Fauji Fertilizer to set up plant in Africa



STAFF REPORT ISB: Fauji Fertilizer Company, the countrys biggest maker of the farm input by market value, plans to set up a plant in Africa as domestic gas shortages undermine profits and prospects of increasing output at home.

The company has formed a consortium with foreign companies to invest at least $1.25 billion, Chief Executive Officer Naeem Khalid Lodhi, told the media.

Fauji, which has yet to complete the selection of the site for the facility, plans to start building it in 18 to 24 monthts, Lodhi said.

Fauji is planning its first overseas venture as the company run by a group of retired army officers braces for its second annual drop in profit in three years in 2014. Pakistans gas shortfall has widened to more than 2 billion cubic feet of gas a day, shutting factories and resulting in protests in the nation of more than 196 million people.

“Fauji needs to identify projects to increase profitability,” Muhammad Asad, chief investment officer at Al Meezan Investment Management Ltd., which oversees over 58 billion rupees ($587 million) of Shariah-compliant assets, including Fauji Fertilizer, said by phone from Karachi. “Growth depends on whether they can make any concrete diversifications.”

The company may also invest $400 million in setting up a coal-fired electricity generating plant or expanding in wind power. The company set up Pakistans first wind power project in the southern Sindh province in 2013.

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