SYED FAKHIR ALI - Business success is undoubtfully closely linked to profitability but what all you use as a yardstick to measure the profits is the most interesting question. The vision and strategic thinking of a business include the financial profits and their use in most ethical and professional way ensuring distribution of the profits to all rightful stakeholders. The business, employees, the government, shareholders and the community form the major component of stakeholder for any sizable business. In today’s competitive business environment the business is often seen to dominate, significantly reducing share of employees, government, shareholder and the deprived community especially in third world societies. Yet you find examples in Pakistan which make every Pakistani and the business community proud.

Fauji Fertilizer Company Limited (FFC) is the biggest name in Pakistan’s fertilizer industry and is slowly spreading and diversifying beyond fertilizer business. After pioneering wind energy and providing space for investments in alternate energy in Pakistan, now it has entered banking and food preservation business. The company started its journey back in 1978 and got listed itself as a private limited company in 1991. Since 1994, it has regularly featured in stock exchange’s top 25 companies list for 20 years straight. In stock market FFC stands at first position consecutively for last four years. FFC is a highly responsible corporate citizen of Pakistan, with an elaborate philosophy to share its success with the community, through generous initiatives to fulfill its Corporate Social Responsibility (CSR) and contribute towards the prosperous growth of the nation.

Keeping its tradition of good governance and transparency, it has been awarded for Transparency and Corporate governance in South Asia by South Asian Federation for Accountancy (SAFA). FFC has always served the interest of farmers and farming community by absorbing major portion of the Gas Infrastructure Development Cess (GIDC) and other tax levied on the industry, instead of passing the total additional cost to the farmers, who are already suffering due to the massive hike in both international and local crop prices. FFC has always been on the forefront when it comes to fulfilling its role in paying taxes to the government of Pakistan. Over the years, it has paid billions of rupees in the form of taxes, duties and revenues to the government of Pakistan, making FFC a valuable asset for the country. In year 2014 only, FFC paid taxes amounting to Rs 45 billion.

While it is a common practice among the industries of Pakistan to seek lawful ways of avoiding taxes, whereby many companies even go to the extent of finding legal loopholes to evade the legitimate taxes, FFC has always played a positive role in this regard. As a result, where many other companies are costing the nation in Billions of Rupees annually, FFC has been a robust contributor to the national exchequer and enjoyed a successful 2015 with highest ever sales revenue of Rs. 86.321 billion including the Subsidy received on the DAP fertilizers.

For FFC, 2015 was a year to rejoice, thanks to its experienced and dedicated leadership and workforce, who made sure that the company achieves its annual targets. Despite the adverse market situation, the company’s revenues increased significantly, assuring the confidence of its shareholders. Despite various heavy taxes levied by the government, in the form of GIDC along with the General Sales Tax, FFC closed its accounts with net profits of over 16,700 million rupees and its ‘earnings per share’ (EPS) stood at 13.18 rupees per share, at the end of year 2015.

The output of this leading fertilizer producer in Pakistan would have been even higher, had it not been for the volatile business environment of the country. Levies of around Rs 800 million and financing costs related to payment of entire GIDC obligation, negatively impacted the company margins, however, it consistently showed immaculate financial performance. Similarly, company revenues were also affected by the weak implementation of the ‘Kissan Package’ announced by the Prime Minister and no implementation on roll back of gas prices for fertilizer sector, besides the change in gas billing mechanism. A high-performance company like FFC is not only producing an essential agricultural input like fertilizers domestically, to significantly reduce imports and save precious foreign exchange for the country. It is also creating robust revenue streams for the government of Pakistan, by contributing billions of rupees every year. When it comes to paying all the due taxes on time, FFC is raising the standards for corporate and financial performance, for other progressive organizations in Pakistan.

By working round-the-clock for the betterment of farmers and consumers, providing free farmer advisory services FFC has proved to be an asset for Pakistan without a doubt. FFC sets an example of high dividend payout to the tune of over 90 %. The beneficiaries of this payout include hospitals and educational institutes for the families of people who have sacrificed their today for the nation’s tomorrow. However, such companies need a system of corporate and government protection and policy. Pakistan being an agricultural economy, must address the concerns and legitimate needs of such an essential and robust industry. Pakistan despite some odds still is home for correct, ethical and successful business and FFC business model stands as a living example. Long term government policies especially for all those businesses which show their resolve to share their profits with the rightful stakeholders in Pakistan will further strengthen the will of business to help Pakistan grow and glow.