Listed: TSX, NYSE
SASKATOON, SK, Dec. 3, 2013 /CNW/ - Potash Corporation of Saskatchewan Inc.
(PotashCorp) announced today that it is taking the difficult but necessary
step to reduce its workforce in Canada, the United States and Trinidad by
approximately 18 percent from current levels.
We expect 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 US locations and Trinidad - approximately 40 people
Despite confidence in the long-term drivers of our business, a significant
portion of fertilizer demand comes from developing markets where growth has
been less robust than expected. 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 today to ensure the company continues to be well positioned for the
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
-- Maintain operational flexibility in potash to meet anticipated
future demand growth.
The changes are intended to optimize our lowest-cost operations, while
retaining the ability to respond to expected demand levels and product needs
of our customers. All three business operating segments (nitrogen, phosphate
and potash), as well as corporate services, will be impacted by these
"This is a difficult day for our employees and our company," said PotashCorp
President and Chief Executive Officer Bill Doyle. "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
Operating and Workforce Changes
We are reducing our permanent potash workforce by approximately 570 people.
The majority of these positions will be at our Lanigan and Cory facilities in
Saskatchewan as well as our New Brunswick operation. Our Patience Lake, SK
facility and Saskatoon Corporate Headquarters will also be affected.
Operating changes include:
-- Suspending production at one of our two Lanigan mills by year
end, while keeping it in a care-and-maintenance mode;
-- Reducing production at our Cory facility by year end; and
-- Ceasing production at our Penobsquis, NB facility at the end of
the first quarter 2014, which will allow us to accelerate
development activities at our Picadilly mine.
Our Allan and Rocanville facilities in Saskatchewan are not expected to be
We anticipate our operational capability for 2014, along with our inventory
position, will provide us the ability to supply more than 10 million tonnes,
which should provide ample supply cushion. Although staffed to run at reduced
levels for the foreseeable future, our Lanigan and Cory plans provide the
flexibility to ramp-up operations as market conditions warrant.
Expansion spending at Rocanville - our lowest-cost operation - will continue
as previously announced. This project, which is approximately 90 percent
complete, is expected to further enhance our competitive position and play a
key role in meeting future customer needs.
Phosphate and Nitrogen
We will be closing the Suwannee River chemical plant in the second half of
2014 - one of two at our White Springs, FL phosphate facility. This move will
impact approximately 350 people. The granulation plants at this facility will
continue to operate.
A loss of capacity at White Springs is expected to be partially offset by
higher operating rates at our Aurora, NC phosphate facility. We anticipate a
net loss of approximately 215,000 tonnes of P(2)O(5) annual production within
our phosphate business beginning in 2015, although product mix optimization
will result in improved per-tonne gross margin contribution. The impact on
customers is expected to be minimal due to our product mix flexibility, as
well as the ability to direct volumes to offshore or domestic markets.
At Aurora, our number of permanent employees will be reduced by approximately
We will be reducing our workforce at our US and Trinidad nitrogen facilities
by approximately 20 permanent people. We do not anticipate any change to our
There will also be workforce reductions at our Northbrook, IL office which
includes our US Sales and support services for our Nitrogen and Phosphate
The majority of changes are anticipated to be completed in 2013, although
certain positions at impacted operations are expected to remain in place
through a transitional period. Where feasible, affected employees will be
offered voluntary severance packages prior to any involuntary reductions.
Additionally, we are committed to providing assistance to all our employees in
their transition to new opportunities. Severance and assistance programs are
expected to exceed those that are typically provided in similar situations.
We anticipate the outlined changes will result in lower per-tonne operating
costs - most notably in our potash and phosphate segments - thereby enhancing
the competitive position of each nutrient on a global basis. We expect potash
cost savings of $15-$20 per tonne in 2014 with a targeted reduction of $20-$30
per tonne by 2016 (from 2013 levels). In phosphate, we anticipate an
annualized gross margin improvement of approximately $10-$15 per P(2)O(5)
One-time costs associated with these changes are expected to approximate $70
million for severance charges. We are currently reviewing the carrying value
of our affected assets and a write-down, if required, will be incorporated
into our fourth quarter 2013 results.
"We work in a remarkable and critically important industry - one with a proud
history and a bright future," said Doyle. "While these are difficult
decisions, we know that they help ensure our company remains positioned for
the future and able to grow long-term value for those who depend on our
sustainability and success."
More information, including a video message and presentation is available at
PotashCorp is the world's largest crop nutrient company and plays an integral
role in global food production. The company produces the three essential
nutrients required to help farmers grow healthier, more abundant crops. With
global population rising and diets improving in developing countries, these
nutrients offer a responsible and practical solution to meeting the long-term
demand for food. PotashCorp is the largest producer, by capacity, of potash
and third largest producer of nitrogen and phosphate. While agriculture is its
primary market, the company also produces products for animal nutrition and
industrial uses. Common shares of Potash Corporation of Saskatchewan Inc. are
listed on the Toronto Stock Exchange and the New York Stock Exchange.
This release contains forward-looking statements or forward-looking
information (forward-looking statements). These statements can be identified
by expressions of belief, expectation or intention, as well as those
statements that are not historical fact. These statements are based on certain
factors and assumptions including with respect to: foreign exchange rates,
expected growth, results of operations, performance, business prospects and
opportunities and effective tax rates. While the company considers these
factors and assumptions to be reasonable based on information currently
available, they may prove to be incorrect. Forward-looking statements are
subject to risks and uncertainties that are difficult to predict. The results
or events set forth in forward-looking statements may differ materially from
actual results or events. Several factors could cause actual results or events
to differ materially from those expressed in the forward-looking statements,
including, but not limited to the following: variations from our assumptions
with respect to foreign exchange rates, expected growth, results of
operations, performance, business prospects and opportunities, and effective
tax rates; fluctuations in supply and demand in the fertilizer, sulfur,
transportation and petrochemical markets; costs and availability of
transportation and distribution for our raw materials and products, including
railcars and ocean freight; changes in competitive pressures, including
pricing pressures; adverse or uncertain economic conditions and changes in
credit and financial markets; the results of sales contract negotiations
within major markets; economic and political uncertainty around the world;
timing and impact of capital expenditures; risks associated with natural gas
and other hedging activities; changes in capital markets; unexpected or
adverse weather conditions; changes in currency and exchange rates; unexpected
geological or environmental conditions, including water inflows; imprecision
in reserve estimates; adverse developments in new and pending legal
proceedings or government investigations; acquisitions we may undertake;
strikes or other forms of work stoppage or slowdowns; rates of return on and
the risks associated with our investments; changes in, and the effects of,
government policies and regulations; security risks related to our information
technology systems; and earnings and the decisions of taxing authorities,
which could affect our effective tax rates. Additional risks and uncertainties
can be found in our Form 10-K for the fiscal year ended December 31, 2012
under the captions "Forward-Looking Statements" and "Item 1A - Risk Factors"
and in our other filings with the US Securities and Exchange Commission and
the Canadian provincial securities commissions. Forward-looking statements are
given only as at the date of this release and the company disclaims any
obligation to update or revise the forward-looking statements, whether as a
result of new information, future events or otherwise, except as required by
SOURCE Potash Corporation of Saskatchewan Inc.
Investors Denita Stann Vice President, Investor and Public Relations Phone:
(306) 933-8521 Fax: (306) 933-8844 Email:firstname.lastname@example.org Media Bill
Johnson Senior Director, Public Affairs Phone: (306) 933-8849 Fax: (306)
To view this news release in HTML formatting, please use the following URL:
CO: Potash Corporation of Saskatchewan Inc.
NI: MNG CHM
-0- Dec/03/2013 11:00 GMT
Press spacebar to pause and continue. Press esc to stop.