Potash to Cut 18% of Staff Amid Waning Demand


Potash Corp of Saskatchewan Inc , the world's largest potash producer by capacity, said it would cut 18 percent of its workforce as it struggles with slumping demand and weak prices for the crop ingredient.

The company said it would cut more than 1,000 jobs in Canada, the United States and Trinidad, including about 570 permanent jobs in its potash operations.

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"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 in a statement.

Potash Corp reported its weakest quarter in three years in October and cut its full-year earnings forecast by more than expected.

Potash prices have been sliding since mid-summer, when the biggest global producer, Russia's Uralkali OAO, quit its export partnership with Belaruskali of Belarus and said it would seek to maximize sales volumes.

Potash Corp Chief Executive Bill Doyle said in October that Uralkali's move was "the single dumbest thing" he had ever seen.

Potash Corp said on Tuesday it would suspend production at one of its two mills in Lanigan by year-end and cut production at its Cory operations. Both operations are in Saskatchewan.

The company also plans to stop production at its Penobsquis mine in New Brunswick at the end of the first quarter of 2014.

It will also close its Suwannee River chemical plant in the second half of 2014. The plant is one of the two at its White Springs phosphate facility in Florida.

Potash Corp said it expects potash cost savings of $15 to $20 per tonne in 2014 with a targeted reduction of $20 to $30 per tonne by 2016 from 2013 levels.

The company's potash sales fell to 1.5 million tonnes in the third quarter from 2.1 million a year earlier, while its average realized price dropped 28 percent to $307 per tonne.

The Saskatchewan provincial government said last week that it expected potash prices to average $348 per tonne in 2013-14, down from its budget estimate of $395.

The company will take a one-time charge of about $70 million related to the job cuts.