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Gas supply to textile industries in Faisalabad is not available which has caused export orders and production jobs to pile up: FCCI President Zahid Aslam

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Gas shortage curtails sNGPl-based

BUSINESS Friday, 1 February, 2013

urea plants output by 89pc

KARACHI

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STAFF REPORT

HE fertilizer sector faced yet another year of dismal performance due to what market observers said was an unprecedented cut in the supply of gas. The SNGPL based fertilizer plants lost production by 89 percent during the calendar year 2012, said a spokesman of the Fertilizer Manufacturers of Pakistan Advisory Council (FMPAC). Out of total production capacity of over 2.2 million tons, the SNGPL based fertilizer producing units produced only 256,500 tons of urea, the lowest ever production by these fertilizer plants in the history of this sector. “Producing only 11.6 percent of the total urea production capacity of SNGPL based fertilizer plants shows the worst ever gas curtailment being faced by the fertilizer plants in the country,” the spokesman said. The combined urea production figures are also very dismal as the whole fertilizer sector on SNGPL as well as Mari network only produced 4.1 million tons of urea compared to 4.8 million tons it produced last year against an installed capacity of 6.9 million tons. The overall production loss of 2.8 million tons in a year has never been witnessed before. Currently, all four fertilizer plants on SNGPL network are facing a complete shutdown, which has resulted in severe production and financial losses for the sector. Four Fertilizer Plants on the SNGPL network including Pakarab, Dawood Hercules, Engro’s new plant and Agritech remained the main victims of the chaotic gas situation in the country. Year 2011 and 2012 have been the worst

THE DECLINE IN UREA PRODUCTION POSES A SEVERE THREAT TO CROP YIELD years for fertilizer sector. Instead of providing gas to local fertilizer plants to produce economical and affordable urea domestically, the government preferred to import Urea by spending a hefty amount of over $ 1 billion from precious foreign exchange. The spokesman said fertilizer sector has been witnessing a steep fall in its production as it produced 5 million tons of urea in 2009 against a capacity of 5 million, 5.15 million tons against 5.6 million tons of capacity in 2010, 4.9 million tons against 6.9 million tons capacity in 2011 and finally 4.1 million tons against the total production capacity of 6.9 million tons in 2012. According to the FMPAC spokesman, despite the unprecedented gas curtailment in the last two years, domestic urea manufacturing plants have provided Rs 365 billion benefit to farmers over the last

PLANTS PRODUCE 0.25M TONS UREA AGAINST 2.2M TONNES PRODUCTION CAPACITY! 5 years, by keeping local urea prices significantly below international levels. He said there is a misconception that fertilizer manufacturers enjoy raw material subsidy from the government in the form of reduced feed gas prices. This subsidy is not for the manufacturers, but is in fact passed on to the farmer via reduced prices, he said. Based on current feed and fuel gas prices, subsidy per bag of urea works out to be Rs 228 per bag. In essence if government subsidy on gas price was taken away, urea prices would only increase by Rs 228 per bag. On the other hand, difference between price of domestic and international urea is more than Rs 1,000 per bag. Therefore, he said that not only is the fertilizer industry passing on feed gas subsidy to the farmer, it is also passing on a much

larger benefit voluntarily in addition to paying taxes to government. He said that of the total urea price increase in the last two years, about 80 percent has resulted from imposition of GST on urea and general inflation. Only 20 percent of the price increase is due to gas curtailment because the government did not honour its gas supply contracts with fertilizer manufacturers despite the fact that the industry has recently invested $2.3 billion in the country based on the government approved policy designed to encourage investment in the sector. The FMPAC spokesman said the government has also incurred significant losses by importing urea worth over $ 1 billion and providing subsidy of over Rs 50 billion on imported urea in the last 2 years. Urea is the most expensive form of energy

sbP further Cuts refiNANCe rAte

APCNGA holds dr Asim resPoNsible for eNerGy Crisis ISLAMABAD: The All Pakistan CNG Association (APCNGA) on Thursday held Advisor to Prime Minister on Petroleum and Natural Resources Dr Asim responsible for the energy crisis which has resulted in economic downturn, sluggish growth and massive unemployment. Energy crunch will remain a serious challenge confronting the country unless the incompetent Advisor Petroleum is removed, said APCNGA Chairman Supreme Council Ghiyas Abdullah Paracha. Speaking at a press conference, he said the artificial crisis of gas should be settled immediately, restoring supply to industries and CNG filling stations across Punjab according to the former schedule otherwise they would launch a countrywide protest movement from February 2. He said the APCNGA will start its protest from Bahawalpur which would be followed by a protest in Multan and Vehari on February 3 while a rally would be taken out in Faisalabad on February 4, in Gujranwala on February 5 and afterwards in Lahore, Rawalpindi and Karachi. Paracha warned that sit-ins would be staged in Lahore and Islamabad on February 10th if authorities fail to accept the legitimate demands of the CNG sector. He said the incompetence of Dr Asim had paralysed the whole country and the critical energy sector which has caused closure of hundreds of thousands of businesses and left millions of poor jobless triggering multiple social problems in this era of double digit inflation. The leader of the CNG sector added the LPG-air mix and LNG import projects are scams of bigger magnitude having far more serious repercussions than the infamous Rental Power Projects in which the nation was deprived of billions. The moves regarding liquid gas have been initiated to benefit a few influential and crook businessmen at the cost of the country which should not be tolerated, he said. Reposing full confidence in the private sector energy experts, Paracha said the energy crisis can be resolved within a few months if a high-powered committee is formed having full representation of the private sector. NNI

that is imported costing around $23/MMBTU, whereas RFO and LNG would be 30-50 percent less expensive than urea on a MMBTU basis, he added. He said that government must realize that agriculture contributes around 24 percent to the GDP of Pakistan and it also provides raw materials to all major industries of Pakistan including, textiles and sugar. For the economy of Pakistan to prosper, it is important for agricultural yields to go up which is only possible through the application of fertilizers in the right quantity at the right time, he said. The decline in urea production poses a severe threat to crops yield and thus the country might miss its agriculture and export targets and further risk the food security of the country by depending on imported food items.

ISLAMABAD APP

The government has decided to provide 50 percent subsidy on plants and machinery for establishing processing plants for meat, fruits, vegetables, dates and olives in Balochistan, Gilgit Baltistan, FATA and Khyber Pakhtunkhwa. Commerce Minister Makhdoom Amin Fahim who announced the Trade Policy (2012-15), said that a big quantity of fruits and vegetables produced in Gilgit Baltistan is wasted due to lack of processing plants and facilities and the long distance from major urban centers. This wastage reduced income for the farmers of this region, he added.

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

KARACHI: The central bank has decided to cut the rate of refinance under the Export Finance Scheme (EFS) by 0.1 percentage point from February 1 (today). This is the second rate cut announced by the State Bank of Pakistan (SBP) in a month. Earlier, it had reduced the refinance rate by 0.2 percent. “It has been decided that the rate of refinance under the Export Finance Scheme applicable from February 01, 2013 and onward will be 8.20 percent p.a. till further instructions,” said the State Bank on Thursday. The central bank, through a circular, asked commercial banks to ensure that where financing facilities were extended by them to the exporters for availing refinance facilities under the EFS, their maximum margin/spread does not exceed 1 percent per annum. The SBP circular said the revised reduced mark-up rate would also be applicable on outstanding loans granted under EFS. Accordingly, the SBP advised banks to immediately re-price their outstanding loans granted under the EFS, keeping in view the revised reduced mark-up rate. Simultaneously, SBP-BSC offices would also apply reduced mark-up on outstanding refinance loans granted under EFS. To reconcile the position of re-priced loans, the banks should submit particulars of outstanding loans re-priced by the bank under EFS on the prescribed format to the concerned SBP-BSC office(s) within 10 days from January 31. STAFF REPORT


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The country is facing a challenging economic outlook, as GDP growth in the current financial year is projected to be in the 3-3.5 percent range against a target of 4.2 percent: Asad Umar

NoN-textile exPorts Grow to 48%: fAhim

CAP slams regulators, financial institutions KARACHI

ISLAMABAD: The share of non-textile sector exports has risen from 36.5 per cent of total exports in 2006-07 to 48 percent in 2011-12. Although textile still remains the mainstay of country’s exports, focused efforts by the Ministry of Commerce for diversification of export basket and markets have yielded positive results, Federal Minister for Commerce Makhdoom Amin Fahim said while announcing Strategic Trade Policy Framework (STPF) 2012-15. He said the government has also been successful to a reasonable degree in diversification of export markets with a gradually increasing quantum of exports now going to markets in Asia and Africa. He said Afghanistan has emerged as a major trading partner and has become Pakistan’s third largest export market. He further said that despite various challenges faced by the economy, trade has shown consistent improvement as exports increased by 27 percent in the year 2010-11 and touched a record level of $ 24.8 billion. APP

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Friday, 1 February, 2013

Major Gainers COMPANY OPEN Nestle Pakistan Ltd. 4928.43 Rafhan Maize Prod. 3485.00 Colgate Palmolive 1450.00 Bata (Pak) 1350.00 Millat Tractors Ltd. 594.02

HIGH 5170.00 3550.00 1500.00 1384.99 623.72

LOW 4972.00 3550.00 1499.99 1384.99 596.00

CLOSE CHANGE 5170.00 241.57 3550.00 65.00 1500.00 50.00 1384.99 34.99 623.72 29.70

TURNOVER 5,360 20 150 150 151,600

662.00 150.00 114.50 915.00 166.00

636.69 143.00 103.93 915.00 155.00

662.00 143.00 103.93 915.00 155.01

-8.20 -7.00 -5.47 -5.00 -4.40

500 1,500 5,000 50 3,600

18.25 8.24 4.24 6.32 7.51

16.85 7.75 3.57 6.01 7.13

17.05 8.01 3.66 6.07 7.46

-0.73 0.19 -0.36 0.19 0.34

43,938,000 28,152,500 23,081,500 18,264,500 17,908,500

Major Losers

STAFF REPORT

HILE dealing with financial service providers, Pakistani consumers face problems ranging from irresponsible lending practices to unfair contracts, abusive charges and advices by salespeople that lack objectivity. “Despite the fact that Consumer Protection Department at the State Bank and the Banking Ombudsman entertain complaints from consumers, grievances redressal is not satisfactory,” said Consumers Association of Pakistan (CAP) Chairman Kaukab Iqbal on Thursday while addressing the 4th Financial Services and Consumers Conference. The conference was organised by the Consumer International-backed CAP at a local hotel with Deputy Governor State Bank of Pakistan (SBP) Kazi Abdul Muktadir as the chief guest. President and CEO Silkbank Azmat Shahzad Ahmed attended the moot as a guest of honour. Kaukab said financial institutions in Pakistan had a target-oriented approach to get more clients rather than facilitating and satisfying their consumers with better services. He slammed banks and other financial institutions for fleecing their customers under various fictitious heads.

BUSINESS

Indus Dyeing Gillette Pak Blessed Tex. Wyeth Pak Limited Pak Services

670.20 150.00 109.40 920.00 159.41

Volume Leaders

“Service providers use technical marketing practices to trap customers and lack of information leaves consumers hapless,” the CAP chief said. He also deplored a lukewarm response to customers’ complaints by the Banking Ombudsman which, Kaukab claimed, had resolved only 362 of the 1,047 complaints received during 2010. The CAP chairman urged the SBP, Banking Ombudsman and the Competition Commission of Pakistan to augment their mechanism through keeping a vigil eye on the delivery of services by the financial institutions, especially in the rural areas. Elaborating on the consumers’ doubts about the religious status of Islamic banking in the country, Kaukab stressed the need for community learning and understanding towards the distinguishing features of Islamic banks.

Maple Leaf Cement Fauji Cement Telecard Limited K.E.S.C. Lotte PakPTA

17.78 7.82 4.02 5.88 7.12

Interbank Rates USD GBP JPY EURO

PKR 97.7323 PKR 154.7004 PKR 1.0739 PKR 132.5152

Dollar East US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal

BUY

SELL

98.90 132.93 154.99 1.0710 97.56 12.51 26.75 26.25

99.60 134.67 156.98 1.0842 99.46 12.74 27.05 26.49

CORPORATE CORNER etihAd AirwAys wiNs ‘AirliNe brANd of the yeAr’ AwArd

roots milleNNium sChool Gets ‘brANd of the yeAr 2011-2012’

KARACHI: Tahir G Sachak, CEO of Life Insurance Limited, receives plague from Kaukab Iqbal, chairman Consumer Association of Pakistan. STAFF PHOTO

AAml CoNveNes GeNerAl meetiNG of Atff CertifiCAte holders KARACHI: Atlas Asset Management Limited, the management company of Atlas Fund of Funds (the Fund), a closed end fund managed by the Company, convened the General Meeting of Certificate holders of the Fund on January 30, as required under the provisions of Regulation 65 of the NBFC Regulations, 2008. The trustees of the Fund, MCB Financial Services Limited, were also present on the occasion. Briefing the Certificate holders, the Chief Executive Officer, Mr. M. Habib-ur-Rahman stated that as per the law, both the options for the future course of the Fund, i.e. revocation and winding up of the Fund, or conversion of the Fund into an open end scheme, had been notified to them. Atlas Fund of Funds, he added, was a unique closed end fund which held its IPO in December 2004, at a time when various closed end funds were then trading at a discount to NAV of between 30% to 40%, and its main objective was to invest in other closed end funds and avail the benefit of discount to NAV. Additionally, such objective also resulted in an attractive dividend yield. Responding to the questions from the Certificate holders, the CEO added that as the category of closed end funds would ultimately become redundant after all the existing closed end funds would either convert into open end funds, or go through revocation and winding up, hence, the objective of launching Atlas Fund of Funds had been largely achieved, and the first option offered to the Certificate holders by the management company was that of revocation and winding up, which was different from the other closed end funds also presently conducting this exercise of convening certificate holders/ shareholders meetings. PR

been innovative when it comes to the needs of our customers across Pakistan. We believe in going beyond business to change the way businesses manage their communications needs. Mobilink Business is another milestone in the history of Pakistan’s cellular industry that will change the paradigm of how businesses manage their connectivity needs.’ PR

KARACHI: Etihad Airways, the national airline of the United Arab Emirates, has bagged the ‘Airline Brand of the Year Award’ recently organised by the Brands Foundation here at a local hotel. The award, which is one of the highest honors bestowed in the business and corporate communities in Pakistan, was awarded to the airline due to its popularity, strong company profile and commitment to its customers as shown by nationwide surveys. The Brands Foundation, a public company monitored by the government of Pakistan, organizes the award annually with an aim to promote healthy competition among local, national and multinational brands operating in the country. PR

ISLAMABAD: Roots Millennium Schools-RMS, Pakistan won the most prestigious,

progressive; best ranked, valued and highly rated award locally and globally, the ‘Brands of the Year Award 2011 – 2012’, in the category of ‘Education’. The expert panel Brands Foundation, and a committee consisting of Governors, academics, Chief Ministers, University Chancellors, business and community Bosses nominated Roots Millennium Schools, Pakistan for this award with an overall ‘Category A’ in the light of a reliable survey conducted by the Brands Foundation. In the view of the expert panel recommendations, qualitative & quantitative study reports show that Roots Millennium Schools, Pakistan has successfully secured the highest rating in the category of Emerging Education System and has met all applicable requirements of the selection criteria laid down by the Brands Foundation for BRANDS OF THE YEAR AWARDS. Brands Foundation has the legal mandate to conduct brands audit, qualitative study, quantitative survey, market analysis & brands rating in Pakistan. The Award Ceremony was conducted at Marriott Hotel, Karachi where the Chief Guest Finance Minister Hafeez Sheikh endowed this award to the Roots Millennium Schools. Abid Hussain – General Manager Roots Millennium Schools, Pakistan received this award on behalf of CEO Roots Millennium Schools Chaudhry Faisal Mushtaq. PR

‘mobiliNk busiNess’ iNtroduCes New PArAdiGm iN busiNess CommuNiCAtioNs LAHORE: Mobilink has launched a new service division, ‘Mobilink Business’, aimed at addressing the connectivity needs of businesses across Pakistan. As part of Mobilink’s new business model, management and owners of businesses will be empowered to customize their cellular and enterprise services to suit their business and budgetary needs. Mobilink Business offers a unique portfolio of ‘Mobility Solutions’ that will enable entrepreneurs, professionals, SMEs and large business concerns to enjoy increased control, value and flexibility over their business communications. Business managers will now be able to tailor solutions by selecting their preference of numerous Mobilink services that are unique to their needs. Bilal Munir Sheikh, Chief Commercial Officer, Mobilink, emphasized, ‘Mobilink has always

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

profitepaper pakistantoday 01st February, 2013  

profitepaper pakistantoday 01st February, 2013

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