K+S to pool salt, potash units amid overhaul

Berlin | Reuters — German minerals miner K+S plans to integrate its salt and potash units as part of a strategic overhaul, it said on Monday as it set itself a new profit target for 2030.

K+S, the world’s largest salt producer and the fifth-largest seller of potash, is grappling with a slow recovery in potash prices and output restrictions at its German mines.

Chief executive Burkhard Lohr has continued a company review started by his predecessor Norbert Steiner, who stepped down in May, and has been looking at ways to boost the value of its salt unit.

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“To this end, we examined all growth options with a no-holds-barred mindset,” Lohr said in a statement on Monday.

“We have reached an important milestone with the opening of the Bethune mine in Canada,” he said, referring to the company’s potash mine at Bethune, Sask., about 50 km northwest of Regina.

“It was the right time to develop a clear picture of how K+S is to be structured in 2030.”

A person familiar with the company’s thinking told Reuters last week that K+S would refrain from listing of its salt activities, after concluding a strategic review.

K+S will in future focus on four market segments — agriculture, industry, consumers and communities — to improve product development and target customers more effectively, it said on Monday.

The firm said it expects the overhaul to bring annual synergies of at least 150 million euros (C$220.4 million) by the end of 2020 and set itself a goal of three billion euros in earnings before interest, tax, depreciation and amortization (EBITDA) by 2030.

The Kassel, Germany-based firm had been targeting EBITDA of around 1.6 billion euros by 2020, but said it was unlikely to reach that after quarterly results missed forecasts in August.

The company’s shares were indicated two per cent higher after the strategy update.

Reporting for Reuters by Andreas Cremer. Includes files from AGCanada.com Network staff.

 

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