Bill Doyle, President and CEO of PotashCorp answered questions yesterday regarding the impact of the split of the FSU potash joint venture, BPC. Doyle was anxious to set the record straight saying much of the reporting on the matter has gotten it wrong.
"Potash is not like shoes," Doyle said. "When you cut the price in half, people don't buy twice as much potash." This is the failing of the marketshare-over-price strategy, and he says he has seen it before even saying PotashCorp itself had adopted a similar strategy before he took over the company, "[PotashCorp] went nearly broke and that is how I came to the company back in 1987...That is when we went to a customer focused driven strategy, and the rest is history."
On the subject of Canadian export joint venture Canpotex, Doyle cited the exporter's efficiency, supply dependability and customer first attitude as the hallmarks of the company's success. Canpotex is comprised of PotashCorp, MosaicCo, and Agruim Inc. and is celebrating its 40th anniversary this year. All three players posted losses at the announced BPC breakup, but each has since leveled off, and the bulk of the damage seems to have been done.
When asked if Canpotex would match Uralkali's potash price to China, Doyle reiterated the intent of PotashCorp and Canpotex to stay their course and rely on the business model that has made PotashCorp the success it is today.
Doyle expects market players to take a moment and step back to see where prices land once the dust settles from the dramatic FSU split, but remains optimistic that 'business as usual' will keep PotashCorp on track. Dividend structures will remain intact, and production will be set by PotashCorp, not by FSU pricing wars or by anyone else.
"PotashCorp succeeds if its customers succeed," Doyle said, and while analysts and the media see the FSU split as cause for alarm, PotashCorp's leadership looks to the future optimistically, vowing to ride the horse that got them here, no matter what other producers may do. PotashCorp CEO Bill Doyle is not worried about the potash outlook and advises shareholders and farmers, "I just don't see the pressure that has been perceived in some dramatic headlines and a lot that has been written. I would just urge people to take a deep breath, relax; everything is going to be just fine."
Listen to the 24 minute discussion with PotashCorp CEO Bill Doyle here. It is worth a listen. *When you follow this link, you will be prompted to enter your name and email, but it is free to listen to the virtual meeting presented by PotashCorp.