Punch Up In the Potash Industry (A): Agrium Inc.
(6 pages of text)
Uralkali, the giant Russian potash producer, decided to stop export sales through the Belarusian Potash Company – an export cartel it had formed with Belaruskali. Uralkali planned to increase potash production and export it independently through its own trading company. This move threatened to reduce global potash prices by up to 25 per cent. Immediately, the stock prices of major potash producers around the world plummeted. This set of three cases looks at the potential competitive strategies of three key players in the industry: PotashCorp, the firm with the world's largest potash reserves; Agrium, a firm in the midst of a large potash mine expansion; and BHP Billiton, the world's largest mining company planning huge potash mine development. See B case 9B14M031B
and C case 9B14M031C
Each of the three cases looks at the same event from a different firm's perspective. With one third of the class assigned to each case, students need to predict goals, objectives and future moves of competitors in order to determine the best strategy for their assigned firm going forward. This case looks at competitive rivalry in a global resource industry. It can be used in a competition class to illustrate the difficulty in achieving cooperation among players with different motivations. Though a stable (and somewhat limited) supply of potash would increase the global prices and company profits, the differing situations facing each player makes determining the best strategy difficult to predict.
Mining, Quarrying, and Oil and Gas Extraction
Canada; Russia, Large, 2013
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