Fauji Fertilizer Bin Qasim shuts down DAP plant amid economic downturn

Fauji Fertilizer Bin Qasim Limited (FFBL) announced on Thursday that it shut down its DAP (Di-ammonium Phosphate) fertilizer plant on December 21 in a bid to manage inventory owing to the demand and supply situation in the market.

In a notice to the Pakistan Stock Exchange (PSX), the company said: “DAP plant has been shut down on December 21, 2022 to more efficiently manage its DAP inventory owing to demand and supply situation in the market”.

Refraining from giving a timeline on the length of the shutdown, FFBL said that during the shutdown period, planned annual maintenance activity will also be carried out in January 2023 to ensure reliability and sustainable safe operations at the plant.

“After the completion of annual maintenance, the startup of DAP plant will commence based on the DAP market situation,” it said.

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"Notwithstanding the temporary closure, the company intends to meet the projected DAP demand in the country.

“However, the urea plant is operating normally,” FFBL said.

Incorporated in Pakistan under the Companies Ordinance, 1984, FFBQL is a public limited company, principally engaged in the manufacturing, purchasing and marketing of fertilizers.

The development comes as fertilizer offtake sees a massive decline in recent months in Pakistan. As per data provided by the National Fertilizer Development Centre (NFDC), during October 2022, DAP offtake was 71,000 tonnes which decreased by 79.1% over October 2021.

“This decrease in offtake is due to heavy rains/floods and the high price of DAP fertilizer in the domestic market,” NFDC said.

Meanwhile, a number of companies representing different sectors have also either shut down or limited their operations citing a drop in demand.

Earlier this month, Kohinoor Spinning Mills Limited (KOSM), a manufacturer and exporter of yarn and cloth, and stitched fabric, decided to temporarily close its production facility, citing prevailing global and economic downturn, overdue plant maintenance, high cost of production and low demand.

The management of Baluchistan Wheels Limited (BWHL) also decided to temporarily close or stop production activity due to depressed demand for autos in the market.

Later, Indus Motor Company (IMC) also announced that it will completely shut down its production plant from December 20 to December 30, citing its struggle with delays pertaining to approval for imports.

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