Canpotex CEO sees potash terminal expansion decision late 2016
By Rod Nickel
WINNIPEG, Manitoba (Reuters) - The new chief executive of Canpotex Ltd expects the Canadian potash trader to decide around late 2016 where to expand West Coast terminal capacity, a move that could give it a faster route to Chinese buyers in a highly competitive market.
Options include building a C$775 million ($580.61 million) terminal at Prince Rupert, British Columbia, which would allow Canpotex to bypass busy Port Metro Vancouver and cut shipping times to China by two days, said CEO Ken Seitz, in an phone interview from Saskatoon, Saskatchewan.
"We never want ports to be the bottleneck, so we need sufficient capacity," Seitz, 46, said. "If we take a long-term view, we believe that to properly position ourselves, we'll need more port capacity somewhere."
Canpotex, owned by miners Potash Corp of Saskatchewan (POT.TO: Quote), Mosaic Co (MOS.N: Quote) and Agrium Inc (AGU.TO: Quote), could instead expand facilities at Vancouver, British Columbia or Portland, Oregon, he said. Canpotex accounts for about 20 percent of global sales of potash, used to fertilize corn and other crops.
The move to expand comes as potash prices decline amid weaker currencies in key markets Brazil and India. Germany's K+S AG (SDFGn.DE: Quote) is building Western Canada's first new potash mine in four decades, along with a port handling facility at Port Moody, British Columbia.
The Prince Rupert project has been in development for a few years, but Seitz said Canpotex will close in on a decision in the next six months. It may be ready to announce it around late 2016, he said.
The Prince Rupert port is served by Canadian National Railway Co (CNR.TO: Quote).