Potashcorp

Company: Potash Corporation of Saskatchewan

Potash Corporation of Saskatchewan is the world’s largest fertilizer enterprise by capacity and producer of three primary plant nutrients potash, phosphate and nitrogen. Potash Corporations products serve a critical role in the production of agriculture, animal feed and industrialized chemicals. The company’s competitive advantage comes from a strategic advantage in the production of potash (K), higher quality phosphate rock (P) and low-cost natural gas contracts in nitrogen products. (N) In order to produce quality foods, plants need an optimal amount of all three nutrients of N, P, and K. The recommended ratio of N:P:K = 2:1:1 for maximum yield. (Sneddon & Webber 2009) Fertilizer should be applied every year to combat the continual depletion of nutrients during the harvesting period. Farmer may defers purchases of fertilizer for one or two years, but eventually they will need to apply more fertilizer to increase future yields. World population has doubled since 1950 and is expected to rise from 6.9 billion to 9 billion by 2050. (Potash Annual Report 2009) Increasing incomes will allow more people to participate in purchasing better quality food. A growing population will increase demand for more food production. Farmer will need to produce more to satisfy the growing world population and the aid of fertilizer will help them to achieve higher yield on less land.

Potash Corporation of Saskatchewan has shown a consistent increase in sales over the last several years.

Condensed Statement of Financial Performance ( in millions)

| 2005 | 2006 | 2007 | 2008 | 2009 |

Sales | 3475.6 | 3376.8 | 4464.0 | 8989.2 | 3657.6...