PotashCorp announces job cuts and operational changes in response to challenging market conditions
Potash Corporation of Saskatchewan Inc. announced on Dec. 3 that it is reducing its workforce in Canada, the U.S., and Trinidad by approximately 18 percent from current levels due to sluggish demand and “challenging market conditions.” The company also announced a number of key operational changes affecting its potash and phosphate businesses.
Calling it a “difficult but necessary step,” PotashCorp said it planned to cut its workforce by approximately 440 employees in Saskatchewan, 130 in New Brunswick, 350 in Florida, 85 in North Carolina, and 40 in other U.S. locations and Trinidad. PotashCorp said the reductions followed a “comprehensive review of business and operational needs,” and would impact all three of its operating segments (nitrogen, phosphate, and potash), as well as corporate services.
“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,” the company said. “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 future.”
PotashCorp said the changes were necessary to respond to market conditions; to reduce costs in order to enhance the company’s global competitive position; to maintain operational flexibility in potash to meet anticipated future demand growth; and to optimize the company’s lowest-cost operations “while retaining the ability to respond to expected demand levels and product needs of our customers.”
“This is a difficult day for our employees and our company,” said PotashCorp president and CEO 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 time.”
PotashCorp also announced several major operational changes, including suspending production at one of its two Lanigan, Sask., potash mills by the end of the year; reducing production at its Cory facility in Saskatchewan also by year-end; and ceasing production at its Penobsquis, N.B., facility by the end of the first quarter of 2014. The company said the suspension of production at Penobsquis would allow it to accelerate development activities at its Picadilly potash mine near Sussex, N.B.
PotashCorp said the operational changes would not impact its Allan and Rocanville potash facilities in Saskatchewan, and that it planned to keep its suspended Lanigan facility in a “care-and-maintenance mode” following the year-end closure. PotashCorp said the changes would reduce its permanent potash workforce by some 570 people, with the majority of those positions at its Lanigan, Cory, and New Brunswick facilities. It noted that its Patience Lake, Sask., facility would also be affected by the job cuts, however, as would its corporate headquarters in Saskatoon.
“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,” the company said. “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.”
PotashCorp noted that its current expansion project at Rocanville, which is approximately 90 percent complete, will continue as previously ann