Fauji fertilizers

FAUJI FERTILIZER
COMPANY LIMITED
GROUP MEMBERS
Muhammad Hassaan Tirmizi
Taimoor Khalid Butt
Muhammad Irfan Ali
Mohsin Ali
SUBJECT
TOTAL QUALITY
MANAGEMENT
CLASS
MBA-3B

TOTAL QUALITY MANAGEMENT MBA 3-B
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Contents
ACKNOWLEDGEMENT.............................................................................................................................3
DISTRIBUTION OF WORK ........................................................................................................................4
TEACHER’S REMARKS..............................................................................................................................5
ABSTRACT................................................................................................................................................6
INTRODUCTION.......................................................................................................................................7
FERTILIZER INDUSTRY..............................................................................................................................7
FAUJI FOUNDATION................................................................................................................................8
FAUJI FERTILIZER COMPANY LIMITED.....................................................................................................9
VISION...................................................................................................................................................11
MISSION................................................................................................................................................11
PROJECT DESIGN...................................................................................................................................12
IMPLEMENTATION................................................................................................................................12
THE REPORT ..........................................................................................................................................13
INTEGRATED MANAGEMENT SYSTEM..................................................................................................13
QUALITY COUNCIL.................................................................................................................................14
CODE OF ETHICS AND STANDARDS OF CONDUCT................................................................................14
PROCESS IMPROVEMENT......................................................................................................................15
CUSTOMERS..........................................................................................................................................16
EMPLOYEES...........................................................................................................................................17
SUPPLIERS .............................................................................................................................................18
BENCHMARKING...................................................................................................................................19
SWOT ANALYSIS....................................................................................................................................21
Strengths...............................................................................................................................................21
Weaknesses ..........................................................................................................................................21
Opportunities........................................................................................................................................21
Threats ..................................................................................................................................................22
OBSTACLES............................................................................................................................................22
LONG TERM PLAN.................................................................................................................................22
CONCLUSION............................................................................................ Error! Bookmark not defined.
RECOMMENDATIONS ...........................................................................................................................23
REFERENCES..........................................................................................................................................25
APPENDIX..............................................................................................................................................26

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ACKNOWLEDGEMENT
We would like to thank Almighty ALLAH for giving us the strength and intellect to
complete this project. This was the most difficult project we had come across so far
but it was due to the mercy and blessings of the Almighty ALLAH that we persevered
and completed our project.
We would also like to thank our respected teacher, Colonel Manzoor Iqbal Awan, for
helping us with the completion of this project. You continuously guided us towards
the proper completion of the project. The mistakes you pointed out from our drafts
helped us in refining our project and making it better in terms of quality as well as in
terms of aesthetics.
Finally we would like to thank Mr Muhammad Hasan Qureishi, Manager HR at FFC
Head Office, Rawalpindi and Mr Tariq Javed, Manager Manufacturing and
Operations at the FFC Production plant in Rahimyar Khan.You provided us with the
vital information that was required to complete this project. Your help in that regard is
much appreciated and acknowledged.

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DISTRIBUTION OF WORK
Muhammad Hassaan Tirmizi
Had to develop the project design, ensure its implementation and write the
report.
Taimoor Khalid Butt
Had to write the introduction and help with the project design
Muhammad Irfan Ali
Had to help with the abstract and design the layout of the report.
Mohsin Ali
Had to write the conclusion and give the recommendation

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TEACHER’S REMARKS

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ABSTRACT
This is a project where we had to examine Fauji Fertilizer against the backdrop of
Total Quality Management. TQM is the art of managing the whole to achieve
excellence. Therefore we had to see how FFC was managing its entire range of
operations while maintaining it very high standards and product quality.We found out
that FFC is a quality conscious company and it takes the quality of its products very
seriously. It has a great relationship with its customers and the basis of that
relationship is the customers’ trust that FFC will provide them with quality products.
Also FFC tends to be very careful in selecting suppliers and undertakes thorough
investigation before selecting a supplier.FFC is continuously looking to improve its
process and as a result increasing production capacity. This increased production
would lead to an expanded market share for FFC. The company is a dynamic
organization which is using every tool at its disposal to be flexible with the changing
environment.
Keywords:
 Quality
 Fauji Fertilizer Company Limited
 Benchmarking
 Customers
 Employees
 Suppliers
 Integrated management system
 Quality council
 Process improvement
 Engro fertilizer
 Code of Ethics
 Standard of Conduct
 Fertilizer Industry

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INTRODUCTION
FERTILIZER INDUSTRY
As Pakistan’s economy is agriculture based therefore the fertilizer sector assumes a
central role in the development of the country. A good quality fertilizer increases yield
therefore increasing production of crops and earning foreign exchange for Pakistan
through exports. Not only does the quantity of production increase but the quality
also increases. This increases the exports of our country which in turn helps us
correct our adverse balance of trade with other countries. Therefore it is necessary
to have a vibrant fertilizer industry in Pakistan. The good news is that future outlook
for the fertilizer industry looks bright because of supportive government policies and
favourable climatic conditions. The government almost always comprises of feudal
lords and they always try to implement encouraging agricultural policies because
their aim is also to maximize yield. Thus the fertilizer sector gets a boost in terms of
subsidized gas rates and lesser hours of load shedding.

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FAUJI FOUNDATION
Fauji Foundation is one of the largest conglomerates in Pakistan.Its interests include
energy, cement, and power generation, food, fertilizer, education, security and
employment services. It was setup as a charity in 1954 and its main purpose was the
welfare of ex-army personnel and their dependents. It is run by retired army
officers.Its headquarters is in Rawalpindi Cantonment. Some of the organizations
owned by this group are as follows:
1. Fauji Fertilizer Company
2. Fauji Cereals
3. Foundation Gas
4. Foundation University
5. Fauji Cement Company
6. Foundation Security
7. Fauji Kabirwala Power Company
8. Fauji Sugar Mills
9. Fauji Security Services
10.Fauji Fertilizer Bin Qasim

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FAUJI FERTILIZER COMPANY LIMITED
HISTORY
Fauji Fertilizer Company was incorporated in 1978 as a joint venture between Fuji
Foundation and Haldor Topsoe A/S of Denmark. Its head office is located on Mall
Road in Rawalpindi Cantonment. FFC has two plants. One is located at Goth Machhi
in Rahimyar Khan while the other one is situated at Mirpur Mathelo in Ghotki.The
initial share capital of the company was Rs. 813.9 million. The present share capital
of the company stands above Rs. 8.48 billion. Additionally, FFC has more than Rs.
8.3 billion as long term investments which include stakes in the subsidiaries FFBL,
FFCEL and associate FCCL.FFC commenced commercial production of urea in
1982.FFC participated as major shareholders in a new DAP/Urea manufacturing
complex with participation of major international/national institutions. The new
company Fauji Fertilizer Bin Qasim Limited (formerly FFC-Jordan Fertilizer Company
Limited) commenced commercial production with effect from January 01, 2000. The
facility is designed with an annual capacity of 551,000 metric tons of urea and
445,500 metric tons of DAP, revamped to 670,000 metric tons of DAP.

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CURRENT
Today, Fauji Fertilizer is the biggest fertilizer company in Pakistan with a 60% share
in urea manufacturing and urea marketing in Pakistan. It is a name synonymous with
quality and excellence. It has production plants located in Rahimyar Khan in Punjab
and Ghotki in Sindh. Its head office is located in Rawalpindi Cantonment. Its
production plants have a combined production capacity of almost 2 million Met/year
of urea and 1.15 million Met/year of ammonia. It shares are trading at Rs. 110.75 per
share in the Karachi Stock Exchange as of April, 2013. Fauji fertilizer has also been
the recipient of many awards. For its exceptional safety standards it has won 15
awards of honour from the National Safety Council, USA since 1982. It has also won
the award for best corporate report from Institute of Chartered Accountants of
Pakistan (ICAP) and Institute of Cost and Management Accountants of Pakistan
(ICMAP) for 2010 and 2011.

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VISION
“In a nation of increasing population, we believe there is substantial opportunity of
growth for FFC in the years to come.
FFC's vision is to play a leading role in the industrial and agricultural advancement of
the country pursuing new growth opportunities offering the convenience of multiple
products, brands and channels within and beyond the territorial limits of Pakistan, to
the benefit of our customers and our shareholders, elevating our image as a socially
responsible and ethical company that is watched and emulated as a model of
success. ‘’
MISSION
“FFC is a market-focused, process-centred organization delivering successful
performance through a strong focus on quality.
Our mission is to stand above the competition and provide our customers with
premium quality fertilizer products in a safe, reliable, efficient and environmentally
sound manner, deliver exceptional services and unparalleled customer support,
produce predictable earnings for our shareholders, and provide a dynamic and
challenging environment for our employees.’’

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PROJECT DESIGN
To collect data from the assigned company i.e. Fauji Fertilizer we used a
questionnaire. This was done because we felt that a questionnaire would provide us
with the information that we required to complete our project. Also a questionnaire is
a practical and time effective method of collecting information. In this questionnaire
we formulated questions that would provide us with a comprehensive body of
knowledge that would help us in obtaining a detailed picture of the quality
management in effect at Fauji Fertilizer Company Limited. It was decided that each
group member would prepare separate sets of questions and before going for the
interview the best ones would be chosen for the final questionnaire.
IMPLEMENTATION
We wanted to ask the questions face to face with someone from the quality
department but we were told that FFC has its quality control department at its plant
site in Rahimyar Khan. This was really disappointing for us because we knew that
we would not be able to conduct a face to face interview. We had to change our
plan. We contacted a friend of ours who works in the Human Resource department
at FFC head office in Rawalpindi. Through him we sent the questionnaire to the
Manager, Manufacturing and Operations in Rahimyar Khan. We had never intended
to have the questionnaire filled; rather we had prepared it for our own reference so
that during the interview if we forgot any question, we would consult it. But due to
circumstances beyond our control we had to have had it filled. We were also told that
the Manager, Manufacturing and Operations at the plant sit would not attend our
phone calls because he was a very busy man. Anyway we altered the questions and
had the questionnaire filled. It did not provide us a complete picture but did give us
enough information to complete our report. For some of the information like the
Integrated Management System we were told to consult the official website of Fauji
Fertilizer Company Limited and use the data available there.

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THE REPORT
The objective of our report was to find out about the quality management systems
employed by Fauji Fertilizer (FFCL). Based in Rawalpindi, FFCL is the largest
chemical fertilizer producer of Pakistan. This report examines the management
systems that are in place to maintain the quality standards of FFCL.
INTEGRATED MANAGEMENT SYSTEM
FFCL uses the Integrated Management System for the purpose of quality
management. Integrated Management Systems International Standards like ISO
9001, ISO 14001 and OHSAS 18001 have the common purpose of assisting
organizations for risk management, improved product quality, customer satisfaction
and continual improvement. These standards provide a foundation for organizations
to achieve business excellence.
Quality in all areas has been a hallmark of the FFCLright from the beginning and
their product "SONA UREA" has already established its prestigious place in the
market.
One major landmark for Fauji Fertilizer Company over the years is Management
Systems Certifications for International Standards (Quality, Occupational Health &
Safety and Environment) for its plant sites at Goth Machhi and Mirpur Mathelo.
To bring Management Systems (Q, OH&S and E) in line with the internationally
recognized Standards, FFCL achieved International Standards certifications for ISO
9001:2008, ISO 14001:2004 and OHSAS 18001:2007.
Quality Management System certification at FFCL plant in Goth Machhi was first
achieved in November 1997. This was an honour for FFCL because it became the
1st Fertilizer Plant in Pakistan to achieve this certification.
Good operating practices established by FFCL are consolidated in its Integrated
Management Systems (Q, OH&S and E) and aligned with the requirements of
Quality, Occupational Health & Safety and Environmental Management System
International Standards. The implementation of these standards is the most
important corporate strategy of FFCL.

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QUALITY COUNCIL
This is also where the Quality Council comes in. Its purpose is to watch the overall
quality of the organization keep a close eye on every aspect of the organization
through a properly formulated quality policy. It consists of the senior managers and
the directors of the organization. They ensure that the company follows the
guidelines and does not deviate from its quality principles.
OUR VIEWS:In our view every company has to have an effective quality council so
as to have its quality policy implemented. Therefore FFC has constituted a quality
council consisting of the senior most members of the organization’s hierarchy. This
means that the top management will ensure the enforcement of the quality policy
which will be beneficial for the organization.
CODE OF ETHICS AND STANDARDS OF CONDUCT
It is the policy of FFC to follow the highest business ethics and standards of conduct.
All the employees are obligated to act responsibly i.e. to be honest, trustworthy,
conscientious and dedicated to the highest standards of ethical business practice.
The company’s reputation depends on the conduct of its employees therefore each

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employee mustendeavour to act according to the highest ethical standards and
abide by the rules and regulations.FFC enforces its Code of Business Ethics and
Standards of Conduct at all levels fairly and without any prejudice or bias. All the
employees and directors of the organization are morally as well as legally bound to
follow these rules. The following are the core values that are followed by FFC:
1. Honesty
2. Excellence
3. Compassion
4. Consistency
5. Fairness
OUR VIEWS:In our view the company has developed an exemplary Code of Ethics.
FFC has been following this code of ethics as well as these standards of conduct
which is proved by the various quality achievement awards that they have won over
the years. This is testament to good management skills and an excellent grasp of
Total Quality Management.
PROCESS IMPROVEMENT
FFC seeks uncompromising integrity through each individual’s effort towards quality
product for their customers.. FFC also strives to achieve consistency in its products
i.e. not only achieving high quality but also maintaining it. This is a difficult task but
FFC tries its best to consistently achieve the high standard that it has set for itself.
Another component of their quality policy is fairness to employees, stakeholders,
partners, suppliers and customers through adherence to merit and the applicable
laws. As an organization FFC is always improving so as to remain up to date with the
ever changing external and internal environment. Training programs and
performance evaluation systems are part of this continuous improvement process.
Training is given to employees regarding the use of machines, handling of customer
complaints and dealing with suppliers. This is done so as to ensure the highest
standards of quality and to maintain the prestige of FFC.
OUR VIEWS: Continuous Process Improvement is the cornerstone of Total Quality
Management. It means that the organization is constantly trying to improve and

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increase its productivitywhile keeping its employees happy. The customers are given
the best possible products and better production facilities and techniques are
developed. FFC also follows continuous process improvement and is always looking
to improve its production process by bringing innovation in the various techniques
employed in the organization.
CUSTOMERS
The business success of FFC is dependent on trusting relationships with their
customers. Excellent products and services to their customers further strengthen this
relationship. Most of FFC’s customers are concerned with the price of the product.
This may be due to the perception that any product of FFC will certainly be high
quality. Therefore customers are not bothered about it. But still the company tries to
maintain that high quality so as not to break the trust of its customers. Although FFC
is the market leader in the fertilizer sector, it constantly tries to increase its market
share. To do that it increases the quantity produced, lowers the price of its products,
maintains very high quality, uses a proper supply chain system and brings into use
an effective distribution network. In order to expand its market share, FFC tries to
increase sales. To do that it uses its marketing department which conceives
advertising campaigns to increase awareness about FFC and its products. FFC also

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maintains highest standards of quality so as to earn a place in the customers’ hearts.
A high quality product will always be preferred by the customers because it gives
increased yield and that is the ultimate aim of every farmer.
OUR VIEWS:FFC takes care of its customers. It always tries to develop the best
possible products for its customers. It has a very effective distribution system that
makes sure its products reach the market rapidly. But one thing that the FFC
management did not share was how they collected feedback from their customers. In
our view FFC should go to rural areas and take personal feedback from farmers.
This would further enhance their relationship with their customers.
EMPLOYEES
FFC trains its managers to handle customer complaints and also to motivate
employees. This is done via business courses, marketing modules and leadership
seminars. Employee morale is also improved by various other methods. FFC
encourages innovation from its workers and wants them to think outside the box.
That is why they are rewarded for their creativity. This recognition and reward
system positively affects employee performance and motivates the thus increasing
the organization’s productivity and contributing to an overall happy environment. The
rewards and recognition are given for the performance of an employee during a

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quarter i.e. 3 months. Another method that improves employee morale and keeps
them happy is taking their input in the decision making process. Every major
decision that the organization makes is taken after consultation with its employees.
This gives the employees a sense of ownership as well as responsibility which
makes them feel like a pivotal part of the organization. This not only improves
morale, it also boosts productivity leading the organization to post higher revenues
and therefore higher profits. Most importantly, FFC believes in open communication
among its employees and between the top management and the lower level
employees. The employees know everything that goes on in the company. This
prevents grapevine and gossip from developing which in turn creates a stable
environment in the organization.
OUR VIEWS:TQM gives us eight basic concepts to achieve a motivated workforce
and FFC employs at least five of those concepts i.e. establish a positive attitude,
share the goals, develop interesting work, communicate effectively and celebrate
success. With the implementation of these concepts, FFC has achieved a motivated
workforce which works for the betterment of the company without being constantly
prompted by the supervisors.
SUPPLIERS
FFC believes in communicating openly with the company’s suppliers. The company
makes sure that it conveys its requirements to its suppliers so that the material that
they get is in accordance with their needs and is of the quality that they desire. This
also helps the suppliers because they know what to deliver to the company. This
saves them time and money as well as the embarrassment of having their goods
rejected.Regarding selection and certification of suppliers, FFC has a strict
procedure. This process has four stages. In the first stage the potential supplier’s
products are carefully examined. It is made sure that they are in accordance with the
quality standards of FFC. In the second stage the supplier’s service quality is
gauged. Only the suppliers with the best service quality are chosen. In the third
stage the past record of the suppliers is verified. Suppliers with the experience of
delivering goods to large organizations are preferred. In the final stage the price is
decided. The supplier which has passed the previous three stages now has to have
a reasonable price to be selected. All these factors are investigated thoroughly and

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the company makes sure that the supplier will be able to meet the high quality that
people expect of FFC.
OUR VIEWS: We think that FFC follows the correct procedure when selecting its
suppliers because in their four stage process they look at all aspects of the supplier
and its products. This means that suppliers are selected on merit and everyone is
given an equal opportunity to become FFC’s supplier. This also ensures that only the
best suppliers are associated with FFC and the highest quality standards are met.
BENCHMARKING
Being the market leader, FFC does not follow any other company’s benchmarks. On
the contrary, almost all other fertilizer companies benchmark FFC. That is because
not only is FFC the market leader but it also has some excellent policies pertaining to
quality management. This motivates other companies to follow FFC in a bid to be
like FFC. Although not benchmarking other companies, FFC does look at its biggest
competitor i.e. Engro Fertilizer. This is done because Engro has increased its market
share rapidly and FFC does not want it to take over its position as the market leader.
FFC looks at the policies of Engro and ensures that its policies are always better
than Engro’s policies. If Engro introduces a low price fertilizer, FFC will also launch a

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low price fertilizer. Similarly Engro always tries to get the better of FFC due to its
position as the market leader in the fertilizer sector.
OUR VIEWS:Benchmarking is an important facet of quality management. On the
face of it FFC looks like it is overconfident and is relying on its position as market
leader to achieve success. Its lack of benchmarking shows signs of corporate
arrogance. FFC is advised to use benchmarking. If it is the market leader it should
benchmark itself against other international companies. Fertilizer sector is strong in
agrarian economies in such as India. Therefore FFC is advised to benchmark itself
against a fertilizer company which is bigger than itself.

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SWOT ANALYSIS
Strengths
1. The market leader in the fertilizer sector.
2. Enjoys a very good reputation among the general public as well as the
corporate sector.
3. High quality products.
4. Friendly atmosphere in the organization which leads to motivated employees
and higher productivity.
Weaknesses
1. Armed forces management. The ex-army officers lack business acumen and
could be found wanting if Engro launches a hostile marketing offensive.
2. Lack of marketing. FFC products are rarely seen on satellite TV channels.
Opportunities
1. Further increase their production capacity.
2. Introduce even better quality products.
3. Expand into neighboring countries like Afghanistan and Iran.
4. In the absence of little competition, FFC can further increase its market share.

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Threats
1. Engro Fertilizer is the biggest threat to Fauji Fertilizer due to its rapidly
increasing market share and sound financial backing.
2. Adverse agricultural policies by the government could also affect FFC.
OBSTACLES
According to FFC, they do not face any obstacles implementing their quality policies
and that their policies are always implemented. Minor problems do occur but
everything is always under control and does not cause any obstacle in the
achievement of their targets, both in terms of productivity as well as quality.
OUR VIEWS: We think that every organization faces obstacles in the achievement of
quality and that FFC was trying to portray an aura of perfection. This would either be
because they were being secretive or the really were very confident in their
organizational abilities.
LONG TERM PLAN
FFC formulates its strategic plan in the light of the company philosophy. The vision
and mission of FFC are the guiding principles when the company decides its annual
objectives and its long term corporate strategy. FFC continuously strives to improve
its products and in the process increase its market share further. Rather than sitting
back and relaxing, FFC is looking to further consolidate its position as the biggest
fertilizer company in Pakistan.
OUR VIEWS:The long term plan of FFC is very encouraging and speaks volumes
about the company’s confidence in its bright future. The company wants to
consolidate its position as the market leader and wants to expand its market share in
the country’s fertilizer sector.

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RECOMMENDATIONS
We recommend that FFC should continue to follow these quality principles. These
principles have served it well. They have made FFC the company that it is today. It is
recommended that FFC should use its position as a market leader in the fertilizer
sector and expand its operations in other countries as well. Neighbouring countries
like Afghanistan and Iran are ideal for this type of expansion. FFC is also advised to
maintain its high quality because in a situation like this it is very easy for a company
to get complacent and start neglecting the quality of its products. The company is
also advised to start working hard because Engro is gaining market share quickly
and if FFC does not do something about it then very soon FFC will have to relinquish
its status as the market leader.

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CONCLUSION
Fauji Fertilizer Company Limited is a chemical fertilizer company. It is the largest
fertilizer company in Pakistan. We looked at the quality practices of Fauji Fertilizer
Company Limited. FFC employs the best quality practices at its production plants as
well as in the entire organization. Its production plants are located in Rahimyar Khan
and Ghotki while its head office is in Rawalpindi. Overall FFC is in a strong position
both financially as well as in terms of quality practices. They just need to continue
these practices so that they not only retain their position as the market leaders but
build upon it and further expand their market share.

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REFERENCES
Data Sources:
1. Introduction to FFC….http://www.ffc.com.pk/
2. Integrated Management Systems….http://www.ffc.com.pk/ims.aspx
3. Vision and Mission…..http://www.ffc.com.pk/vision-statement.aspx
Image Sources:
1. Integrated Management system……http://www.afoes.ae/aha/wp-
content/uploads/2010/12/IMS.jpg
2. SWOT
Analysis......http://st.depositphotos.com/1743352/1271/i/950/depositphotos_1
2712164-SWOT-Analysis-Diagram.jpg
3. Engro Fertilizer…..http://engro.pakissan.com/images/top2.jpg

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APPENDIX
The Questionnaire
Q1. What is the code of ethics for your organization?
Q2. Do you have a quality council?
Q3. What is the composition of the Quality Council? What are its functions?
Q4. What is your company’s philosophy?
Q5. What do you think is the main concern of your customers, price of the product or
quality of service?
Q6. What is the best way for your company to increase its market share?
Q7. How do you train your frontline managers to handle complaints from customers?
Q8. What are the ways you use to boost the morale of your employees?
Q9. Do recognition and reward affect the motivation of employees?
Q10. What are the various techniques you use to initiate and sustain process
improvement?
Q11. How do you select your suppliers?
Q12. How do you formulate your strategic plan and annual objectives?
Q13. How do you use the service department to encourage future sales?
Q14. Do you utilize 6-sigma strategies in your organization?
Q15. How do you use benchmarking in your organization?

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