SASKATOON — Potash Corp. of Saskatchewan says it’s making good on a promise it made to the province during a bitter takeover fight with BHP Billiton.
PotashCorp (TSX:POT) said Monday that 11 of its 14 senior executives, including CEO Bill Doyle, will be living in Saskatoon by the end of March.
Doyle said in a letter to Premier Brad Wall that the company recognizes the importance of the province.
“Though our company is a global organization with operations, investments and customers all over the world, potash is the lifeblood of our business and Saskatchewan will continue to be the heart and mind of the company in the years ahead,” he wrote.
The promise to move executive jobs to Saskatoon from Chicago was made last October as PotashCorp attempted to curry favour with the province and fend off BHP’s US$38.6-billion bid.
PotashCorp is headquartered in Saskatoon, but many of the company’s executive and managerial jobs are currently in Chicago. While the board of directors is mostly Canadian, most senior managers are American.
With the moves announced Monday, the only executives working in Chicago will be primarily responsible for the company’s phosphate and nitrogen operations.
PotashCorp also said it will boost the number of employees in the Saskatoon office to 300 by the end of 2013 — up from 209 at the end of last year. The company also plans to increase the number of people working at its mines in Saskatchewan to 2,528 within four years from just over 2,000 last year.
Wall said the job increases represent a major commitment to Saskatchewan.
“That’s more than 600 more people working for PotashCorp in Saskatchewan by 2015,” said Wall. “PotashCorp is an important part of the new era of growth in the new Saskatchewan and I thank them for their strong commitment to our province.”
PotashCorp has also promised to be “the No. 1 corporate citizen in Saskatchewan,” to develop a strong aboriginal workforce and to maintain ties to the marketing consortium Canpotex.
“We believe that the long-term relationships Canpotex holds, and the efficiencies it delivers in the distribution of Saskatchewan potash, bring tremendous value to customers and facilitate the generation … of significant revenues for our province,” wrote Doyle.
“Further, as demand for potash continues to grow, Canpotex is uniquely positioned to meet the logistical needs of its offshore customers.”
Potash is a key component in fertilizer, and global food needs are expected to drive the demand higher.
PotashCorp is a Saskatchewan stalwart. It was created by the provincial government in 1975 and privatized in 1989.
The company has since become the world’s biggest producer.
Saskatchewan is the largest potash producer in the world and typically accounts for about 25 to 30 per cent of global production. By conservative estimates, Saskatchewan could supply world demand at current levels for several hundred years.
BHP, an Australian mining giant, had also promised to make Saskatoon the headquarters of its global potash business.
But Wall was dead set against the deal. He argued that Saskatchewan could lose between $3 billion and $6 billion in revenue from taxes and royalties if BHP’s bid were successful. The premier also said Canada’s strategic interests would be put at risk if it sold most of its potash industry to an international company.
The federal government ultimately rejected the BHP offer. Industry Minister Tony Clement said it was unlikely to be of net benefit to Canada.
BHP, however, hasn’t turned its back on potash in Canada. The company has exploration rights to over 14,500 square kilometres in Saskatchewan. Earlier this month, BHP moved to do a feasibility study on its Jansen potash proposal.
Doyle said Monday that Potash Corp. remains committed to a $5.7-billion mine expansion in Saskatchewan, including a $2.8-billion expansion at Rocanville.
“We understand the strong and mutually beneficial role that our company plays in the province, and we will always seek to do what is right for the people of Saskatchewan and the company’s stakeholders,” he said.
“We look forward to continuing to play a vital role in the province of Saskatchewan for decades to come.”
— By Jennifer Graham in Regina