by the dealers and revolving means the dealer can use it more than one
time.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Unsecured SaleThe sale against which there is no security is required. The company discourage the unsecured
sale if accept only with the recommendation of the top management. For example Fauji cane
farming.
Receivables
Approximately 95% sale of the company consists on cash and remaining 5% is consisting on the
following heads that leads to the account receivable.
Credit sale against Bang Guarantee
Mistakes in DD or PO
Change in amount
Adjustment in another order
Sales collection
There are two heads of sales collection.
Cash Sale
Credit Sale
Ways of collectionBank to Bank
That is mostly used in credit sale for that purpose CRV (Collection Receipt Voucher) is
used. CRV is the surety that the company’s bank has received the amount on behalf of
the company to the buyer’s bank.
Directly Debit or Credit
According to this way company’s bank directly credited the amount means received
amount to dealer on behalf of the company and directly debit the account means the bank
directly transfer the amount to the head office of the company.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
DCS (Daily Collection Statement)
DD (Demand Drafts)
PO (Payment Orders)
CDS (Cash Deposit Slip)
Sales Accounting (Workflow)Following documents are used during the customer order processing.
Customer Order (CO)Whenever an order is placed for a customer, a Customer Order (CO) is prepared containing
customer information and shipment information. CO is the basis of Sales Accounting System.
For every product of FFCL, e.g. Sona (G) and Sona (P), there will be a separate CO. Each
customer order has a customer code.
Financial InstrumentsFollowing are the financial instruments using which the customers can pay their payments to
FFCL.
DD (Demand Draft)
PO (Payment Orders)
TC (Traveler Cheques)
CDSCash Deposit Slip)
Draft in Transit (DIT)
The amount that is banked up after the completion of a particular month is identified as draft in
transit (DIT). Since bank book close on 30 or 31 of a month, but sales for the last month is
received up to the first week of the current month, so to identity this amount, it is referred as
DIT.
Collection Receipt Voucher (CRV)
Collection Receipt Voucher is used to manage the secure payments (e.g. Bank guarantees RR
payments and Miscellaneous). It is prepared daily. It is used to credit and debit from the dealer’s
account. It is also used for remittance to head office.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Railway Receipt (RR)
If there is a mistake on Demand Draft (DD), e.g. signature is missing, wrong figure has been
entered, wrong date has been provided or drawn bank information is wrong etc. If there is any
such case the bank provides Returned DD.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Administration Department Department: Administration
Period 29July
No of Days 1
Supervisor Maj Muhammad kamal Pasha (Retd)
Assistant Manager Administration
Hierarchy of Administration Department
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
General Manager Marketing
Admistration Manager
Admistration Executive
Manager LLA
The administration department deals with three main functions:
Its major role is to support the market division, 3 sale zones, 14 regions and FACs, 3
distribution setups and 2 guest houses.
Aim: To acquaint with the functioning of Administration Department of Marketing Division.
General Administration:In General Administration Department Head assisted by Unit Managers and Section Heads
implement policies issued by Head Office
Major Functions:1. Provision and maintenance of various types of vehicles
2. Ensure availability of utilities like electricity, gas and photocopiers etc
3. Undertake protocol duties for example reception and accommodation
4. Provision of uniforms for example uniforms of drivers
5. Ensure proper maintenance and renovation of the office premises & guest houses
6. Take disciplinary action under the rules, where necessary
7. Disposal of unserviceable Company Assets
Maintenance of Transport:Different types of vehicles held by the Marketing Division as shown on the view foil
Company Assigned Cars
Company Assisted Cars
Company Maintained Transport
Communication:
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Admin
General Admin HR Procurement Units
Effective Communication network is established with a view to ensure smooth operations
and coordination between various operational departments and the Head Office.
Security:Due to prevailing law and order situation, FFC Admin has been extra vigilant at Lahore. All
the visitors are therefore, politely but firmly checked and proper record is maintained at
reception located at Ground Floor. It is endeavored not to allow any unauthorized vehicle to
enter the basement where own cars are parked.
Accommodation:Accommodation is hired for the offices and guest house. This include:-
1. Marketing Division Lahore Office
2. 14 X Regional Offices. (Lahore, Peshawar, Faisalabad, Sahiwal, D I Khan, Vehari,
Bahawalpur, D G Khan, Rahim Yar Khan, Hyderabad, Sukkur, Nawabshah and
Quetta)
3. Office accommodation for Central and South Zones at Multan and Karachi
4. Office accommodation for 5 x FACs (Kasur, Jhang, D.I.Khan, Vehari and Mirpur
Khas)
5. 2 x houses for use as Guest Houses at Lahore
Guest Houses:Company Guest House is registered in two rented bunglows at 13 & 14 Rose Lane, Sarfraz
Rafiqui Road, Lahore Cantt
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Human Resource DepartmentDepartment: Human Resource
Period 01 August
No of Days 1
Supervisor Qamar Sb
Manager HR
The FFC Management, acknowledging the importance of human resources has always placed
personnel management at the top of its priority list. The Human Resources Department,
therefore, right from the inception of the Company has played a vital role in steering the
Company through all its phases, operations and progress.
The functions of Human Resources Department vis-a-vis personnel management and human
resources development are going side by side and it is due to the progressive approach and
dynamic philosophy of the management that Personnel Management remains abreast with the
latest style of management ensuring high level of motivation and satisfaction of the work force
under varied situations.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
GGMM
SE(HR)
Senior HR Officer 2
Personnel policies are kept updated and are periodically modified to respond to the latest socio-
economic changes and market trends of the country.
Hiring quality manpower, keeping them happy, satisfied and motivated are the pillars of the
Human Resources Department; justice, fair play and merit oriented treatment are some of the
ingredients of processing cases by the HRD.For Human Resource development, another aspect
which receives its due share is training. The employees are exposed to various kinds of cross
training, technical courses, management courses, workshops and seminars both at home and
abroad. At Plant site, the Company has a Technical Training Centre, which is unique, and the
only centre in Asia having a true replica of the Plant for providing realistic training as far as
possible, to the employees.Employees' welfare has all along received due consideration by the
Management. A number of agreements have been signed with CBA
Workers Union, resulting in handsome remuneration packages to employees. The company,
since its inception, has undertaken five salary revisions for Management employees, to remain
amongst the top paying organizations of the country. It is due to the sheer sincerity, welfare
oriented policies and concern for every single employee that there has never been any strike, lock
out or go slow in FFC.
Human resources department of the marketing division is responsible for the employees related
to marketing division. Maintaining their attendance and payroll of the staff while officers and
executives get their pay directly from head office.
Functions
Work out warehouse supervisor visor’s requirements in consultation with regional manager and
arrange recruitment and transfer activities according to head office instructions.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
1. Maintain up to date personal records, statistics including leave records , relating to
management and non- management employees.
2. Interpret company policy and provision of necessary ruling where required.
Handling cases relating to following subjects Employment/appointment of non management employees. Temporary / contract / daily
wages according to authorization.
Promotion of non management employees
Pay and allowances of non management employees.
Leaves (annual, causal, special, sick) are managed for all employees.
Transfer claims of all employees.
House/rent allowances advances
Also the House building loans
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Labor and Legal Affairs Department (LLA)Department: LLA
Period 04 August
No of Days 1
Supervisor Lt Col (Redt) Imran Zahoor
Manager LLA
The LLA department in organization is formed under the IRQ 69 [industrial relation ordination]
of Punjab labor laws act and is under the approval of Management & joint Labor Department of
Punjab Govt .IR basically deals with the Labor laws implication in an organization and has to
negotiate legislatively with the CBA certified labor union at the office .The criterion for
formation of IR department is a office having at least 50 employees and its provisions given in
the Punjab as well as GOP labor laws. The IR department not only negotiates with the labor
unions but also responsible handling with the labor.
One of the functions of IR department at FFC is to tackle with all types of court problems. There
are labor courts at regional level .At present there are 24 courts in Pakistan. Any employee who
may have a complaint about the management can go to the court so IR department representative
follow the case Major Activities
Leave records of workers
Appointment records
Record of upgrading
Annual increment record
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Manager LLA
Supporting Staff
Vertical performance appraisal records
Procurement DepartmentDepartment: Procurement
Period 04 August
No of Days 1
Supervisor Muhammad Naeem
Asst. Executive Procurement
Procurement department at head office is responsible for the purchases The Purchasing section
ensures that the FFC’s assets are protected, acquired and disposed of according to state and local
requirements. Some of the main functions of this section are the consolidation of supply
acquisition to maximize cost savings and the drafting of contracts and requests for proposals to
ensure that the company is protected and aggressive in the construction and maintenance of
infrastructure and services.
GOALS “To procure quality goods at the most economical and competitive rate”
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
GGMM
SE (Proc)
Sr. Sub Eng
FUNCTIONS Quality, Economical and timely procurement of items /spares for departments and plants
ensuring complete backup support /after sales services
Price enquiry of different items to estimate the price so that the budgeted amount may be
endorsed on the PR before initiation
Disposal of obsolete /surplus/scrap material
Continuous updating of reliable vendors list for both plants and marketing division
PROCEDURES INVOLVED IN PROCUREMENT STEPS
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Advertisement and Sales Promotion DepartmentDepartment: A & SP
Period 2- 3August
No of Days 2
Supervisor Mrs. Nabila
Objectives To create, augment and maintain the demand of FFBL and FFCL products
To enhance and sustain brand image and corporate image
Improve company visibility in the mind of consumers
To safe guard company logo
To strengthen brand loyalty In every company, the role of the sales promotion is very important
because it has a great impact on the sale volume. On world level all the big companies used the
sales promotion as a tool to increase their sales volume. Similarly FFCL also used the sales
promotion tools or techniques in order to increase the sale but due to the market leader in the
fertilizer sector the weight age of the sales promotion is sufficient but no huge. According to the
hierarchy of the sales promotion, there are two sales promotion officers each is having assistance
of two staff members, are reporting to senior executive of sales and advertisement. SE reports to
GM (MS). In FFC there is a coordination and cooperative environment. So, First, the SE of
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
General Manager Marketing
SE (A& SP)
Sales Promotion Officer 3
Planning determines the sales for the running period which is achievable and measurable then SE
of sales and advertisement makes promotion to achieve the task. In FFC sales promotion is also
working in very well defined manners. But the way of marketing is different sector, so, it is
required by the firm to much emphasize on the marketing.
ADVERTISING & SALES PROMOTION TOOLS Advertising and Sales Promotion contributed in maintaining the corporate and brand
image of the Company. During the year, electronic, print and outdoor media were
efficiently utilized to provide support to the field. Company visibility through display of
billboards and jumbo hoardings was ensured. Banners and display materials were made
for various agronomic activities in the field.
TECHNICAL SERVICES Technical services department was very active and assist FFC's field sales apparatus in
achieving the company objectives in addition to imparting the necessary agronomic
education to the farmers. The following activities are conducted Advertising & Sales
Promotion
Ads were placed in regional/ national newspapers and magazines.
Damaged dealer shop boards are replaced at company's expense, 136 plastic pole signs
and 600 dealer shop boards replaced as per the demand from the regions in order to
improve the company's image & visibility in 2009
FFC Wall Calendar-2009 received best six sheet wall calendar award in the 40th
corporate Printing & Designing Exhibition 2009, organized by National Council of
Culture & Arts.
Electronic MediaRADIO was extensively used to promote Sona brand owing to its effective reach and
being economical. Separate spots of Sona P & G, Sona DAP, FFC SOP and Sona Boron are
broadcasted from 10 stations of Pakistan Broadcasting Corporation (PBC) in Punjabi, Sindhi and
Pushto languages. The duration of these spots ranged between 22-35 seconds. The release of
spots is done on fortnightly basis based on market conditions, availability of product and the
seasonality factor. Pakistan Broadcasting Corporation (PBC) provided the company a discount of
30% on broadcast of radio spots in 2009
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
TELEVISIONFFC in line with cost efficient electronic media strategy and short supply market situation
during the year did not opt for regular advertisement on TV. However, crop documentaries on
wheat, sugarcane, rice and cotton are telecasted on PTV Home prior to the onset of their
respective seasons. These documentaries covered all the steps from land preparation to
harvesting.
A Documentary on the advisory services being offered to the farming community by
FFC's Technical Services Department and Farm Advisory Centers are produced. New
documentary on cotton is also produced.
CCTVThe network of closed circuit television (CCTV) was regularly utilized during the year.
FFC commercials are telecasted on CCTV at 7 railway stations & 26 AC Parlour trains (Lahore,
Multan, Faisalabad, Hyderabad, Karachi, Rawalpindi & Peshawar), 4 airports (Islamabad,
Multan, Faisalabad & Lahore) and in Daewoo coaches & waiting lounges on all routes.
PRINT MEDIATo promote corporate and brand image, print media is effectively used. Release of
corporate and brand ads to national / regional newspapers, agriculture related magazines and to
other publications is processed.
During 2010, a total of 50 ads were released comprising 04 ads in national news papers,
12 in regional newspapers, 31 in magazines and 3 in other publications.
OUTDOOR MEDIATo give a new look to the jumbo hoardings redesigning is done and during the year the
old design of thirty jumbo hoardings are replaced with the new design. In addition, relocation
and repair isalso done wherever necessary. Display of thirty three billboards is monitored to
ensure company visibility in the field and display of ads at Lahore, Karachi, Islamabad and RY
Khan airports continued for corporate image projection.
AMCON Display material and stationery for Annual Marketing Conference is developed and
printed.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
POINT OF PURCHASE MATERIAL
To disseminate latest information to farmers, booklets on major crops, fruits, vegetables
and salt effected soils are printed. In addition, booklets on Sona Boron are printed to promote its
use.
Agri-newsletters were published on quarterly basis.
INSTITUTIONAL ADVERTISINGTo project the corporate image, the company sponsored various events as under:
International Conference on "Sustainable Food Grain Production: Challenges and
Opportunities" arranged by Pakistan Society of Agronomy
Dawn Spelling Bee Hospitality Contest for Schools of Upper Sindh
Annual dinner of Marketing Association of Pakistan-Lahore chapter
15th Allama Iqbal Open Golf Tournament organized by Garrison Golf Club, Sialkot
Cricket tournament organized by Lion Sports Club for the Deaf
Cricket tournament organized by Bahawalpur Cricket Club of the Blind
SALES PROMOTION ITEMSCalendars, diaries, planners, table calendars and eid cards are distributed for GR/PR
purposes.
Advertising and Sales Promotion work in coordination with Public Relations Department
for selection of paintings, designing and layout of the corporate/dealer calendar, table calendar,
planner and diaries.
Corporate giveaways comprising various leather items are made. Telephone sets for
dealers as giveaways are also produced.
AWARDSTo acknowledge long association of dealers with the company, awards for the dealers
who completed 10 and 20 years of business relationship are made and distributed at dealer
training programs.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Corporate Social Responsibility Department (CSR)Department: CSR
Period 05 August
No of Days 1
Supervisor Hamid Abbas
Junior Executive (CSR)
CSR is a marketing Approach that is used by FFC to implement the positive image of the
company as well as for the welfare of the nation as well the community in which the company is
operating
CSR Objectives
Company’s obligations of paying back to the society from which it derives its
economic gains.
Address stakeholder concerns and invest in the communities in the vicinity of our
fertilizer plants.
Empower the small and medium farmers all over Pakistan
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
GGMM
SM(CSR)
JE(CSR)
Supporting Staff
Incorporating UNGC Principles in our governance.
Contribute in achievement of UN Millennium Development Goals.
Current CSR Interventions
As most of the sustainability conscious organizations around the world do, FFC is playing its part actively in this direction. Being the brand leader in fertilizer sector with the biggest market share and counted among one of the leading corporate entity in Pakistan, FFC understands its obligation in nation building and well being of deprived communities around the plant sites. Under the charter of FFC CSR interventions, following sectors have been made part of the program
Education
Health Care
Environment
Poverty Alleviation
Sports
Annual Fun Fares
Relief & Rehab for flood affectees
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Information technology (IT) DepartmentDepartment: IT
Period 08 August
No of Days 1
Supervisor Mr Sherazi
Information Technology unit was properly setup in FFC Marketing division Lahore. IT unit is
one of the most important departments working at marketing division Lahore. The
Unit has to play a leading role in the marketing division in order to enable all the department to
perform all their functions effectively and efficiently .It enables the management to make timely
decisions.
OBJECTIVES OF IT UNITS To meet computing needs of all the departments of all the departments of the marketing
divisions.
To design and develop, efficient, effective and user friendly information systems
To provide the maintenance services and proper updating of all these systems
To properly cope with the security and ethical challenges related to information
technology and information system
To design proper feedback and control procedures toward achievement of its goals.
SYSTEMS DEVELOPED BY I.T UNITS Sales accounting system
General accounting system
Order processing system
Regional information system
Sales promotion system
Distribution management system
Procurement system
Human resource system
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Now after the formation of SAP, most of the functions mentioned, have been obsolete due to standards approach of SAP. Now IT is mainly restricted to maintenance of hardware.
SAP DepartmentDepartment: SAP
Period 09-10 August
No of Days 2
Supervisor Mr Majid
SAP Officer
To implement SAP is the vision of the top management of the company. Consultancy and
support is provided by ABACUS. It is one the most effective ERP system. The module that deals
with marketing operations is managed by marketing team, which is formulated by training the
marketing persons from different sections. One of main strategic advantage of SAP is integration
of all the parts of organization. SAP is replacing oracle in FFC. At present both the system are
working simultaneously but from October 2010 only SAP will work. With implementation of
SAP all the transaction are recorded on real time basis with proper authorization.
1972 German SAP architecture has evolved from R/S up to 4.6 C R/S Enterprise.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
GGMM
SM(SAP)
SAP Officers 5
Modules acquired by FFC:I. SD Sales And Distribution
II. PM Plant Management
III. QM Quality Management
IV. HCM Human Capital Management
V. PP Production Planning
VI. MM Materials Management
VII. PS Project System
VIII. FI/CO Finance & Controlling
IX. BI/BO Business Intelligence
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Regional Office (LHR)Department: RO-LHRPeriod 11-19 AugustNo of Days 7Supervisor Muhammad Tayyab
Senior Executive
The regional office Lahore is a front line department. It is actually involved with direct sales of
fertilizer and interacting with dealers. The regional manager, regional TSO and the sales officer
Lahore district are working with assistance of stock members’ .For three days Tuesday –
Thursday the officers are on field visits
and for rest 2 working days they perform their office work. The districts included in Lahore
region.
Lahore Region
1. Gujranwala
2. Sheikhupura
3. M.B.Din
4. Rawalpindi
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
GGMM
SM(SALES)
Regional Manager (LHR)
5. Sialkot
6. Hafizabad
Activities Monitoring product wise /district wise achievement with respect to targets
Monitoring current market situation with respect to fertilizer industry
Monitoring competitors activities in detail
Managing warehouses, their sales and closing stocks
Appointing and terminating dealers as regard to their performance, literate goal is to have
a strong dealer network
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Sales (NZ)Department: Sales(NZ)
Period 22-23 August
No of Days 2
Supervisor Muhammad Inamullah
Deputy Executive
Marketing Zones
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
GGMM
Zonal SM(SALES)
Regional Manager (LHR)
Marketing Zone
North Zone Central Zone South Zone
Total Regions 51. Lahore
2. Faisalabad
3. Sahiwal
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Central Zone
Zonal Office
Bhawalpur Region
Dera Ghazi Khan
Region
Multan Region
Vehari Region
South Zone
Zonal Office
Hyderabad Region
Nawab Shah
Region
Sukkur Region
North ZoneZonal Office
Lahore Office
Faisalabad Region
Sahiwal Region
Peshawar Region
4. Peshwar
5. D.I.Khan
Functions of North zone Conduction sale forecast for regions include in North zone
Monitoring sales allocation as per decided ratios
Monitoring daily sales
Studying competitors price structure
Co-coordinating regions included in North zone
Managing sales force of North zone
Checking and inventory
Coordination with top management
Ensuring availability controlling warehouses
Monitoring of product
Monitoring and keeping record of turnover of productivity
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
PLANNING DEPARTMENT
Department: Planning
Period 24-26- August
No of Days 3
Supervisor Muhammad Ikram Malik
Planning Officer
General Manager of marketing is the head of the department who reports to the managing
director. In the hierarchy senior executive (planning) report to the GMM. There are four planning
officers and one planning executive working under the supervision of the SE (P). There is a
concept of job rotation in the company. Due to job rotation, there is no specific task assign to any
person. Every person is performing all the duties that are necessary to perform all the functions
of the planning department.
Planning department functions: Maintain an efficient management information system and provide reliable information
for management decisions.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
GGMM
SE(Planning)
Planning Officers 5
Development of annual business plan
Monitoring of performance.
Analysis
Generating reports
Management Information System: Daily sales and stock update
Weekly inventory status
Competitors price and discount structure
Monthly reports
Annual Business Plan: Develop key assumption
Sales forecast by product, month, sales and regions
Dispatch plans
Trade discounts
Expense and capital budgets
Monitoring: Fertilizer market situation. (Production, Import, Sales, Prices)
Competitors Activities. (Sales, Prices, Strategies)
Sales Campaigns
International and Domestic Prices
Analysis: Fertilizer Industry Supply/Demand
Sales Performance (Target Vs Achievement)
Marks Share Own and Competitors
Warehousing Requirements
Freight Analysis
Dealers Sale Profile
Other Functions: Collect and compile relevant information/data
Supply of information to Govt. Agencies
Market surveys (NEED BASIS)
Preparation of data for training
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Coordination of local and foreign training
Training schedules for internees
Preparation of data book
Undertake any study/ analysis on need basis
Coordination of marketing conference
Assistance in presentations
Preparation of reports for the BOD meetings
Annual STEWARSHIP Report
Annual Business PlanAnnual Business Plan for the year 2011 was developed covering key assumptions, sales
plans, dispatch plans, warehousing plans, technical services activities plans, advertising and sales
promotion plans. Expense and capital budgets for marketing group were prepared and submitted
to Head office for approval. The plan also included the marketing of FFBL products and their
related expenses and revenues. Capital and operational budgets of all departments were
reviewed, finalized and integrated into marketing group's Annual Business Plan and submitted to
CE & MD FFCL and Chief Financial Officer Head Office. Final presentation on the salient
features of the annual business plan was made by General Manager Marketing and General
Manager Finance (Marketing) to the Managing Director.
Long & Short Term Projections / Marketing Feasibility During the year, marketing feasibility for BMR of plant—I was prepared & Sent to
General Manager (T&E)
Profitability projections for the period 2010-2019 were prepared & sent to Finance
Manger (B&P)
Daily Reports The product-wise sales and stock report was prepared on daily basis and furnished to all
concerned. This report contained data on daily production, ex-plant dispatches to
customers and warehouses, direct/ warehouse sales, inventories, daily orders generation
and pending orders.
A separate report to monitor Sona urea (P), (G) & Total urea cumulative sales and
inventories was also prepared consisting comparisons on daily basis with last year's
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
figures.
Weekly / Fortnightly Reports All products sales, inventory status, existing warehouse capacity and available space at
company warehouses was updated on weekly basis. The information was used to list the
over/ under capacity warehouses.
Urea and DAP industry situation was prepared regularly showing sales, production and
inventory status of all the competitors.
Weekly international prices of urea and DAP and their freight rates were updated and
furnished to all the concerned.
Prevailing market prices of urea and DAP were compiled on fortnightly basis.
Monthly, Quarterly & Annual ReportsReports for top Managements' review were prepared on monthly, quarterly and on annual
basis, highlighting marketing group achievements, information on fertilizer marketing situation,
water availability, urea, DAP and phosphatic fertilizers supply/ demand estimates and the
competitors' activities. Other reports included:
Urea and DAP fertilizers market participation.
Pakistan's all fertilizer sales and stock position.
Freight cost analysis ex-plants/port and dealer sales analysis.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Analysis of FFC (comparison to key Competitors with reference to DATA BOOK)
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Pakistan Urea Off take Agency Wise .All amount in 000'mtYe
ar
FFC DCL Engro Pak
Chi
na
NFM
L
Azga
rd
Pak
Arab
P.A/
Other
Total
200
6
32102
69
485,4
66
10094
45
0 24656
8
1611
70
133,8
06
0 5246724
200
7
28688
37
51342
6
92752
5
0 85611 4005
48
12165
5
0 4917602
200
8
30856
15
54390
5
10597
86
0 30357
7
3806
41
10538
0
0 5478904
200
9
30910
08
50688
1
93345
1
0 14364
30
3870
70
10618
5
0 6461025
FFC DCL Engro Pak China
NFML Azgard Pak Arab
P.A/Other
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
2006200720082009
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Pakistan Urea Market Participation (%)Year FFC DC
L
Engr
o
Pak China NFM
L
Azgar
d
Pak
Arab
P.A/
Other
2006 61.2 19 19.2 0 4.7 3.1 3 0
2007 58.3 9.04 18.7 0 1.8 8.1 0 0
2008 56.3 9.9 19.4 0 5.5 7 1.9 0
2009 47.6 7.8 14.4 0 22.6 6 1.6 0
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec0
2
4
6
8
10
12
14
16
18DAP Consumption Pattern In Pakistan Mont
h
Monthly
Shares in total
Consumption
(%) in 2009
Jan 2.5
Feb 3.9
Mar 4.2
Apr 3
May 5.6
Jun 9.2
Jul 13
Aug 12
Sep 10.9
Oct 8.3
Nov 17.3
Dec 10.1
Total 100
Company wise/ Provine wise Urea offtake (qty in 000'mt for 2009)FFC ECP
L
DCL NFM
L
Azgar
b
Pak
Arab
PA/others Total
Punjab 2062.
1
474 506.
9
1230.5 295.9 70.7 0 4639.7
KPK 283.2 5.4 0 28.5 1.8 18.7 0 337.6
Sinsdh 598.9 438.6 0 193.8 5.5 16.5 0 1253.3
Balochista
n
146.8 15.8 0 10.7 4 0.3 0 177.6
Pakistan 3091 933.4 506.
9
1463.5 307.2 106.2 0 6408.2
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Pakistan
FFCECPLDCLNFMLAzgarbPak ArabPA/others
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
FFC
ECPL
DCLNFM
L
Azgarb
Pak Arab
PA/others
0
500
1000
1500
2000
2500
Punjab
KPK
Sinsdh
Balochistan
Share Holding Pattern of FFC:
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Gross Margins with respect to industry:
Strong pricing Strategies together with efficiencies of production and economies of scale enable
to enjoy the Gross Margins greater than industry. Its largest market share is also one of the
reason for the increasing Gross Margins
Due to High payout Ratios its ROE is greater than other market players. Strong pricing Strategies
together with efficiencies of production and economies of scale enable to enjoy the ROE greater
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
than competitors. Its largest market share is also one of the reason for the increasing ROE.
Majority shares are also held by company itself
Comparison With Engro (Key Competitor)Key Ratios of FFC:
Key Ratios of Engro:
Gross profit of FFC is greater than Engro .Operating margin is also better which shows
managerial inefficiencies.Net margin of FFC is also much healthy than the competitor. Sales
Growth of Engro is much better which is a point of concern for FFC. FFC also should increase
its EPS growth. Far better ROE and ROA of FFC than Engro shows both a superb combination
of managerial efficiencies and interest of the investors.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Part EIGHT Strategic Matrices Problems Recommended Solutions Conclusion
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
STRATEGY FORMULATION FRAMEWORK
Important Strategy-formulation techniques can be integrated into a three stage decision-making
framework.
The tools presented in this framework are applicable to all sizes and types of organizations and
can help strategists identify, evaluate and select strategies. Strategists never consider all feasible
alternatives that could benefit the firm because there are infinite number of possible actions and
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Input Stage
Matching stage
Decision Stage
an infinite number of ways to implement those actions. Therefore, a manageable set of the most
attractive alternative strategies must be developed with the help of this three stage framework.
STAGE: 1
INPUT STAGEThis stage summarizes the basic input information needed to formulate strategies. It consists of
three matrices which is shown by the diagram:
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
The Input Stage
Internal Factor Evaluation Matrix (IFE)External Factor Evaluation Matrix (EFE)Competitive Profile Matrix (CPM)
The Matching Stage
Strength-Weaknesses-Opportunities-Threats (SWOT) MatrixStrategic Position and Action Evaluation (SPACE) MatrixBoston Consulting Group (BCG)MatrixInternal External (IE) MatrixGrand Strategy Matrix
The Decision Stage
Quantitative Strategy Planning Matrix (QSPM)
INPUT STAGE
External Factor Evaluation Matrix (EFE)
Comprehensive Profile Matrix (CPM)
Internal Factor Evaluation Matrix (IFE)
Internal Factor Evaluation (IFE) Matrix
KEY INTERNAL FACTORS
Weights Rating Weighted Score
Internal Strengths
1. Larger fertilizer Producer .05 3 . 15
2. Highest Market share .04 4 . 16
3. Growing Sales .10 3 .30
4. Countrywide location of plants .05 4 .20
5. Goodwill in market .05 3 .15
6. Strong Financial Position .03 3 .09
7. Corporate Culture .05 3 .15
8. Strong Distribution Channel .03 4 .12
9. Wider Product line .09 4 .36
10. ISO Certification .10 3 .30
Internal Weaknesses
1. Dumping of the fertilizer by dealers .04 1 .04
2. Insufficiency of technical sales officers .04 2 .08
3 The administrative problems due to large
size of the company and relaxed army
personals
.03 2 .06
4. Centralized authority .05 1 .05
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
5. Non availability of transport during peak
season
.05 2 .10
6. Low advertising campaigns .10 1 .10
7. Sales force has to face tough time in
remote areas
.03 2 .06
8. Very frequent transfers .04 2 .08
9. Lengthy hierarchy .03 2 .06
TOTAL 2.61
0.0 = Not Important 1.0= Important
1 = Major Weakness 2 = Minor Weakness
3 = Minor Strength 4 = Major Strength
INTERPRETATION:
The IFE Matrix describes the strengths and weaknesses of FFC. And Weighted Score of
IFE matrix is (2.61). Its weighted score is above average (2.50). So we can recommend that FFC
is an internally strong and well managed company. The company uses its internal strengths well
to overcome its internal weaknesses. It has a group of loyal customers, and this loyalty is due to
the trust on quality of products like well known and most leading product of its type “Sona
DAP”. Now we can recommend that FFC must have strong promotion activities on TV. Channel
as it already has on radio and newspapers.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
EXTERNAL FACTOR EVALUTATION (EFE) MATRIXSr. No
KEY EXTERNAL FACTORS WEIGHT RATING WEIGHTED SCORE
OPPURTUNITIES1 Having strong financial position company can
introduce new products0.09 4 0.36
2 Company is in a position to set up a new plant 0.08 3 0.243 Agricultural financing can be started 0.05 3 0.154 No quota Restriction put more chances of export 0.06 2 0.125 Proper advertising in international media can
increase the market share0.06 3 0.18
6 Increase sales by implementing the credit policy strategies
0.06 2 0.12
7 Can add new units to existing plants to enhance production capacity of plants
0.08 3 0.24
8 It can participate in acquisition of companies 0.07 3 0.21THREATS
9 Gas supply constraints 0.08 2 0.1610 Strong Competition with existing competitors 0.1 2 0.211 Farmers liquidity 0.07 2 0.1412 Changing government regulations 0.08 3 0.2413 Instable political situation in country 0.07 2 0.1414 Weather conditions 0.05 2 0.1
TOTAL 1.00 2.6
Interpretation:
The above matrix shows the opportunities and threats faced by FFC. The weighted score of the
FFC in the EFE matrix is 2.6, which is just above the average response so the company should
improve its ability to respond to external opportunities and should exert more efforts to reduce
the impact of threats present in the environment.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
COMPETITIVE PROFILE MATRIX (CPM):Critical Success Factors
FFCL EFCL NFCL
Weight
Rating
Weighted Score
Rating Weighted Score
Rating Weighted Score
1) Financial Position
0.16 4 0.64 3 0.48 2 0.32
2) Market Share 0.16 4 0.64 3 0.48 2 0.323) Customer
Loyalty0.13 4 0.52 3 0.39 2 0.26
4) Organization Structure
0.09 2.4 0.27 3 0.27 3 0.27
5) Production Capacity
0.09 3 0.27 3 0.27 2 0.18
6) Price Competitive
0.12 3 0.36 3 0.36 3 0.36
7) Global Expansion
0.12 3 0.36 2 0.24 2 0.24
8) Advertising 0.13 2.5 0.33 4 0.52 1 0.13Total 1.00 3.39 3.01 2.08
1= Major Weakness
2= Minor Weakness
3= Minor Strength
3= Major Strength
INTERPRETATIONS:
The Competitive Profile Matrix (CPM) identifies FFC major competitors and its particular
strengths and weaknesses in relation to the sample firm’s strategic position.
From the CPM provided above we see that financial position and the Market share are the most
important critical success factors as indicated by a weight of 0.16. The market share of FFC is
very high as it has a rating of 4; financial position is also very strong.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
STAGE: 2
Matching StageThis stage focuses upon generating feasible alternative Strategies by Aligning key
external and internal factors.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Matching Stage
SWOT
Strategic position and
Action Evaluation
Matrix (SPACE)
Boston Consulting
Group Matrix (BCG)
Internal-External Matrix
Grand Strategy Matrix
SWOT MATRIXStrengths (S)
1. Larger fertilizer
Producer
2. High brand recognition
3. Strong financial position
4. Strong internal control
5. Well trained and
disciplined
work force
6. ISO 9002 certified
7. Research and
development
Weaknesses (W)
1. Maximum investment
in the same sector.
2. Delayed decisions
3. Lack of diversification.
4. No proper utilization
of warehouses.
5. Pending orders during
peak season.
Opportunities (O)
1. Can introduced new
products
2. Can set up new
plants
3. Agriculture financing
4. Can increase exports
5. Participate in
acquisition
6. Increase sales by
implementing the
credit policy
strategies
SO Strategies
1.Extend product line
(S3,O1)
2.Increase production (S3,
O1)
3.Export urea ( S7, O6 )
4.Takeover companies
(S5.O5)
WO Strategies
1. Set up a new plant
(W5,O2 )
2. Introduce new products
( W3, O1 )
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Threats (T)
1. Gas supply
constraints
2. Strong Competition
with existing
competitors
3. Farmers liquidity
4. Changing
government
regulations.
5. Instable political
situation in country.
6. Weather conditions
ST Strategies
1. Market development
( S1,S7,T2 )
2. Maintain competitive
advantage (S2, T2)
WT Strategies
1. Diversification (W1, T2)
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
SPACE MATRIXRating Total Average
Financial Strength (FS)
1. Net Income
2. Leverage Ratios
3. Liquidity Position
4. Return on Equity
+3
+3
+2
+2 +10 +2.5
Industry Strength (IS)
1. Pakistan largest producer of fertilizer
2. Increased Demand of products
3. Quality products
4. Bigger market share
+3
+2
+2
+2 +9 +2.25
Environmental Stability (ES)
1. High Inflation Rate
2. Political stability
3. Demand Variability
4. Barriers to Entry in New Markets
5. Competition
-4
-3
-2
-3
-3 -15 -3
Competitive Advantage (CA)
1. Highest production
2. Technological Advancement
3. Control over Suppliers and Distributor
4. Customer Loyalty
-1
-2
-2
-2 -7 -1.75
ConclusionFS Average = +2.50 IS Average = +2.25
CA Average = -1.75 ES Average = -3.00
Directional Vector Coordinates: x-axis: (CA: IS) -1.75 + (+2.25) = +0.50
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Y-axis: (FS: ES) 2.50 + (-3.00) = -0.50
Interpretation
This particular SPACE matrix tells us that the organization should pursue a Conservative
strategy. FFC is at better position in the competition and it should develop the plan to compete
the others in the industry. The appropriate strategies for FFC are market penetration, market
development, product development and diversification. As competitor of Engro is adopting
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
ISCA
FS
ES
(+0.50, - 0.50)
aggressive strategies of related, unrelated diversification and getting success, so FFC should also
take steps to come in front and introduce something new.
The Boston Consulting Group (BCG) Matrix:
The BCG matrix graphically portrays differences among divisions in terms of relative market
share position and industry growth rate. The BCG matrix allows a multidivisional organization to
manage its portfolio of business by examining the relative market share position and the industry
growth rate of each division in the organization. The relative market share position is defined as
the ratio of the divisions’ own market share in a particular industry to the market share held by
the largest firm in the industry.
In this case division is made on the basis of different products. Here we will graphically present
different of FFC how they are contributing towards market share and growth rate. There are 2
main categories of products. Other detail of these products is given below.
Product wise
Division
Percent
Market Share
Percent
Growth Rate
Percent
Revenues
Percent
Profits
Sona Urea 48% 28% 62% 71%
Sona DAP 42% 43% 38% 29%
Total 100% 100%
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
BCG Matrix of FFC
Relative Market Share
100% 50% 0%
0%
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
50%
I nd
ust
rial
G
row
th R
ate
Star
DAP Question Mark
Urea
Cash cow Dog
Object 8
Interpretation:
Sona Urea: Sona Urea lies in the upper right quadrant of the BCG matrix i.e. Question Marks.
This division has high relative market share but it should be improve i.e. above 50% so that it
become star. The product has high industry growth rate. This division represents the
organizations’ best part for growth and profitability for long run.
Sona DAP: This division lies in the upper right quadrant of the BCG matrix i.e. Question Marks.
It has low relative market share and high industry growth rate. Generally their cash needs are
high and cash generation is low. These are called Question Marks because the organization has
to decide that whether to strengthen them by pursuing an intensive strategy (market penetration,
market development) or to sell out them.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
-50%
The Internal – External (IE) Matrix
2.61
2.74
Interpretations
The Internal – External matrix is based on the key dimensions of: the IFE total weighted scores
on the x – axis and the EFE total weighted scores on the y – axis. It can then be divided into 3
major regions that have different strategy implications.
In the above matrix it can be seen that both the Products in the sections relating to Grow and
Build. Thus intensive strategies (market penetration, market development and product
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
EFE Tota
l Weighte
d Scor
e
IFE Total weighted Score
4.0
3.0
2.0
1.0
4.0 3.0 2.0 1.0
development) or integrative strategies (backward integration, forward and horizontal integration)
can be most favorable.
GRAND STRATEGY MATRIX
FFC is located in the first quadrant of the matrix are in excellent strategic position and the
market growth is high.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Strong competitive
position
Slow market growth
Rapid Market Growth
FFC
Market development Integration Diversification Market penetration Product development
Weak Competitive
position
Since FFC has rapid market growth and strong competitive position so it lies in 1st Quadrant of
Grand strategy matrix .
So it must follow the following strategies
Market development
Market penetration
Product development
Since FFC have also excessive resources
Forward integration
Horizontal integration
Diversification
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
DECISION STAGEThis stage involves the single technique, the Quantitative Strategic Planning Matrix (QSPM). A
QSPM uses input information from Stage 1 to objectively evaluate feasible alternative strategies
identified in Stage 2. A QSPM reveals the relative attractiveness of alternative strategies and thus
provide objective basis for selecting specific strategies.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
The Quantitative Strategic Planning Matrix: (QSPM)
Key Factors
Diversification Integration
Weight AS TAS AS TAS
Opportunities:
1. New product line can be introduced 0.12 4 0.48 2 0.24
2. Can set up new plants 0.12 2 0.24 3 0.36
3. Agriculture financing 0.07 - - - -
4. Increase exports 0.10 - - - -
5. Participate in acquisition 0.10 3 0.30 4 0.40
Threats:
1. Gas supply constraints 0.10 3 0.30 1 0.10
2. Competition with existing competitors 0.14 4 0.56 3 0.42
3. Farmers liquidity 0.07 3 0.21 2 0.14
4. Changing Govt. regulation 0.10 3 0.30 2 0.20
5. Instable Political situation 0.08 - - - -
1.00
Strengths:
1. Largest fertilizer producer 0.12 - - - -
2. High brand recognition 0.13 3 0.39 2 0.26
3. Strong financial position 0.12 4 0.48 3 0.36
4. Strong internal control 0.11 4 0.44 3 0.33
5. Well trained & disciplined work force 0.10 3 0.30 2 0.20
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
6. Research & development 0.10 4 0.40 2 0.20
Weaknesses:
1. Maximum investment in same sector 0.09 4 0.36 2 0.18
2. Delayed decision 0.08 - - - -
3. No proper utilization of warehouses 0.08 - - -
4. Pending orders during peak season 0.07 2 0.14 3 0.21
1.00 4.90 3.60
AS = Attractiveness Score
TAS = Total Attractiveness Score
1= Not Attractive
2= Somewhat Attractive
3= Reasonably Attractive
4= Highly Attractive
Interpretation:Sum TAS of 4.90 indicates that Diversification is more attractive strategy as compared to
integration.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
PORTERS’ FIVE FORCES MODEL
Supplier Power In this industry supplier has a high bargaining power, as most of them are Foreign
Groups.
Concentration is low. They act as separate groups competing for the same project.
High Switching cost because it is difficult to contract with other groups and deal with
them.
No threat of forward integration
Buyers Power Although Buyers are large in numbers and purchases a large quantity as well, but buyers
do not have a bargaining power. There is no forum available that protects them, and this
group is not educated enough to fight for their rights.
Potential Entrants There are number of barriers to entry such, as capital requirements, government
policies, reputation of existing firms and ecological surveys.
Huge capital requirement is one of the greatest barriers for entry.
Government Policies and regulation are also act as barriers; because Natural Gas
which is the main raw material of the industry, and the prices and supply of it is
completely depend upon the Government. As before government was charging feed gas
at lower rate and Fuel gas at higher rate. But now they are being charged at the same rate.
Government does not easily give permission for manufacturing plant due to shortage of
Natural gas and harmful environmental effects, this also act as a barrier.
Massive Ecological surveys must be done before companies can begin production.
Brand reputation of existing companies is also one of the barriers because customers
do not easily get ready to switch. There are two substitutes available
1. Imported Fertilizer
2. Bio-Fertilizer
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Suitability of Alternatives: Imported fertilizer is as suitable as the industry products are. Bio-fertilizer is more suitable to use then the industry products, as it has no harmful
environmental effects, cheap to produce and it also enhance the fertility of the soil. Whereas our
product reduces the natural fertility, but its production is almost over. Therefore industry does
not have a threat of substitutes.
Switching cost is low.
Rivalry Fixed Costs are too high, which is not easily possible to tolerate. It reduces the
competition.
Industry is at maturity stage so; competition on the basis of growth is low.
Prices are almost fixed for every season so no competition on the basis of pricing
behavior.
Competition is only on the basis of Quality.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Problems and RecommendationsAfter my internship of six weeks in the FFC, I came to know that the Company has a very strong
financial position & progressed remarkably from its inception in 1978 till to date. My
recommendations include following:
Marketing Division: Department wise Problems and Recommended SolutionsProblems Solutions
Distribution Department
Bottleneck at Goth Machi
Production Plant
Provide Better Facilities to truckers
Forward Integration
Increase Rely On Railways
Motivate Dealers from adjoining areas to
get their share straight from production site
Warehousing
Supervisors of warehouses are not
competent enough to deal with
data entries in SAP
Training sessions should be conducted for
supervisors
District Sales officers should be directed to
help supervisors in this regard
Agri. Services
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Less awareness in Farmer
Community about the services
provided by agri services
department
Field ales officers should increase the
awareness among farmers about the state of
the art services provided by agri services
department
Finance
Implementation of SAP Proper Training
Minimize the customizations in Finance
module of SAP
Go for standard approach for SAP
Administration
Less job Satisfaction Top management should address the
grievances of admin employees
Increase the pay scale
Lessen the work load
Should revise the JD of some employees
Human Resource Management
Very few powers with HR of
Marketing Division
Decentralization
Policy formulation policies be also given to
HR Lhr
They should do something more than just
implementing the directions of Corporate
Office.
Labor and Legal Affairs Department (LLA)
No Specialized Legal professional LLA manager should be assisted by a legal
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Professional
Advertisement and Sales Promotion
More focus on maintain status quo
and brand recall than increasing the
sales
More use of TV advertisement
Should implement social media and e-ads
in their IMC
Procurement
Complex Procedures and
committees when procurement
orders exceeds certain amount
It should be more autonomous
Procedures should be simplified to
minimize the delays
CSR
Clash of visions between CSR and
Marketing Personnel
Marketing employees should be educated
that CSR is not just about to donate their
hard earned money, but it’s a strategic tool
to complement the overall marketing
efforts.
IT
Demoralized employees due to
downsizing as most of the
responsibilities are shifted to SAP
Get IT employees adjusted in new SAP
setup.
SAP
Implementation issues Proper Training
Change the set mind set of employees
working in remote areas.
Regional and Sales (NZ)
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Fixed share to Dist Sales Officers Share of the sales officers should be
increased if number of distributors are
increased and they are showing increased
sales patterns
Planning
Training schedules should not be
responsible of planning
It should be transferred to HR
General recommendationsMy recommendations include:
1. It is suggested that the Company may increase their credit quota from 10% to 20%. As
the market is on expansion and need for fertilizer is increasing every year, an increase in
credit quota will allow more customers to take advantage from this facility. In my
opinion this will help in to improve the sales and market share.
2. Financial analysis of FFC shows that the performance of FFC is increasing but FFC need
to go for diversification ant integration. Diversification strategies are more effective.
Consumption of fertilizer is increasing 5 % per year so to meet the domestic need it is
necessary to set up the new operation and plants in different areas.
3. It is recommended that all warehouses may be provided Warehouse Control System. In
my opinion this will definitely improve the warehouse efficiency and control over
inventory. Therefore it is suggested that more investment may be made in technology and
the project of Wide Area Network should be complete as soon as possible.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
Conclusion:Fertilizer industry occupies an important place in Pakistan’s economy. Pakistan is basically an
agrarian economy. Fertilizer is one of the key inputs used in agricultural production and is
thereby the backbone of agriculture. Agriculture contributes to 23% of the country’s GDP and
accounts for approximately 42% of employment and is the largest source of foreign exchange
earnings by serving as the base sector of the country’s major industries like textiles.
Fauji Fertilizer Company Limited (FFC) is the largest fertilizer manufacturer in the country with
a designed production capacity of 1,887 thousand tonnes of urea (including the production
capacity of Pak Saudi Fertilizer. With the commencement of commercial production in June
1982, the company started marketing of its own urea under the brand name "Sona". The
company markets not only Sona urea and DAP but also imported nitrogenous, phosphatic,
potassic fertilizers and micronutrients. The Government of Pakistan deregulated the trade and
prices of nitrogenous fertilizers in 1986. FFC met the challenge by capturing the desired market
share of urea and in the process, enhanced the image of its brand name, which has now become
the number one brand in the country.
. So we can conclude to say that Fauji Fertilizer Company is the asset of our country because it
serves as a major source of earning foreign exchange for the country. An agri-based country like
Pakistan needs such a resource from where the Farmers can get best quality urea for their crops
an FFC have served this need very well. That is the reason the government supports FFC in a
very good manner. FFC believes in selling a program rather than just a product. For this the
company has adopted a customer oriented strategy, marketing quality products backed up by
efficient and effective support services with emphasis on developing the market through practical
and innovative farmer education.FFC is proud of its financial strength and its impressive growth
record. Our future prospects are linked to the need to feed growing population in an
environmentally sustainable way.
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
FFC is a value-driven Company and the Board takes decisions considering the long term
perspective and aspirations of all our stakeholders. With market capitalization at Rs 70 billion at
the end of the year, the Company maintained and strengthened its position as the market leader
in the fertilizer industry
FFC believes and says that:
“Our products give earth the energy to fill up our lives with green.
At FFC we make sure that we give earth our trust, our zeal, our faith
as much as we can to keep it fertile.”
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)
References & Sources Used1. Financial Management by: James C Van Horne
2. Financial Accounting by: Meigs, Williams, Haka, and Buttner
3. Company’s Annual Reports – Last 5 years
4. Company web site – www.ffc.com.pk
5. Fundamentals of Marketing by Kotler
6. Sona Bulletin – Year 2010 volume 1
7. Briefings by Finance Executive and Finance Officers of FFC
8. FFBL - Annual Report for the year 2009
9. Fertilizer Sector Review May 2009
INSTITUTE OF BUSINESS ADMINISTRATION (INTERNSHIP REPORT)