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Potash Corp. of Saskatchewan Inc. made the surprise appointment of a new chief executive officer with no fertilizer experience as the miner trudges through one of its most difficult periods in its history.
Jochen Tilk, the former chief executive of Inmet Mining Corp., has worked in the Canadian mining industry for more than 25 years and is recognized as a skilled operator who built his company into a respected metal producer.
But Mr. Tilk is unknown in the potash industry, where a handful of players have held sway over prices for decades and built their market share through negotiated deals with fast-growing economies like China and India.
He will become CEO as the Saskatoon-based company struggles to adjust to lower potash prices after Russian-based producer OAO Uralkali ended a partnership with its Belarus rival, a cartel-like arrangement to sell the fertilizer. Before the breakup, the Russian-Belarussian union along with Potash Corp. and its North American equivalent called Canpotex Ltd. controlled 70 per cent of the global potash market.
At Inmet, Mr. Tilk “did a good job of overseeing operations and I’m not sure that operations is the key issue [at Potash]. Marketing is key,” said Raymond Goldie, an analyst with Salman Partners.
It is unclear how Mr. Tilk will steer Potash Corp. when he replaces departing chief executive Bill Doyle in July.
Mr. Doyle is a legend in the fertilizer industry, having worked for the Canadian miner for 27 years. Mr. Doyle successfully blocked a hostile bid from Anglo-Australian mining giant BHP Billiton.
He was enraged after Russia’s Uralkali killed its marketing partnership to increase sales volumes at the expense of potash prices, calling it “the single dumbest thing that I have ever seen.”
With Mr. Doyle staying until mid-2015 to help with the transition, analysts expect the company to initially maintain its strategy of pricing over volume.
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