Officials at PotashCorp. have announced an 18% workforce reduction among employees in Canada, the U.S. and Trinidad from current levels. The top potash producer is planning cutbacks of 440 positions in Saskatchewan, 130 in New Brunswick, 350 in Florida, 85 in North Carolina and about 40 cuts elsewhere in the U.S. and Trinidad.
Despite long-term business confidence, company officials based in Saskatoon, Canada, said in a statement that a “significant” demand for the fertilizer ingredient coming from developing markets has been “less robust than expected.”
Most impacted have been potash and phosphate sales; consequently, “we must make difficult decisions to ensure the company continues well positioned for the future,” the company said in a statement.
In addition to an overall comprehensive business review, company leaders expressed regret over the layoffs. “This is a difficult day for our employees and our company,” said CEO Bill Doyle. “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.”
In all, the permanent potash workforce will be reduced by approximately 570 people. Most of these positions will be at the Lanigan and Cory facilities in Saskatchewan, as well as the New Brunswick operation. The Patience Lake facility and Saskatoon corporate headquarters will also be affected, added PotashCorp officials.
Operating changes, added representatives, include production suspension at one of two Lanigan mills pending Q4 2013, with a care-and-maintenance mode throughout and production cuts at Cory by year’s end and production cessation at the Penobsquis, NB facility at Q1 2014, allowing for acceleration at the Picadilly mine.
The Allan and Rocanville facilities in Saskatchewan, meanwhile, will be impacted, too. “We anticipate operational capability for 2014, along with our inventory, will provide the ability to supply more than 10 million tons, which should provide ample supply cushion,” company officials added in a statement.
While staffed for reduced levels for the foreseeable future, the Lanigan and Cory projects plan to provide flexibility to ramp-up operations as market conditions warrant, said company officials. Expansions pending at Rocanville — the lowest-cost operation — will continue as previously announced; about 90% complete, the project will enhance the company position while playing a key role in meeting future customer needs.
In phosphate and nitrogen, the company said it would close the Suwannee River chemical plant by the end of Q2 2014 — one of its two facilities at the White Springs, Florida, phosphate project. The move will impact 350 people, added management; operation of the facility’s granulation plants will continue. A capacity loss at White Springs is expected to offset higher operating rates at the company’s Aurora, North Carolina, phosphate facility.
A net loss of 215,000 tons of P2O5 annual production within the phosphate business beginning in 2015 is expected, although product mix optimization will result in improved per-ton gross margin contribution. Impact on customers is expected to be minimal due to their product mix flexibility, along with the ability to direct volumes to offshore or domestic markets.
Permanent employees at Aurora will be reduced by approximately 85. U.S. and Trinidad nitrogen facilities, meanwhile, will see approximately 20 layoffs. There will also be workforce reductions at the Northbrook, Illinois, office, which including U.S. sales and support services for nitrogen and phosphate businesses. Most changes are anticipated by 2013’s end; where possible, affected employees will be offered voluntary severance packages prior to involuntary reductions.
