Bill Doyle is decrying the state of his former field, arguing the potash industry lacks strong leadership amid persistently weak prices. In an interview on BNN Monday, the former Potash Corporation of Saskatchewan chief executive said the industry has sacrificed prices at the altar of volumes, chasing larger market share instead of seeking to firm up market conditions for the underlying commodity.
“There’s just no one that’s stepped up to the plate that’s taking a leadership role,” he said. “Price is so much more important than volume and producing, according to the market. It’s one thing to pay lip service to it, it’s another thing to actually have the intestinal fortitude to do it.”
Prices of the fertilizer ingredient collapsed after Belarus’s Uralkali broke up the production cartel in 2013, effectively leaving producers to their own devices instead of seeking to balance supply and demand. Under Doyle, PotashCorp was considered the swing producer in the space, and was quick to curtail production when potash demand plummeted in 2009.
“We didn’t do it to be charitable, we did it because we understood that price is so important,” Doyle said. “Once you lose price, it take years, and years and years to get it back.”
Absent intervention on the production side, potash prices have been more than cut in half over the course of the last five years, driving shares of PotashCorp to $21 from its $78 peak in 2008. That weakened the company’s financial position, leaving it more exposed to the takeout offer from Agrium, which is expected to close later this year.
For the rest of this article: http://www.bnn.ca/ex-potashcorp-ceo-calls-out-industry-says-agrium-merger-is-sad-1.841120