Long-term outlook for Potash Corp strong: CEO
Potash Corporation of Saskatchewan says a fourth-quarter slowdown spilled into the first quarter of this year, but agricultural fundamentals are solid and it expects a strong second quarter in 2012. It also doubled its dividend to 14 cents.
CEO Bill Doyle points to uncertainty caused by the European debt crisis as the main reason why farmers pulled back on their fertilizer spending.
“The fundamentals of agriculture are very good. You’ve got extraordinarily high crop prices that are screaming out to farmers around the world to apply fertilizers to take care of the profit opportunity they have in front of them,” Doyle says.
Worldwide, there is pressure on the food supply in large population centres, and food security is a significant issue, he says. “The need to get yields up is an imperative one in these countries, and they’re going to be working at it hard." He adds that the problem of food security needs to be addressed through fertilization.
He says Potash Corp began its expansion in 2003 based on the demand it foresaw in 2011 and beyond. Competitors talking about expanding now won’t be ready to add capacity until 2018 or 2019. “Potash Corporation is going to be depended on by a lot of food consumers around the world for their daily bread.”