Sunday, October 25, 2009

Pondering the problematic issues for potash

"At PotashCorp we have always been a patient company and we're preparing for demand growth knowing it inevitably returns," -- Saskatchewan's potash industry looking to the future for better days, as the current ones are providing for challenges.

While Prince Rupert awaits its destiny in the world of Potash, there are some interesting financial concerns to keep track of and digest, as Canpotex ruminates on where it will locate an expanded presence on the West coast for the shipment of its product.

This past week has not been a particularly good one for Saskatchewan’s potash producer, the Potash Corporation of Saskatchewan was faced with some financial setbacks in the way of earnings reversals and now layoffs in operations, which paint a rather worrisome short term trend for the commodity and perhaps lay the foundation for revisions to short term planning and project wish lists.

Friday’s Daily News outlined the details of a letter writing campaign request from the Prince Rupert Chamber of Commerce, a laudable project for sure, but one which perhaps didn’t come with enough lead in time for local residents.
Especially considering the deadline for letters was listed as this Friday past, the same day the details appeared in the Daily News providing for a link listed in the paper, one which didn’t seem to work particularly well when transcribed into a Google search engine.

Still, for those that knew about the letter campaign earlier and did find a way to contribute their heartfelt message of support it’s a project that couldn't have hurt the city's chances at landing the planned terminal for the North Coast, but we wonder if at the moment, the folks at Canpotex will have time to read the letters, as it seems that they have more than a few corporate fires to put out.

The recent editions of the national papers provided a litany of woe for potash, including a near billion dollar loss in the third quarter, delays in overseas contract commitments, a growing decline in enthusiasm from stock analysts, as well as a growing revolt over pricing from the farmlands of Canada.
Wrapping up the week of misery for potash corporations Friday were the details on the layoff plans for potash operations in the province of Saskatchewan.

They are financial setbacks and market concerns, which may be giving that province’s major corporation Canpotex, much to think about as far as the short and long term financial health of their industry and may provide yet another twist in their plans for upcoming expansion anywhere.
Locals should be mindful of the comments from Canpotex officials back at that open house in September, as relayed in the Northern View .
"Should Prince Rupert be selected construction could start as early as late 2010 or 2011, but Somers said that it depended on the market and that, while a commitment means a facility is coming to Prince Rupert, it doesn’t necessarily mean it would be immediate."
We'll all just have to wait and see how these recent market developments impact on that decision process and what it may mean for the much ancticipated project for Ridley Island.

Globe and Mail-- Potash buyers' wallets closed
Globe and Mail-- Standoff over fertilizer prices imperils world food supply
Globe and Mail-- Downbeat on Potash Corp
Financial Post-- Potash Corp. workers in Saskatoon receive layoff notice
Financial Post-- Potash Corp. downgraded, risks remain
Regina Leader Post-- PotashCorp profits drop nearly $1 billion
Saskatoon Star Phoenix-- More bad news about potash
Saskatoon Star Phoenix-- Notable quotes from Potash Corp president and CEO Bill Doyle
Vancouver Province-- Potash Corp. profit dives 80% on low demand
Metro News Vancouver-- Potash giant announces layoffs for hundreds of workers in Saskatchewan
CBC News-- Potash Corp. plans 800 more layoffs
CBC News-- Agrium warns of Q3 profit plunge
CKOM News-- 'Not Surprised' About Layoffs

No comments: