Degree

Master of Business Administration

Faculty / School

Faculty of Business Administration (FBA)

Advisor

Shabih Haider

Project Coordinator (Internal)

Dr. Nasir Afghan, Asad Ilyas, Salma Mirza

Client

United Agro Chemicals

Committee Member 1

Shabih Haider, Institute of Business Administration, Karachi

Project Type

MBA Research Project

Abstract / Summary

United Agro Chemicals (UAC) operates as major chemical fertilizer importers and distributors of phosphatic and potassic fertilizers since 1999. The company contributes to 12% of the market share in Phosphatic and Potassic fertilizers. UAC ranks third in line as importers of Phosphates and Potassic fertilizers. The Company is a part of the Group of companies which is called the Essarani group of Companies. The company also imports the 50kg bags to pack the fertilizers and ship them off to different distributors. The annual import of the packages is around 4-5 million bags. The company has internally realized the need of having a package manufacturing plant with a capacity of producing 29-30 million bags per annum. Our Project is to conduct a feasibility study for a packaging plant being set up by United Agro Chemicals. The objective of the study is to analyze the financial feasibility of the plant. The study also analyzes the technicalities of the plant as well as performs a cost/benefit analysis of the venture. The feasibility study also assesses the industry and market situation and predicts the available market share and profitability. The manufacturers and plastic producers in the plastic industry can be segmented in to two broad categories depending upon their respective production size and the built-in capacity. These are basically medium and small producers. The Pakistan plastic industry comprises of almost 600 - 700 Medium and about 600 small manufacturers. The latest market reports divulge that the plastic industry has an average annual growth between 8 – 10%. The key drive factor of this industry is the availability of Raw Material and majority of the raw material is imported from other parts of the world. The company wants to manufacture polypropylene woven bags. PP Woven Bags are used in various sectors such as: fertilizers, feed, rice, textile, and imported fertilizers. The demand for WPP bags increase when there is an increase in agricultural supply. Demand in north and south regions is 1,220 Million Bags / Annum. With almost 167 PP woven bags producing units working in Pakistan, the supply level is 980 Million Bags / Annum. Therefore there‟s a supply gap of 240 Million Bags / Annum. PP woven bag is not very well differentiated in terms of product attributes and therefore the only differentiating feature it can have is its cost; therefore the industry competes on the basis of price.

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