Engro1.3, Dawood Hercules and Pak Arab Fertilizers facing gas outage – Alfalah Securities Limited

Karachi: Engro Enven1.3, Dawood Hercules and Pak Arab Fertilizer would remain closed for an indefinite period owing to gas outages on the SNGP network.

According to Alfalah Securities, SNGP has been curtailed from gas supply due to annual maintenances of various gas networks taking place, which had forced these plants to stop production last month. However, SNGP has resumed the supply of gas to Agritech Daudkhel due to its small manufacturing plant. Earlier, Engro Enven1.3 (new plant), Dawood Hercules and Pak Arab fertilizers were receiving 70-80% of their allocated gas supply in September 2011 and allowed these plants to produce urea at an optimum level which caused urea prices to fall due to an improvement in urea availability. Alfalah Securities believes the closure of fertilizer plants for an indefinite period would cause severe shortages of urea for sowing and harvesting of wheat and other crops for the Rabi season and would allow urea distributors to black market the product at a much higher price.

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