Facing market pressure, company will also take production hiatus at several Saskatchewan sites
SASKATOON—Emerging market concerns have forced PotashCorp to lower its fourth-quarter production forecast by approximately 500,000 tonnes. In response, and to match supply with demand, the company is accelerating the permanent closure of its Penobsquis mine in New Brunswick to the end of November, while planning to implement temporary shutdowns of three Saskatchewan mines in December.
“Broader emerging market concerns have weighed on customer sentiment, contributing to a weaker fertilizer environment in the second half of 2015,” PotashCorp president and CEO, Jochen Tilk, said.
Tilk added that despite the reduction to production levels, the company does not expect to implement employee layoffs.
The accelerated closure of its Penobsquis site coincides with the ramping up of production at the nearby Picadilly mine and is expected to improve the company’s cost profile by helping to manage inventories.
Facing economic uncertainty, the company maintained its 2015 forecast of 58 to 60 million tonnes shipped, but admitted reaching the high end of this range will be a tall order.
“Despite challenges over recent months, we are seeing signs of a shift in focus by distributors and farmers to 2016,” Tilk said. “We believe the need for increased global agricultural production – coupled with supportive crop prices – provides a compelling opportunity for farmers.”