Israel Chemicals eyes cost cuts after potash price drop
Israel Chemicals (ICL) must become more efficient to deal with steep global declines in potash and phosphate prices, its chief executive said on Monday.
Stefan Borgas said that alongside a plan to significantly expand the company by investing in growing markets in China, Brazil, India and Africa, ICL must slash its costs.
"We have the potential to improve and the need to improve efficiency in our plants by several hundreds of millions of dollars delivered directly to the bottom line in the next two to three years," he told the annual Globes business conference.
ICL is the world's sixth-largest producer of the crop nutrient potash, of which prices slid 30 percent in the last six months in the wake of Russia's Uralkali saying in July it would quit one of the world's two largest potash cartels.
"This is a $500 million impact to the bottom line of ICL," Borgas said.
He said ICL was not competitive enough in phosphates, whose prices have fallen 40 percent the past half year, while costs have risen too much at its Dead Sea operations.
ICL plans layoffs in Israel, which Borgas said was the only way to survive.
He said ICL would continue to invest in potash in the Dead Sea, Spain and a new mine in the UK, while examining growth initiatives in agriculture, food and engineered materials.
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