LAHORE – The Engro’s market capitalization has reduced by $720 million during last four years to $430 million from its peak of $1,250 million, as fertilizer sector has found itself under a cloud of uncertainty over much of the last 18 months; be it regarding gas supply, price sustainability, or competition from stockpiled urea imports, experts said.

None has borne the brunt of the above more than Engro Corporation Ltd (ENGRO) where a massive, largely debt-financed urea expansion exercise clashed horribly with the government’s move to start fertilizer sector ‘gas curtailment’ in 2010, experts from JS Security stated in a note. While Engro’s new plant came online in June 2011, the strain on the country’s energy supply has continued to grow. Resultantly, operation of Engro’s urea plants (1.30m ton Enven +0.975 million ton base plant) has been patchy at best, pushing the company into losses and forcing Engro to seek debt re-profiling from its lenders. Once the poster boy for a fast growing company, Engro’s market capitalization has now been whittled down to $430 million from its peak of $1,250 million (in 2008).

Experts said that the discriminatory attitude of the government was not only denting its goodwill and reputation but had also put a question mark on its ability to manage and govern things. They said that the units in Sindh were getting an almost uninterrupted supply except a two- to-three hour load shedding.

What about the thousands of daily wagers who have only one source of income? And above all, they added, how the government would convince both the local and foreign investors for investment when it is unable to manage the supply of gas to existing industrial units.

“Instead of coming up with some sort of relief package, the industry is being pushed to the wall. The gas suspension for a long time is tantamount to throttling the industry to death.”

The shortage of gas is not the only issue its improper distribution also remains a cause of worry. The government should divert all new-found gas to the network of Sui Northern Gas Pipeline Limited network. They said that it seemed that some elements in the gas department were hatching conspiracies against the government to defame it.