KARACHI, Aug 29: Fauji Fertiliser Bin Qasim Limited (FFBL) is currently carrying out Balancing, Modernisation, Revamping and Expansion (BMRE) of its ammonia plant which would increase capacity to 123 per cent, a company official said on Tuesday.He pointed out to the report of the directors on the results for the first six months of the year to June 30, 2006 which mentioned that expansion of DAP plant to 151pc of its capacity had also started.The first project was envisaged to be completed by end of second quarter of 2007 and the second would be completed by end 4 Quarter 2007.

Directors stated in their latest half year review that the contract for basic and detailed engineering had been signed with Ms Jacobs Engineering Inc of USA. And the work on the project was being carried out.

Moreover, FFBL’s investment in Pak Maroc Phosphore, which would come online by the beginning of CY08, was expected to ease the pressure of increasing cost of DAP production. The BMRE projects undertaken were financed from company’s own resources.

The company observed that the country would remain in the import regime as domestic demand continues to grow as compared to the indigenous production. In order to address this shortfall, the government should decide about gas allocations for at least 1-2 urea plants on priority.

For the first half of the year, the company posted earnings at Rs992 million, representing 25 per cent decline from Rs1,326 million in the 1H2005. The Board also announced Re0.50 per share as first interim cash dividend.

Analyst Atif Malik at JS Capital Markets commented that results were in line with expectations and earnings had declined primarily due to FFBL’s scheduled plant shutdown which was for a period of 27 days in March-April 2006 to implement Phase I of Ammonia plant BMRE.

Due to the closure sales of Urea and DAP were down 19pc and 7pc, respectively. Nevertheless, government’s compensation of Rs700 million in the second quarter, which was in lieu of the government’s non-implementation of the Fertilizer Policy 1989, supported the bottom-line.