Fauji Foundation – A Model Welfare Enterprise

Khaleej Times interviewed Waqar Ahmed Malik Managing Director and CEO at Fauji Foundation. Qualified as a Chartered Accountant, he has 35 years’ plus experience with major institutions in Pakistan and Europe including 10 years as Chairman and CEO of ICI Pakistan. He has also served as President, Overseas Chamber of Commerce and Industry

Please give us an overview of Fauji Foundation?

Fauji Foundation (FF or ‘The Foundation’) is a charitable trust founded in 1954 and incorporated under The Charitable Endowment Act 1890. The raison d’etre of Foundation is ‘Earn to Serve’. The Foundation operates as a Hybrid Social Enterprise, where its social mission of provision of welfare services to veterans and its dependents is entirely financed through commercial investments. The post war repatriation fund of $0.2 million (PKR 18.2 million), left by the British government for the Pakistan veterans, was utilised to set up the Foundation over one off distribution. Thus, it was the start of an incredible journey of socially driven organisation, fully self-sustained by its commercial investments that also supplements Pakistan`s national economic development.

The core purpose of the Foundation is to support the veterans and their families, including widows and Shuhadas for their rehabilitation. Fauji Foundation proudly spearheads this mantle entirely on self -sustaining basis and today, FF is one of the largest social hybrid enterprise.

Our journey and growth from 50-bedded hospital in 1959 to nationwide 1,830 beds across 74 medical facilities which include 11 hospitals and 63 clinics and 126 educational institutes comprising a university, medical, dental and nursing colleges, tertiary colleges and school and vocational training institutions demonstrate our commitment and devotion towards the core purpose. FF provides these welfare and social services with annual spending of about $63 million (PKR 11 billion), which saves public funds, otherwise the government would have to fund these activities. FF is now serving 9.7 million people as beneficiaries, contributing five per cent of the population.

The endowment fund is prudently invested in the sectors of agriculture, infrastructure, food chain, energy and financial services. Most commercial investments are listed on the Pakistan Stock Exchange and run with the highest level of corporate governance and integrity. The Foundation contributes about $ 900 million (Rs 160 billion) per annum in the form of duties and taxes to the national exchequer and ranks as one of the largest tax payers in Pakistan.

Fauji Foundation`s social mission is self-sustaining and does not rely on any external support but its commercial ventures play pivotal role in ensuring country`s food self-sufficiency, nutritional needs, energy security, infrastructure development and financial inclusivity of the population.

What is your vision for the Foundation?

Our vision is: “As a role model welfare enterprise, maintain sustained excellence in health care, education and industry in order to serve our beneficiaries and public.”

Some of your group companies are in agriculture sector and food, do you have plans to grow this to a level to export value added finished food products?

Fauji Foundation group companies play a key role in the national economic development of Pakistan, solving pressing needs of our time. We feel that it is our responsibility to contribute to the economic development of Pakistan. In fact, the success of FF is linked with the success of Pakistan.

Pakistan, being an agrarian economy, is primarily dependent on the performance of agriculture sector. FF`s fertilizer and E&P businesses are the backbone in ensuring food security of the country. Our fertilizer business meets around 50 per cent of fertilizer requirement of the country while E&P business provides raw material (i.e. natural gas) to majority of the fertilizer players. In order to develop and modernise agriculture sector, we are actively providing farm advisory services to the farming community throughout Pakistan since 1981, for increasing the agriculture production in general and the farmers’ income in particular. Our organisation, in pursuit of its national commitment and moral obligation, maintains regular contact with farmers and agricultural institutions to ensure efficient transfer of modern agricultural technology in an effective way.

Pakistan is facing an acute shortage of gas, which is the biggest threat to the agriculture sector. Fauji group is evaluating options to meet the gas requirement of the fertilizer industry through coal gasification of reserves at Thar, Sind. This undoubtedly will open further opportunities and would be a big step toward self-reliance of Pakistan in food and energy.

After Sui, Pakistan has not been able to find any major gas discovery, which could at least stop/reduce the fast depletion rate of gas reserves. Our E&P business is undertaking aggressive exploration drive with an annual expenditure of around $ 350 - 400 million targeting Baluchistan and KPK province.

Through our marine terminal businesses located at Karachi, we have been handling 40-45 per cent of total oil imports of Pakistan (80 per cent of petroleum products), thus playing a critical role in the energy supply chain of the country. In terms of grain and fertilizer cargo import, we are handling around 40-48 per cent of the import volume which demonstrate our commitment and contribution to the national development.

In terms of contribution towards infrastructure development, our cement business ranks amongst the top four cement players of the country, providing cement of highest quality to the major infrastructure and energy projects including Dasu, Mohmand and Diamer Bhasha Dams and private hydro power projects.

What is your view on the macro economic scenario of Pakistan?

Despite the challenges, Pakistan’s economy is moving progressively on higher and sustainable growth path. Pakistan was implementing stabilisation policy post 2017-18 and the economy was recovering from macroeconomic imbalances, but Covid-19 slowed down the pace. However, Pakistan did much better in coping up with the pandemic compared to many countries.

The economy has witnessed a V-shaped recovery through improved Covid-19 containment strategies, incentives offered to the industry to minimize the impact of an industrial shutdown on labour livelihoods, continued accommodative fiscal and monetary policies that accelerated the recovery across all sectors. The performance in agriculture, large scale manufacturing (LSM), construction and exports sectors are the key success factors in this recovery. Looking ahead, the non-oil current account deficit is expected to decline, and exports and remittances continue to remain resilient. With current year performance, it is expected that the economy will grow by around five per cent in 2022.

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