Our story begins with one company’s enterprising decision to strive ahead and invest when another had bowed out. In 1957, Pak Stanvac –an Esso/Mobil joint venture –stumbled upon vast deposits rich in natural gas in Mari while pursuing viable oil exploration in Sind. With Pak Stanvac focused exclusively on oil exploration, the discovery shifted the impetus to Esso which decided to invest on the massive industrial potential of Mari gas field. Esso proposed establishment of a giant urea plant in Daharki, about ten miles from the Mari gas fields, which would use natural gas produced as its primary raw material to turn out urea fertilizer.
Talks with the Government of Pakistan bore fruit in 1964, and an agreement was signed allowing Esso to set up a urea plant with an annual capacity of 173,000 tons. Esso brought in state-of-the-art design; commercially tried facilities; and a highly distinguished pool of technical expertise to ensure a smooth start up. Total investment made was US$ 46M –the single largest foreign investment in Pakistan to date then. The plant started production on 4 December 1968 –a few months late and with less than 10 % over run on the original budget.
To boost sales, a full-fledged marketing organization was established which undertook agronomic programs to educate farmers of Pakistan. As the nation’s first branded fertilizer manufacturer, the Company helped modernize traditional farming practices and boost farm yields, directly impacting the quality of life for farmers and their families, and for the nation at large. Farmer education programs increased consumption of fertilizers Pakistan, paving way for Company’s branded urea called “Engro” –an acronym for “Energy for Growth”.
In 1978, Esso became Exxon as part of an international name change. The Company was therefore renamed Exxon Chemical Pakistan Limited.
In 1991, Exxon decided to divest its fertilizer business on a global basis. The employees of Exxon Chemical Pakistan Limited –in partnership with leading international and local financial institutions –bought out Exxon’s 75% equity. This was, and perhaps still is, the most successful employee buy-out in Pakistan’s corporate history. Renamed Engro Chemical Pakistan Limited, the Company went from strength to strength with its consistent financial performance; growth of its core fertilizer business; and diversification into other enterprises.
A major plant capacity upgrade at Daharki coincided with the employee led buy-out in 1991. Engro also relocated fertilizer manufacturing plants from the UK and US to its Daharki plant site –an international first. Beginning in 1994, Engro Chemical Pakistan Limited moreover started venturing into other sectors: foods, energy, industrial control and automation, PVC resin manufacturing and marketing, and chemical terminal and storage.
By 2009, Engro was fast growing and had already diversified its business portfolio is as many as seven different industries. The continual expansions and diversifications in Company’s enterprises necessitated a broad restructuring in Engro Chemical operations and management. To facilitate better oversight, Engro Chemical Pakistan was converted into a holding company named Engro Corporation, and its fertilizer business was subsequently demerged to a newly formed Engro subsidiary –Engro Fertilizers Limited.
The demerger acquired the approval of High Court of Sind on December 9, 2009 after obtaining the requisite approvals from creditors and shareholders of the Company. The demerger became effective from January 1, 2010. Subsequently, all fertilizer business assets and liabilities have been transferred to Engro Fertilizers Limited against the issue of shares to the Company.
Future prospects for Engro Fertilizers look bright as the Company recently undertook its biggest urea expansion project to date. Its newly constructed Prill Tower stands tall at 125 meters –dubbed the tallest structure in Pakistan. The total cost of this expansion is approximately US$ 1.05 Billion, with the expanded facility looking set to make Engro the biggest urea manufacturer in Pakistan, besides substantially cutting the cost of urea imports to national exchequer.