Pakistan Fertilizer_GIDC settlement – The time has come, (AKD Daily Jul 10, 2019)
- The recent increase in urea price (PKR210/bag) has reportedly been put on hold, as discussions on GIDC have regained some momentum. With fiscal constraints and IMF ruling out direct subsidies, and sales tax already at bare minimum, GIDC settlement now appears the only plausible solution to allay concerns on agricultural growth.
- GIDC settlement as per proposal - 50% reduction in prospective GIDC application for those who clear 50% of GIDC overdues - will be sufficient to nullify the recent round of gas price hike.
- Potential GIDC settlement may result in an inflow of PKR40bn for the GoP, while, continuity of operations of Agritech and FatimaFert on subsidized gas to tip demand supply dynamics and influence urea price would instead imply an outflow of PKR13-14bn from the national kitty.
- Non-concessionary players (FFBL and FFC) are expected to emerge as major beneficiaries – while FFC is expected to book a higher one-off gain due to higher GIDC payable outstanding, FFBL is expected to be the prime beneficiary on a recurring basis.
Fauji Fertilizer Bin Qasim Limited is a Pakistan-based holding company. The Company manufactures, purchases and markets fertilizers. It is involved in meat, dairy and coal based energy generation sectors. It has identified its potential business segments and has undertaken investments in the areas of food, financial, power sector and wind energy projects. Its products include Granular Urea, such as Sona Urea, and Di Ammonium Phosphate (DAP), such as Sona DAP. Sona Urea is a synthetic organic compound containing nitrogen in amide form available in the form of white solid prills. It is applied to soil and also suitable in solution form as spray application. Sona DAP contains nutrient element, phosphorous besides nitrogen available in flowing granular form Granules are stronger, harder and of uniform size. It is suitable for various crops and soils recommended for initial application. It produces over 791,260 metric tons (MT) of DAP and approximately 433,610 MT of Urea.
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AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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