HOUSTON (ICIS)--The decision by PotashCorp to cut 18% of its workforce due to the current potash market downturn sent another shock through the industry, but other Canadian producers said on Wednesday that they do not anticipate being forced to take such measures.
Agrium said operations at its Vanscoy, Saskatchewan, mine will continue as normal and that rates of production can vary depending on the time of year and market demand.
Agrium spokesperson Richard Downey said the decision by PotashCorp will not having any bearing on the business activity of the fertilizer producer and the company does not anticipate job reductions and is still on course with its announced plan to improve operational efficiency.
“We don’t have any plans for job cuts at our Vanscoy facility. Operating rates can change depending on the season and international and domestic market factors but that is always the case,” said Downey.
PotashCorp said it was reducing its workforce in Canada, the US and Trinidad due to what it described as a sluggish environment for fertilizers, most notably potash and phosphates. Officials said it was a difficult choice to make but the company recognised the current downturn and needed to reduce cost while maintaining operational flexibility.
The global potash market has been in flux since July when a trading venture between Uralkali and Belaruskali broke apart after Uralkali accused its partner of selling product independently and destroying the fundamentals of the agreement. The decision sent stocks of the various potash producers into a steep decline.
Fellow producer Mosaic said it was aware of the current situation but that the company always keeps careful watch on the market and readily adjusts its operations and strategy to keep pace with the ongoing conditions.
While the company would not address the possibility of future job cuts it had previously said in November that its potash mines would be operating at a smaller rate in the fourth quarter.
“We always monitor market conditions and align our resources to meet both short and long-term demand, while remaining cost competitive in the global market environment,” said Rob Litt, Mosaic spokesperson.
Saskatchewan is home to almost half of the world’s known reserves of potash and according to the government it produced 8.8m tonnes of potash in 2012 with about 45% of the crop nutrient exports bound for the US.