Head of Canadian fertz giant Nutrien unfazed by global geopolitical instability

Author: Richard Ewing

2020/08/11

LONDON (ICIS)--The head of Canadian fertilizer titan Nutrien on Tuesday gave an upbeat outlook for the remainder of 2020, and played down the risk to the key industry from various volatile geopolitical factors.

Acknowledging the coronavirus pandemic's impact on the global economy had compounded already strained political and trade relations between China and countries like the US, Charles (Chuck) Magro, said the importance of food security to governments meant the sector was far better positioned than some industries.

"We are in world where I don't think we have seen as many geopolitical risks as we have in the last two to three years across the globe in multiple industries," said the Saskatchewan-headquartered company's president and CEO during an Q2 earnings call.

"I can't say 'don't worry about it', but we're pretty well connected and plugged in to jurisdictions where we produce or sell, and we haven't seen even a hint of discussion in our really important businesses; whether it's fertilizers or agricultural solutions.

"The reason is these products are in high demand. The overarching priority is food security, and if governments get it wrong because of playing politics, the first group hurt will be their population, their voters.

"My view is the risk is a lot lower than some other industries, and so far we've seen very little, if anything at all, in terms of geopolitical risks that would concern us about altering trade patterns."

Late on Monday, Nutrien posted an 11% year on year slide in Q2 net income to $765m from $858m, with April-June sales down 3% year on year at $8.42bn.

The firm operates nearly 30 production sites around the world, producing millions of tonnes/year of crop nutrients including urea, ammonia, potash, phosphates, and urea ammonium nitrate (UAN).

During the same conference call on Tuesday, a senior executive confirmed two 600,000 tonne/year ammonia plants in Trinidad that were shut down in May and June are likely to remain offline until "market conditions improve".

The company did not provide any potential dates for the restart of either of the Point Lisas units, with two identical-sized sibling plants at the same site understood to be running normally.

"We took a plant down in May [for at least 12 weeks], and another one in June because of market conditions; the world has changed a little bit in the last six months," noted Raef Sully, EVP and CEO of nitrogen and phosphate at Nutrien.

"The two plants will probably stay down until market conditions improve."