Norwegian Yara evaluates a new strategy for its South African business.
The new strategy includes optimising the logistics system, product portfolio and restructuring the plant in Potchefstroom.
The company’s planted area in South Africa has in recent years been reduced, resulting in decreased demand for fertiliser, growing oversupply and unsatisfactory profitability.
Company spokesman said: “The South African business was acquired by Yara in 2000. The reduction of planted area resulted from the company’s historical, competition and market reasons.\\$quot;
Due to the changed market situation, a new strategy is being considered. The new strategy involves an improved logistics structure, an upgraded product portfolio with a larger proportion of nitrophosphate NPK and a proposed closure of the chemical production in Potchefstroom.
Yara has initiated discussions with employee representatives and it is expected that the discussions could last up to six months before a final decision is made. According to the company spokesman, the closure of the chemical business could result in one hundred job loses.
Costs related to the potential restructuring are estimated to be less than NOK100 million (US $15 million).