The fertilizer industry PEST analysis give analysis of external factors; Political, Legal, Economical and Technological. Each factor could has positive and negative impact on the industry. Thus, it’s important for the companies operating within this industry should have a detailed analysis and devise their strategies accordingly. Taking critical decision in absence of analysis is like searching for the destination without knowing the the direction.
Political Trend
Keeping in mind the incentives offered by the government under the Fertilizer Policy 2001, it can rightly be said that the political trends for this industry are positive. Some of these incentives are as follows:
• The production and import of fertilizer has been subsidized by the government to meet the local demand for fertilizers at low prices.
• Investors will enjoy the same exemption/concession on relocation of equipments and second hand plants as that on new plants.
• As urea is an important raw material required by the industry the production of which requires gas, the government provides concession in the rates of gas.
• No custom duty is applicable on any import done by producers of Rock Phosphate and Phosphorous.
• The government also allows tax relaxation to this industry.
• The government also provided export benefits and incentives to suppliers of capital goods required for different projects of the industry.
• The gas price has been declared to remain consistent for ten years to eliminate uncertainty.
Economical Trend
The fertilizer industry enjoys favors from the government because it facilitates the agricultural sector which accounts for 22% of the GDP. The government has imposed strict bans on export of fertilizers in order to gain economic stability. Furthermore, government has provided subsidies to the extent of 27 billion for the supply of Urea and DAP specifically and to facilitate import and production of fertilizer in general.
Social Trends
If the waste of this industry is not disposed of properly, it can lead to several diseases such as asthma, kidney failure and lung cancer. But the use of artificial fertilizers cannot be brought to an end because it saves the time of the farmers and they prefer artificial fertilizers over bio fertilizers.
Technological Trend
In order to meet the demand of fertilizers in the country, it is very important to have in depth technological knowledge, the ability to plan and develop processes and monitor them for perfect execution.
The operators of fertilizer plants are aware of the latest technological developments and are capable enough to meet international standards of production and capacity utilization. Furthermore, efforts have been made to develop environment friendly procedures so as to avoid pollution as much as possible. As a result, the performance of our gas plants is considered among the best.
Other techniques such as de-bottle necking and energy conservation are also being used to increase efficiency, improve the capacity utilization and lower costs per ton. Furthermore, switching to Liquefied Natural Gas (LNG) is also an option that is being considered to increase efficiency and reduce cost