Fauji Fertilizers evaluating investment in offshore fertilizer project under diversification strategy: PACRA

January 31, 2019 (MLN): Pakistan Credit Rating Agency has maintained entity ratings of Fauji Fertilizers Company (FFC) Limited at ‘AA+’ for long-term and ‘A1+’ for short-term, with a table outlook forecast.

The ratings reflect FFC's dynamic business profile and financial position while incorporating the sound financial strength of Fauji Group. The strong business footprint of FFC has enabled the company to build an impeccable brand in Pakistan with "Sona" being a household name in the farming community.

The production facilities are secured by uninterrupted supply of gas from Mari field, representing inherent commercial strengths of the company in terms of sustainable business volumes.

FFC is relatively placed prominent in the industry. GIDC related developments are expected to crystallize over the shorter horizon, which are likely to provide benefit to industry players generally and FFC particularly.

The recent domestic supply demand scenario is also favorable, In view of discontinuation of urea subsidy scheme and increasing production costs, the industry has increased the prices of fertilizers as well.

As part of Company’s strategic plan, FFC carries a sizable book of diversified investments in both long term and short term, which has been developed to offer sustainable returns to its stakeholders. Henceforth, this continues to expand in the power sector by recently having an investment in Thar Energy Limited: dividend stream from these investments compliments FFC's ratings.

Under its diversification strategy, FFC is evaluating investment in offshore fertilizer project, leveraging associated with business ventures will require oversight and close attention.

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