PotashCorp To Reduce Workforce By 18%

Potash Corporation of Saskatchewan Inc. (PotashCorp) has announced it is taking the difficult but necessary step to reduce its workforce in Canada, the U.S. and Trinidad by approximately 18% from current levels.

The company expects workforce reductions by region as follows:

  • Saskatchewan – approximately 440 people
  • New Brunswick – approximately 130 people
  • Florida – approximately 350 people
  • North Carolina – approximately 85 people
  • Other U.S. locations and Trinidad –  approximately 40 people

Despite confidence in the long-term drivers of its business, a significant portion of fertilizer demand comes from developing markets where growth has been less robust than expected, said PotashCorp President and CEO Bill Doyle. “This sluggish environment has been most visible in our potash and phosphate businesses, and has contributed to challenging market conditions. As a consequence, we must make some difficult decisions to ensure the company continues to be well positioned for the future,” he said.

Following a comprehensive review of business and operational needs, changes were identified to:

  •     Respond to market conditions;
  •     Reduce costs to enhance the global competitive position of the company; and
  •     Maintain operational flexibility in potash to meet anticipated future demand growth.

The changes are intended to optimize PotashCorp’s lowest-cost operations, while retaining the ability to respond to expected demand levels and product needs of its customers, Doyle said. All three business operating segments (nitrogen, phosphate and potash), as well as corporate services, will be impacted by these reductions.

“This is a difficult day for our employees and our company,” Doyle said. “While these are steps we must take to run a sustainable business and protect the long-term interests of all our stakeholders, these decisions are never easy. We understand the impact is not only on our people, but also in the communities where we work and live, and PotashCorp will work hard to help those affected through this challenging time.”

Potash prices have been sliding since mid-summer, when the biggest global producer, Russia’s Uralkali OAO, quit its export partnership with Belaruskali of Belarus and said it would seek to maximize sales volume.

Doyle said he had “no idea” when or if Uralkali and Belaruskali will return to a strategy targeting higher prices and reverse what he has called “the single dumbest thing” he has ever seen.

The turmoil in the usually tightly controlled potash industry, dominated by Uralkali and North America’s Canpotex Ltd. export group, has caused buyers to head for the sidelines to await further price reductions.

“While the (job cuts) announcement blames soft demand in developing markets, we believe the real culprit is the BPC (Uralkali-Belaruskali) break-up and the resulting price declines in both (phosphate and potash),” BGC analyst Mark Gulley said in a note to clients.

Potash demand was weak even before last summer’s spat between Uralkali and Belaruskali; buying from key importers India and China has been particularly sluggish.

Typically, potash demand grows 3% annually, but it has been flat since 2007 due to the recession, Doyle said.

He said Indian demand, influenced by government subsidies on fertilizer, is unlikely to improve much until after Indian elections this spring.

Doyle said spot Chinese purchases should resume this month. A contract between Canpotex – the export arm of PotashCorp, Mosaic Co. and Agrium Inc. – and China’s Sinofert Holdings Ltd. will likely be reached by the end of January, he said.

PotashCorp said on Tuesday it would suspend production at one of its two mills in Lanigan by year-end and cut production at its Cory operations. Both operations are in Saskatchewan. It also plans to stop production at its Penobsquis facility in New Brunswick at the end of the 2014 first quarter.

Doyle said the company will still have the ability to supply buyers with more than 10 million tonnes of potash in 2014, combining production with its large stockpiles.

He could not predict how much potash the company will produce in 2014. But he said 2013 production is likely to amount to around 7.75 million tonnes, a little over half of the company’s capacity, reflecting output curbs.

“We’ll sell exactly what we were going to sell anyway,” without the job cuts, Doyle said. “This doesn’t affect in any way our ability to service our customers.

“We just had too much capacity versus what we were seeing needed in the foreseeable future.”

Sources: PotashCorp News release, Reuters

Leave a Reply

Fertilizer Stories
FertilizerFall Fertility 2014: Forecasting Fertilizer Use
September 7, 2014
Great crops this year have tapped the soil, and fall work is definitely called for, but how challenging will that get? Read More
Aerial view of the West Fertilizer explosion site
FertilizerFertilizer Companies Blame City For West, TX, Explosion
August 6, 2014
El Dorado Chemical Co. and CF Industries contend the city failed to properly train the first responders and had insufficient protocols in place to battle the April 17, 2013, blaze at West Fertilizer Co. that triggered the explosion. Read More
FertilizerThe Fertilizer Institute: New President, Renewed Energy
February 3, 2014
Chris Jahn relishes the opportunity to lead the organization through the challenging times ahead. Read More
FertilizerA New Cycle For Fertilizer Demand
January 2, 2014
Changes in the corn market could have a major impact on the crop nutrients sector in 2014, say experts. Read More
Top 100 Articles
Milan Kucerak, president/CEO, West Central
CropLife 100West Central Cooperative And Its New President Are A Match Made In Deviation
June 29, 2015
To appreciate just how unique West Central Cooperative is in the world of ag retail, an observer need only consider Read More
Winter Wheat
CropLife 100South Dakota Co-op Member Owners Vote No On Unification
June 26, 2015
The Boards of Directors for North Central Farmers Elevator (NCFE) and Wheat Growers (WG) have announced that member-owners have voted Read More
CropLife 100The Andersons Acquires South Dakota Plant Nutrient Manufacturer Kay-Flo
May 20, 2015
The Andersons, Inc., ranked No. 22 on the CropLife 100, has purchased Kay Flo Industries of North Sioux City, SD. “This Read More
CropLife 100AgGateway’s Barcoding Initiative Progressing Nicely
May 8, 2015
According to legend (or Wikipedia), the first step towards modern bar codes came back in 1948, when Bernard Silver, a Read More
CropLife 100Pinnacle Agriculture Acquires Minnesota Retailer
April 14, 2015
Pinnacle Agriculture Holdings, LLC, ranked No. 6 on the CropLife 100,  has successfully acquired Liebl Ag, LLC in Ada, MN.  Read More
CropLife 100CHS, Aurora Cooperative Complete Fertilizer Storage, Grain Shuttle Loading Facility
April 13, 2015
CHS Inc., the nation’s leading cooperative and ranked No. 5 on the CropLife 100, and Aurora Cooperative (ranked No. 21) Read More
Latest News
Agworld Apple Watch Farm Management
EquipmentAussie Data Management Software Company Making Its Mark…
July 4, 2015
Zach Sheely, vice president of sales and operations, says that several large, well-known U.S. cooperatives (Stanislaus Farm Supply, Wilco-Winfield and Read More
Topcon AGI-4 on MF Planter
EquipmentAutosteer: Compatibility, Accuracy Remain Top Of Mind
July 3, 2015
The world of automatic steering solutions in agriculture has evolved rapidly in the last few years. From after-market add-ons that Read More
ManagementUnited Suppliers/Land ‘O Lakes Merger & Crop Update
July 2, 2015
CropLife’s Paul Schrimpf and Eric Sfiligoj talk about the reasons behind the United Suppliers/Land ‘O Lakes merger and USDA’s recent Read More
Industry NewsBioSafe Adds To Sales Force
July 2, 2015
BioSafe Systems has announced the hire of two new members for its service team. David Britt recently joined the team Read More
Chesapeake Bay
ManagementChesapeake Bay Clean-Up Gets Renewed Attention
July 2, 2015
The Chesapeake Bay has been called one of the most biologically productive ecosystems in the world. It’s also one of Read More
Measuring Bulk Tanks
ManagementBulk Pesticide Compliance: Top 10 Areas Of Improvement …
July 1, 2015
  In honor of the 33-year run of David Letterman’s Late Show, the American Agronomic Stewardship Alliance (AASA) is happy Read More
Industry NewsArysta North America Hires Midwest Sales Manager
July 1, 2015
Arysta LifeScience North America recently announced the hiring of Brian Battles as the Senior Technical Sales Manager for the Midwest Read More
Farmer on tablet
Eric SfiligojThe Never-Ending Battle Against Modern Agriculture
July 1, 2015
In the world of comic books, the character of Superman often refers to the fight to save the world as Read More
Retail FacilitiesBuilding Up Ag Retail
July 1, 2015
In the oftentimes unpredictable world we live in, it’s nice to know some things can be reliably countered on to Read More
Retail FacilitiesMaple River Grain And Agronomy Phases In Site Developme…
July 1, 2015
Marcus Construction helped Maple River Grain and Agronomy in Casselton, ND, with the design-build of its dry fertilizer, liquid chemical/seed Read More
Retail FacilitiesA&B Welding Builds A New Liquid Terminal Hub For Br…
July 1, 2015
To build its new hub facility, Briggs Crop Nutrients enlisted the help of A&B Welding. The result, an efficient facility Read More
Edon Farmers Co-op
Retail FacilitiesNew Marcus Facility At Edon Farmers Co-op Provides More…
July 1, 2015
Edon Farmers Co-Op in Edon, OH, needed a new facility to consolidate outdated locations. Marcus Construction was able to design Read More
Retail FacilitiesKinder Morgan Expands Its Storage With A New Dome Barre…
July 1, 2015
Kinder Morgan wanted additional covered storage at its Dakota Bulk Terminal on the Mississippi River in St. Paul, MN. With Read More
Retail FacilitiesHeartland Tank Protects Fertilizer From Extreme Cold At…
July 1, 2015
The Arthur Companies in Harvey, ND, enlisted the help of Heartland Tank Companies to develop a new liquid fertilizer facility Read More
The McGregor Co. fertilizer loadout
Retail FacilitiesThe McGregor Co. Partners With Kahler Automation To Cre…
June 30, 2015
Kahler Automation helped The McGregor Co. expand its Clarkston, WA, operation with unstaffed loadout technology that enables customers to pick Read More
Dry and Liquid Plant
Retail FacilitiesKahler Automation Helps CHS Dakota Ag Cooperative Build…
June 30, 2015
CHS Dakota Ag Cooperative in Mooreton, ND, wanted a liquid/dry blender system that could meet the needs of its customers Read More
Crop InputsLand O’Lakes, United Suppliers To Merge Crop Inpu…
June 29, 2015
Land O’Lakes, Inc. and United Suppliers, Inc. of Ames, IA, today announced their intent to merge their crop inputs businesses. Read More
FungicidesHelena To Distribute Unique Summit Agro Fungicide
June 29, 2015
RANMAN 400 SC fungicide, the only fungicide with a FRAC group 21 designation, is now part of the innovative Summit Read More