Potash Corp. (NYSE:POT), which is battling to keep from being taken over by BHP Billiton (NYSE:BHP), says a study commissioned by the Canadian province of Saskatchewan has tax revenue less than they believe it will be if BHP takes over the fertilizer company.
A report released by the Conference Board of Canada, said there would be "few" negative outcomes if BHP took over Potash, saying over a 10-year period they would amount of about $1.96 billion.
Potash lashed out at the findings, saying the figure was too low because the study didn't take into account BHP mining potash at full production.
What they mean by that is more potash on the market would lower prices, and ultimately margins, resulting in lower earnings. What Potash on the other hand neglects, is increased sales, even if at lower earnings, makes up for the loss of margins. Think Wal-Mart (NYSE:WMT) and how they turn inventory over to make up for lower margins.
So the idea there will be a lot of tax revenue lost is largely hypothetical, and can in no way be proven.
It seems there's really no reason BHP shouldn't be given the go ahead to acquire Potash other than a few people at the top of the company who may end up losing their jobs.
Otherwise the response by Potash isn't reasonable or logical. It's not that hard to figure out there's really not a reason for BHP to take over the company, and in the long run could be a major boon for farmers and others who would be able to acquire fertilizer at better prices, which would increase sales and tax revenue.
Showing posts with label Potash Production. Show all posts
Showing posts with label Potash Production. Show all posts
Tuesday, October 5, 2010
Monday, June 14, 2010
Mosaic (NYSE:MOS) May Acquire Mexican Fertilizer Company
Mosaic (NYSE:MOS) has been in negotiations to acquire Mexican fertilizer company Grupo Fertinal SA for the last several months, and word is they may be getting closer to making the deal.
There are reportedly other parties of interest, but Mosaic is probably the company which will land the deal.
Major potash producers like Mosaic are moving against the growing threat of BHP Billiton (NYSE:BHP), which has one of the premiere potash deposits in the world in Canada, and is set to begin production which will directly challenge the other major potash players like Mosaic.
This is probably the major impetus behind Mosaic seeking out other potash deposits through acquisition, as they can bring production online in a way that will immediately affect the the company's revenue and earnings.
The price being thrown around for the acquisition is about $1 billion.
There are reportedly other parties of interest, but Mosaic is probably the company which will land the deal.
Major potash producers like Mosaic are moving against the growing threat of BHP Billiton (NYSE:BHP), which has one of the premiere potash deposits in the world in Canada, and is set to begin production which will directly challenge the other major potash players like Mosaic.
This is probably the major impetus behind Mosaic seeking out other potash deposits through acquisition, as they can bring production online in a way that will immediately affect the the company's revenue and earnings.
The price being thrown around for the acquisition is about $1 billion.
Tuesday, June 8, 2010
BHP Billiton (NYSE:BHP) Major Potash Player
There hasn't been much noise or notice about the entry of BHP Billiton (NYSE:BHP) into the potash market, but that seems to be about to change as the reserve estimates for its potash mining project in Saskatchewan is huge, and will make them a force to be contended with in the global potash market for years into the future.
To add insult to injury to one of the major potash players, Potash Corp. (NYSE:POT), the project of BHP Billiton is located on the border of the Potash property named Lanigan. BHP's project is called Jansen.
Estimated reserves for BHP at Jansen are 3.37 billion tons of high quality potash, which includes over 25 percent potassium, the key ingredient which makes up potash.
Included with three other major potash mines currently under development, BHP is expected to produce over 20 million metric tons of potash annually, which would account for 40 percent of estimated global production in 2010.
To give an idea of how quickly that has happened, Potash Corp. produced 13 million metric tons in 2009. BHP has been at it for only about 2 years.
This would put them in the pricing drivers seat in regard to competitors and those they're supplying, which should be a big boost to the bottom line of the company.
Now it remains to be seen how the rest of the industry will respond to this major threat.
To add insult to injury to one of the major potash players, Potash Corp. (NYSE:POT), the project of BHP Billiton is located on the border of the Potash property named Lanigan. BHP's project is called Jansen.
Estimated reserves for BHP at Jansen are 3.37 billion tons of high quality potash, which includes over 25 percent potassium, the key ingredient which makes up potash.
Included with three other major potash mines currently under development, BHP is expected to produce over 20 million metric tons of potash annually, which would account for 40 percent of estimated global production in 2010.
To give an idea of how quickly that has happened, Potash Corp. produced 13 million metric tons in 2009. BHP has been at it for only about 2 years.
This would put them in the pricing drivers seat in regard to competitors and those they're supplying, which should be a big boost to the bottom line of the company.
Now it remains to be seen how the rest of the industry will respond to this major threat.
Tuesday, May 25, 2010
Potash (NYSE:POT) Among Most Efficient in their Industry
Potash (NYSE:POT) is among the most efficient companies in their industry, as its earnings for each employee stands at $219,591 over the last year. Revenue per employee during that same time period was $927,588.
Some other fertilizer companies did well too, as prices dropped they worked on cutting costs and streamlining their businesses.
Potash has said they're looking forward to stronger revenue and earnings in the growing season this year, and when addressing concerns over pricing pressures on potash fertilizer, CEO Bill Doyle said over the short term that is true, but going forward he sees a healthy price increase, and even today they're operating at margins over 60 percent.
Combining their efficiency and margins, it does look good going forward for Potash in the long term.
Some other fertilizer companies did well too, as prices dropped they worked on cutting costs and streamlining their businesses.
Potash has said they're looking forward to stronger revenue and earnings in the growing season this year, and when addressing concerns over pricing pressures on potash fertilizer, CEO Bill Doyle said over the short term that is true, but going forward he sees a healthy price increase, and even today they're operating at margins over 60 percent.
Combining their efficiency and margins, it does look good going forward for Potash in the long term.
Thursday, May 20, 2010
Potash (TSE:POT) CEO Sees Great Future Growth
Potash (TSE:POT) (NYSE:POT) president and CEO Bill Doyle said recently the company continues to focus on the long term, and he sees some great opportunities for growth going forward.
Doyle added, when talking at an investor conference, that they did nothing to cut back on expansion during the economic downturn, and that has positioned strongly for the future when demand soars.
Looking ahead, Doyle said he sees supply not being able to meet demand in 2012-2014, as North and South America, along with emerging market giants China and India, will need a lot of the fertilizer to meet their needs.
A number of the expansion project Potash is working on will be timed right to meet that growing demand, and the company is estimated to account for over 50 percent of production growth of potash over the next decade, and along with that get the majority of the business from the countries and farmers needing it.
Potash seems to be a good long-term play, as there's no doubt once things really do begin to turn around, that focus on meeting the food needs of growing populations will become a priority again.
Once that happens, Potash will have a more consistant and predictable future, rather than the recent ups and downs they've been experiencing.
Doyle added, when talking at an investor conference, that they did nothing to cut back on expansion during the economic downturn, and that has positioned strongly for the future when demand soars.
Looking ahead, Doyle said he sees supply not being able to meet demand in 2012-2014, as North and South America, along with emerging market giants China and India, will need a lot of the fertilizer to meet their needs.
A number of the expansion project Potash is working on will be timed right to meet that growing demand, and the company is estimated to account for over 50 percent of production growth of potash over the next decade, and along with that get the majority of the business from the countries and farmers needing it.
Potash seems to be a good long-term play, as there's no doubt once things really do begin to turn around, that focus on meeting the food needs of growing populations will become a priority again.
Once that happens, Potash will have a more consistant and predictable future, rather than the recent ups and downs they've been experiencing.
Thursday, May 13, 2010
Potash (NYSE:POT), Mosaic (NYSE:MOS) and World Food Demand
The price of potash has moved up and down with the economic conditions over the recent past, and that has held down companies with a strong exposure to the fertilizer like Potash (NYSE:POT) and Mosaic (NYSE:MOS).
Although in the short term it'll probably take some time to work their way out of this, in the long term, the future looks bright, as the growing need for fertilizers as the world population grows and needs a lot more food will strongly benefit fertilizer companies.
Global shipments of potash this year are estimated to be from 47 million to 50 million.
One unexpected positive demand is in Canada, where a mild spring and strong planting of canola - about 16.9 million acres - make it probable that even in the near term there will be a boost in potash sales. But the long term demand for food and fertilizer should make Potash Corp. and Mosaic very good investments.
Although in the short term it'll probably take some time to work their way out of this, in the long term, the future looks bright, as the growing need for fertilizers as the world population grows and needs a lot more food will strongly benefit fertilizer companies.
Global shipments of potash this year are estimated to be from 47 million to 50 million.
One unexpected positive demand is in Canada, where a mild spring and strong planting of canola - about 16.9 million acres - make it probable that even in the near term there will be a boost in potash sales. But the long term demand for food and fertilizer should make Potash Corp. and Mosaic very good investments.
Friday, May 7, 2010
Potash (NYSE:POT) Record Earnings in Five Years
Potash (NYSE:POT) CEO Bill Doyle recently said at their annual meeting, that the earnings of the company which reached a record in 2008, will be exceeded in the next five years.
The impetus behind the assertion is the increasing demand for potash and the company increasing its production to supply that demand.
By 2015, Potash should conclude it expansion of capacity at its potash mines, and the annual production will be twice what it was as of 2003, reaching about 17 million tons in five years.
This year potash production is expected to reach about 11.2 million tons.
The impetus behind the assertion is the increasing demand for potash and the company increasing its production to supply that demand.
By 2015, Potash should conclude it expansion of capacity at its potash mines, and the annual production will be twice what it was as of 2003, reaching about 17 million tons in five years.
This year potash production is expected to reach about 11.2 million tons.
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