Canada’s Nutrien, the world’s largest fertilizer producer, said on Thursday it plans to increase potash production to an annual 18 million tonnes by 2025 to mitigate supply uncertainty from Eastern Europe.
Prices of potash have soared since Western sanctions were imposed against Russia and ally Belarus after Moscow’s invasion of Ukraine, crimping an already tight market.
Russia and Belarus are the world’s second- and third-largest producers of the commodity, while Canada is the No. 1 producer.
“The challenge of feeding a growing world has never been clearer as global supply constraints have contributed to higher commodity prices and escalated concerns for global food security,” said Ken Seitz, Nutrien’s interim president and CEO.
“We see potential for multi-year strength in agriculture and crop input market fundamentals.”
The increase in potash production represents a rise of more than 5 million tonnes, or 40% compared to production in 2020, Nutrien said.
The potash ramp up will be through Nutrien’s existing low-cost capacity with incremental production capability expected to be added at a similar annual pace as seen over the past two years.
The company added its annual nitrogen sales volumes could increase to about 13.5 million tonnes by 2027.
Nutrien, which will host a virtual investor day on Thursday, also said it plans to repurchase an additional $2 billion worth of shares.
The buyback is expected to increase the company’s total returns to shareholders through dividends and share repurchases to about $5 billion in 2022.
(Reporting by Rithika Krishna in Bengaluru and Rod Nickel in Winnipeg; Editing by Maju Samuel and Vinay Dwivedi)