Potash Corp. of Saskatchewan Inc. plans to move senior corporate officers not working in Saskatoon to the city from its satellite office near Chicago – and company CEO Bill Doyle is committing to spend the majority of his time in PotashCorp’s Saskatoon headquarters.
The change -Â part of the company’s new Pledge to Saskatchewan – means only the staff running PotashCorp’s phosphate, nitrogen and sales operations will be based in the United States, explained company CFO Wayne Brownlee Wednesday morning in Saskatoon.
“We can say with complete conviction now that the mind and the heart of the company will be based in Saskatoon,” Brownlee said.
The details come as PotashCorp revealed its pledge to its namesake province – a seven-point mandate, which includes maintaining a strong and vital corporate headquarters in Saskatchewan, a commitment to Canpotex and provincial revenues and the development of a strong aboriginal workforce – earlier in the day.
Brownlee spoke about the pledge following the presentation of a $500,000 cheque to the Friendship Inn in support of the soup kitchen and social support centre’s Friends In Deed capital campaign.
The Friendship Inn has now raised $1 million of its $3-million goal following the launch of PotashCorp’s gift-matching challenge in June. The funds will go toward an expansion of the centre.
The CFO said the company announced the pledge as a way to clear up misinformation about the company circulating in the city.
“It’s in response to the various noise that’s out there in the community and the political arena and it’s important for us to clarify what those actions are,” Brownlee said.
The pledge also acts as a guideline as to what the company and the province expects from the potash producer for the third parties PotashCorp has been in talks with regarding a potential alternative bid to BHP Billiton’s proposed takeover.
While PotashCorp’s head office issue has been the subject of much debate in Saskatoon since BHP Billiton’s bid was announced in August, Brownlee says it’s not the topic people should be concerned about.
“I know there is a lot of attention on the head office issue, but frankly people are missing the boat – that is not the key issue from an economic or revenue stream perspective for Saskatchewan.”
The CFO says Saskatchewan residents should be thinking about the economic activity of the company over the long-term and whether or not its product will continue to be sold through Canpotex.
Speaking in Regina, Premier Brad Wall told reporters at the legislature that PotashCorp’s pledge was “encouraging, obviously,” but said he wanted more details from what he called a “fairly general news release.”
“I think we could have more of the senior officers, all of the senior officers, should be in the province of Saskatchewan if it’s a head office. I think that makes a lot of sense,” he said in describing the government’s desire for a more “robust” head office in Saskatoon.
Last week, Energy and Resources Minister Bill Boyd suggested the government was prepared to act – perhaps through legislation – to boost PotashCorp’s head office presence no matter who ends up owning the company. And Wall has also mused about using the force of government to ensure benefits such as PotashCorp remaining in the Canpotex marketing agency.
Wall said that even with the pledge, everything remains on the table for the government as it tries to ensure the province benefits from any deal.
“We’re looking at all of our options . . . Some of the options may be limited by international free trade agreements but we’re looking at every single option we have from a legislative standpoint, from the standpoint of licence, from the standpoint of taxation,” he said, acknowledging the government already has an incentive policy to encourage head office jobs to be relocated to the province.
BHP Billiton questions timing
Graham Kerr, president of BHP Billiton’s diamonds and specialty products division, questioned the timing of the release of PotashCorp’s pledge. Kerr was speaking at a North Saskatoon Business Association (NSBA) luncheon on the relationship between BHP Billiton and Saskatchewan and the commitments the company would make to the province if its $38.6 billion US bid for PotashCorp is successful.
“I do think the timing is quite interesting in terms of how that’s actually playing out, but we continue to focus on why we think we’re the best potential owner of these resources,” Kerr said.
The division president said BHP Billiton is now working with the University of Saskatchewan to develop a mining centre of excellence in addition to its other local commitments, such as making Saskatoon its global centre for potash and initiating an aboriginal hiring initiative.
Like PotashCorp outlined in its pledge, BHP Billiton said if it wins its bid for the company, it too would move all potash-focused employees from the Chicago office to Saskatoon.
Kerr added BHP Billiton’s cash proposal for PotashCorp remains the only offer on the table.
“I think Potash is a good strategic fit for the company. We do believe it’s a growth commodity,” he said.
“I think we’re a very disciplined organization. We’ll pay what we think is a fair value for our shareholders – we won’t pay a penny more.”
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