An Introduction to Engro Foundation IFC Sustainability Exchange: Vocational Training Improving Local Economies Through Skilled Labor June 2013
Contents Introduction Engro Foundation: What We Do Vocational Training Dairy Value Chain Rice Value Chain
Engro Corporation has 3500 employees and revenue of Rs. 125 billion (2012) across the petro-chemical & dairy food industry Financial Performance 2011 (Rs. Billion) Subsidiary Revenue Profit After Tax Fertilizer 30.9-2.9 Food 40.9 2.6 Polymer 19.7 0.0 EXIMP 11.7 2.0 Powergen 20.9-0.4 Other 2.4 1.5 Total 125.2 1.3 1957 1965 1978 1991 1997 1999 2005 2010 2010 2010 2011 2012 Pak Stanvac, a 50:50 Esso-Mobil JV discovers Mari Gas Field in Upper Sindh Esso Pakistan Fertilizer Co. Ltd is incorporated Esso becomes Exxon Our History Exxon divests & employees lead MBO to form Engro Chemical Pakistan Engro sets up chemical storage facility and forms Engro Vopak Terminal Engro the first PVC manufacturing facility and forms Engro Asahi Polymer Engro diversifies into Dairy and forms Engro Foods Engro Foundation becomes the vehicle for all social spend Engro Chemical becomes a holding company and renamed Engro Corporation Engro Powergen builds 226MW power plant out of permeate gas Engro Fertilizers builds the largest urea train plant in the world Engro Corporation passes Rs. 100 Billion mark in revenue
Engro Foundation (EF) is Engro s platform for all social investments annually spending Engro Corp s 1% Profit Before Tax Mission : EF is committed to the sustainability of our businesses by investing in our communities around our plants and in our business value chains 1) Livelihood & Skill Development 2) Education 2) Health 4) Community Physical Infrastructure A Collaborative Approach: Our approach is based on a principle of business inclusiveness where we work with funding and implementing partners who complement our resources and expertise into our social projects (eg. social mobilization, skills development, agri value chain etc).
Our Thematic Areas : CSR Spend Rs. 114Mn (2012) Livelihoods Dairy Livestock Program Vocational (3-12 month) Technical Diploma (3 Year) Education Primary Education Secondary Education Technical Education Around 3Km around our plants CPI Community & Physical Infrastructure Solar Lighting Sanitation Health Preventive & Curative Health
Engro s Inclusive Business Framework Value Purpose Impact Benefits CSR as Value Creation Innovative and promotes sustainable business model Fundamental strategic and operational impact Shared value (business and communities) Promotes competitiveness and innovation Integrates business into the community Develops Human Capital Incorporated into the Business Strategy CSR as Risk Management Compliance Medium to high strategic and operational impact Mitigates operational impact Mitigates operational risks Supports external relationships CSR as Corporate Philanthropy Providing funding and skills Little strategic and operational impact Sponsorships Short term benefits Limited funds available Diluted impact as budget allocated to many Corporate competencies not fully utilized Misalignment- business and social responsibility strategies / functions Results in minimal social and business impact
Engro Foundation Footprint Across Pakistan
Vocational Training 8
Ghotki, Upper Sindh : High Unemployment and Unskilled Labor District Ghotki, Upper Sindh Ghotki is located 1.5 hours North-East of Sukkur There is a population of about 1 million people spread over an area of 6975 sq km Although it is an industrial heartland of 14 major Oil & Gas Companies, over 80% of the population is rural Ghotki Approx. Population 1 million Youth Segment (15-30 years) 35% At the heart of an industrial cluster Ghotki is at the heart of an industrial cluster which contains 14 of the largest Oil & Gas companies in Pakistan, including Fauji Fertilizer, Mari Gas, Fatima Fertilizer and Engro Fertilizer/Power A survey conducted by the industry showed a demand for 200 Trade Apprentices per year from the Oil & Gas Sector Rural Population Over 80% 14 Oil & Gas companies within a 50-60 km radius
Poor Social Indicators in Ghotki but connected to Industrial Cluster The following characteristics provide a ground for VoTech: The largest demographic segment of society is youth between the age of 15-30 years old Unemployment rates are extremely high A large majority of the working population is involved in daily wage labor which can be upgraded to semi-skilled levels Rationale was to develop technical skills that could be linked with the industry towards a sustainable model 3-12 month vocational training 3 year accredited technical diploma Ghotki Statistics Percentage Population Estimated PoP Size % population 15-30 years 34% 340,000 Men Unemployed % 35% 350,000 At-home Women % 94% 940,000 Teachers/schools Ratio 2.6 Private/Govt. Jobs 23% 34,500 Skilled Labour 3% 4500 Daily Wage Labour 57% 85,500 Agri-Livestock 10% 15,000 Business/SMEs 7% 10,500 Note: Based on Engro Foundation Fall 2011 Survey
A Vocational Training Center was set up in 2011 in partnership Features Location Partners Courses Offered Details Dharki, District Ghotki, Sindh Pakistan Pakistan Industrial Development Corporation, Engro Corp., Mari Gas Corp. Ltd (MGCL), Descon Engineering (DESCON), Saipem of Italy (SAIPEM) partnered to form PCESSDC (Pakistan Chemical & Energy Sector Skilled Development Company) 3 year diploma : Chemical & Mechanical Engineering. Instrumentation 2012, Electrical 2013 & Computer Science 2014. 60 students enrolled. Curriculum subjects aligned with market and industry needs of the area Current Enrollment 135 students (expected to cross 300 by 2015/6) Facilities Expected: Curriculum Hostel, internet facility, laboratory & library Accredited by the Sindh Technical Board & Guild UK by end of the academic year
What is PCESSDC? Pakistan Chemical & Energy Sector Skills Development Company (PCESSDC) is a non profit, private public partnership company (registered under section 42 of 1984) established in 2009 PCESSDC TTC was set up by PIDC (Rs. 100m), Engro Corporation (Rs. 44m), Mari Petroleum Company (Rs. 30m), DESCON (Rs. 5m), Saipem ( 250,000 in kind) and STEVTA (Rs. 25m) later on joined by USAID (100 M for Hostel Construction) & DEG of Germany (EUR 200,000.00) for Mechanical Lab PCESSDC TTC currently offers 3-year diplomas in Mechanical and Chemical Engineering and as a joint venture with STEVTA 3 6 months short courses for vocational training
Mandate Its mandate is to promote, facilitate and provide education and training to a young and growing rural population in various disciplines of the Chemical and Energy sector in Pakistan PCESSDC focuses on the provision of employment to the young and expanding rural population of Pakistan. It aims to invest in the productivity of the rural community by filling the education gap and equipping graduates with the manufacturing and technical skills required to build a strong industrial economy.
Some Glimpses