Minister says ‘high’ profit margin of fertiliser companies to be trimmed

ISLAMABAD: Federal Minister for Industries and Production Rana Tanveer Hussain, Tuesday, said urea fertiliser companies are making around 30 percent profit, higher than any other sector operating in the country, adding that the fertiliser companies’ profit margins will be reduced to around 20 percent.

Briefing the Senate Standing Committee on Industries and Production which held its meeting under the chairmanship of Senator Aoun Abbas, the minister responding to a question regarding low demand for urea and high prices which has put the farmers in a difficult situation, argued that urea companies’ profits will be reduced from 30 percent to 20 percent to avoid fertiliser shortages and reduce pressure on farmers.

The minister said this year’s urea production has improved in excess of 400,000 metric tons but the government has decided to import 100,000 tons more this year, despite its high cost. The price of imported urea is around Rs5,800 per bag, with handling and transport costs bringing the total to Rs7,000 per bag.

The committee asked that federal government to establish small and medium enterprises related institutes in backward areas of Balochistan aiming at training the educated youth and enabling them to get honourable means of livelihood in their own areas. The committee said that it will not only provide job opportunities to the educated youth of the province but will have multi-pronged positive impacts.

Briefing the panel, Socrat Aman Rana, Chief Executive Officer (CEO) the Small and Medium Enterprises Development Authority (SMEDA) said that the entity recently has evolved a 10-year Cluster-Based Development Plan for growth of SME sector.

He said SMEDA since creation has contributed at least Rs66 billion to the national economy and is redesigning national economic landscape as it thrives on the dynamism of Small and Medium Enterprises (SMEs), which play a pivotal role in driving growth, innovation, and job creation.

He noted that this plan for SMEs, include five sectors including fruits/ vegetable processing, E-bike, pharmaceutical, seafood, and marble/ granite. These studies, on these sectors, are a result of the collaboration between the SMEDA and the Ministry of Planning, Development, and Special Initiatives, guided by the consultation with private sector.

The plan has been meticulously charted based on the selected sector’s potential for growth of exports and employments that also aligns with our Strategic Trade Policy Framework (STPF) for 2020-25, he said, adding: “The given facilitative cluster-based development plan is the key to unlocking the tremendous potential within our SMEs, propelling us towards a path of lasting prosperity.”

Rana explained SMEDA’s role in economic development of the country and highlighted the potential of five selected clusters in the plan. He disclosed that the potato cluster can generate $339 million by value addition and the marble and granite cluster can achieve an annual value-addition of $48 million.

The seafood cluster’s exports of $456 million can multiply manifold, the E-Bike cluster can surpass its current installed capacity of 1.3 million units, and the pharmaceuticals sector can become a globally preferred market, surpassing its FY22 exports of $268.94 million, he added and acknowledged government support for SMEDA’s development initiatives including the establishment of a Rs30 billion SME Fund, the development of SME Credit Rating Systems to improve access to finance, and a robust National Women Entrepreneurship Policy to economically empower women and youth.

Copyright Business Recorder, 2024