A slump in global demand for potash and phosphate, used in manufacturing fertilizer, is bad news for Israel Chemicals, Globes said Tuesday.
“Despite confidence in the long-term drivers of our business, a significant portion of fertilizer demand comes from developing markets where growth has been less robust than expected. This sluggish environment has been most visible in our potash and phosphate businesses, and has contributed to challenging market conditions,” said Canada’s Potash Corp. of Saskatchewan.
Potash Corporation owns 13.8% of Israel Chemicals, its second largest shareholder after Israel Corp., which owns 52.3%. Israel Chemicals has now sent layoff notices to 130 employees of its Rotem Amfert Negev unit.
“This is a clear statement that the crisis in the potash market is deep and prolonged,” says Excellence Brokerage senior analyst Gilad Alper. “When the company that was always the most optimistic … raises its hands, there are really no reasons for optimism in the short term. …Israel Chemicals will continue to be a very problematic investment in the short and medium term.”