Israel Chemicals May Boost Potash Output as Market Shifts
(Corrects first and third paragraphs of story published Aug. 7 to show that the potential increase in output is part of a strategic plan.)
Israel Chemicals Ltd. (ICL), which extracts minerals from the Dead Sea to make fertilizers and potash, is considering boosting production in the $20 billion global market as well as listing shares overseas.
The company “will explore options for increasing its potash production, both in its existing mines and in new locations around the world,” Chief Executive Officer Stefan Borgas said in an e-mailed statement. “Even with current challenging market developments, ICL continues to believe in the potash market, both in the short term and in the long term.”
The announcement of the company’s strategic plan, under way for the past nine months, follows a surprise announcement on July 30 by OAO Uralkali, the biggest potash supplier, that it would end production restrictions that underpin global prices. While the end of the restrictions is expected to boost demand for the commodity and push prices down in the short-term, prices should recover in the long-term, ICL said in the statement.
The company said it would spend as much as $500 million to buy back shares or pay dividends to shareholders. It is also preparing to list its shares on a foreign exchange, while keeping its Israeli trading, to broaden access to investors, increase its financing options, and shield itself from worsening conditions in the local exchange, according to the statement.
ICL’s second-quarter profit fell 23 percent to $316 million as revenue dropped to $1.77 billion from $1.91 billion a year ago, it said. The company’s shares declined 22 percent through yesterday since Uralkali’s announcement. The shares gained 1.4 percent to 27.99 shekels at the close in Tel Aviv.
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