Report
Rahul Hans

Pakistan fertilizers: Limited room for upside

Despite a steep decline of 25% yoy in urea offtake in 1QCY20, we believe that urea demand will rebound in the remainder of CY20f. The combination of lower urea prices, better food commodity prices and government focus on the agriculture sector will lift overall demand to 5yr industry average level of 5.7mn tons, in our view.
Significantly lower oil prices will limit gas tariff hikes in future, which will enable RLNG based producers to better negotiate with the government to allow them to prod...
Underlyings
Engro Fertilizers

Engro Fertilizers Ltd. Engro Fertilizers Limited is a Pakistan-based company, which is engaged in manufacturing, purchasing and marketing of fertilizers. The Company's brands include Engro Urea, Engro NP, Engro DAP, Zingro, Engro MOP, Engro SSP and Engro Zarkhez. Engro NP is the Company's fertilizer brand with Nitrogen and Phosphorous content in equal quantity. Engro DAP primarily contains Di-Ammonium Phosphate, and is imported by Engro EXIMP and marketed by the Company. Engro DAP is marketed in approximately 50 kilogram bags. Zingro is a micronutrient fertilizer, and is imported by Engro EXIMP and marketed by the Company. Engro Zarkhez has Nitrogen, Phosphorous and Potassium, and is primarily offered for sugar cane, fruit orchards, vegetables, potato and tobacco farming. Engro Envy is primarily offered to urban market for gardens, lawns, flower beds, fruit plants and ornamental plants. The Company is a subsidiary of Engro Corporation.

Fatima Fertilizer Co. Ltd. ADS

Fauji Fertilizer Bin Qasim Ltd.

Fauji Fertilizer Bin Qasim Limited. 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.

Fauji Fertilizer Co. Ltd.

Fauji Fertilizer is engaged in the manufacturing, purchasing and marketing of fertilizers including the investment in other fertilizer manufacturing operations. As of Dec 31 2004, Co. had a design capacity of 2,455,000 tonnes for urea production and 445,000 tonnes for DAP production.

Provider
Tellimer
Tellimer

Tellimer provides an integrated suite of services focused on the world's developing markets. It offers world class investment research and local insights; end-to-end content distribution and analytics; market execution and corporate access; brokerage services across Fixed Income and Equities; and expert advisory services.

Tellimer is headquartered in London, UK, with additional offices in Dubai, Lagos, Nairobi, New York and Singapore. It is a division of Exotix Partners LLP.

Analysts
Rahul Hans

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