Reuters — Canadian fertilizer and ag retail company Agrium is not looking to broadly cut costs and staffing levels, but its drive to become more efficient could lead to some job losses, CEO Chuck Magro said.
As profits fall sharply, Agrium’s peers Mosaic Co. and PotashCorp have already announced major cuts to their respective workforces.
U.S.-based Mosaic said on Tuesday that it will eliminate 550 to 560 jobs in the next year, part of a plan to slash $500 million in costs over five years (all figures US$). [Related story]
PotashCorp said in December it would slash its workforce by 18 per cent, or more than 1,000 jobs. [Related story]
Magro, who assumed the top job at Agrium in January, said in an interview that the Calgary-based company is not looking at broad-based job cuts as a way to cut expenses.
“I don’t think you’re going to see us come out with a program that says we’re going to lay off 150 or 1,000 or whatever your number is, because we think we have to cut costs. That’s not where we’re heading,” Magro said. “We’re heading down a path of optimization and efficiency, more on the tune of continuous improvement more than anything.”
Such a review could lead to some job losses, but is not different than what Agrium has always done, Magro said.
“You can’t shrink yourself to success,” he said.
Fertilizer under pressure
Overall, the company’s workforce is likely to grow in the coming years due to expansion of Agrium’s Saskatchewan potash mine and Borger, Texas nitrogen plant, Magro said.
The company is also considering a sale of some non-agricultural assets from its turf and ornamental lines that may transfer some positions to the buyer.
Agrium reported on Tuesday a steep drop in first-quarter profit, hurt by a colder than usual winter across North America and a drop in fertilizer prices.
The company booked $2 million in net earnings (attributable to Agrium shareholders) on $3.079 billion in sales for the quarter ending March 31, down from $141 million on $3.156 billion in the year-earlier period.
The fertilizer sector has been under pressure since last summer’s breakup of one of the world’s biggest potash traders, Belarusian Potash Co., led to a steep drop in prices. Transportation problems in North America also dogged the industry during a colder than usual winter season.
The potash sector is widely seen as oversupplied after expansions by most major players and only modest annual growth in demand.
— Rod Nickel is a Reuters correspondent covering agriculture and agribusiness from Winnipeg. Includes files from AGCanada.com Network staff.