Nutrien confident about potash prospects despite Sask. mine layoffs

Agriculture giant Nutrien says it's raising its expectations for potash sales this year, despite recent layoff announcements at its Vanscoy mine.

On Wednesday, the company announced it would be laying off 80 people later this year. However, in its second quarter financial results, Nutrien said it has increased its potash shipment projections for this year to between 65 and 67 million tonnes.

"Yesterday's announcement was the result of several months of fairly intensive analysis and planning," said Nutrien CEO Chuck Magro on an investor's conference call. "(The layoffs) really allow us to optimize our network, and of course reduce some costs, so it does improve our overall global competitiveness."

In a news release, the company said it would likely have between 50 to 70 vacancies at its other mines this year and will allow employees to transition to other jobs in the company.

"The announcement yesterday was more about rebalancing our product between our facilities as opposed to taking volumes out of the market," said Susan Jones, President of Nutrien Potash. "This whole shift of production value from Vanscoy to other sites will contribute to our overall synergy plan."

The company said it expected synergy savings between $80 to $100 million in its potash operations by the end of 2019. This fits in with Nutrien's goal of $500 million in savings by the end of next year.

In February, Magro said the company was not interested in phasing out some of its less-profitable potash mines in Saskatchewan, despite comments made from the company's then-executive vice-president of potash.

Nutrien said contract negotiations are continuing with buyers in China and India, and that any new prices would have to reflect price increases seen around the world.

Nutrien's financials showed net earnings of $741 million US as of the second quarter.