The changing of the guard among fertilizer bosses spread to
Europe as Yara International revealed the departure of Joergen Ole Haslestad,
who will be replaced by the head of aluminium giant Norsk Hydro.
Mr Haslestad - chief executive of Norway-based Yara, the
world's biggest nitrogen group, since October 2008 - is to retire, and will be
succeeded by at the latest February 1 next year by Svein Richard Brandtzaeg,
currently the chief executive of Norsk Hydro.
The announcement is the latest in a series of departures of
fertilizer company chief executives, with Bill Doyle stepping down this month
as chief executive of Canada's PotashCorp after 15 years as chief executive.
Mike Wilson stepped down as head of Canada-based Agrium at
the end of 2013, as did Stephen Wilson as chief executive of US nitrogen group CF
Turn of the cycle
Fertilizer shares have lost of the high profile they gained
in 2008, when soaring crop prices, and the realisation of the need to raise
world food production to meet growth in demand from rising and increasingly
wealthy populations, focused attention on the sector.
Yara International shares in June 2008 hit a record high of
NOK473.50 in Oslo, well above the NOK291.00 at which they were trading at on Monday,
up 1.2% on the day.
Mr Haslestad's reign has spanned the end of the boom period,
through the global financial crash, through a period of price recovery until the
break-up of the Belarusian Potash Company potash cartel last year sent values
of all nutrients tumbling.
Other market trends that he has had to negotiate include the
rise in Chinese exports of urea, which has kept prices of the nutrient at about
$300 a tonne, well below peak 2008 rates above $800 a tonne, and the rise of US
That has fostered a US boom in investment in nitrogen plants,
which are energy intensive, relying on coal in China but on gas in many other
parts of the world.
The US, which imported 72% of its urea last year, may thanks
to the ramp up in production capacity become self-sufficient in the nutrient by
2017, Rabobank said last week.
Yara itself a year ago ditched $2bn plans for an expansion
at its Belle Plain plant in Canada, with Mr Haslestad warning of a "significant
risk of future nitrogen oversupply in North America as new project initiatives
However, Yara in October unveiled plans for a joint venture
with Germany's BASF on a "world scale" ammonia plant in Texas. BASF in May said
the project, which would have capacity for 750,000 tonnes, was "making good
Yara has also in Mr Haslestad's reign negotiated a bribery probe
which saw the group in 2008 fined NOK29.5m ($48.5m), besides seeing four
current and former executives – including Thorleif Enger Mr Haslestad's processor
as chief executive – charged on allegations of corruption, which they deny.
A court hearing is due next year.
Mr Haslestad has also led Yara through the troubles at
Burrup, the Australian nitrogen tie-up, at which its joint venture partner's
stake was put into receivership, and the failed attempt in 2010 to buy US-based
Terra Industries, losing out to a $4.7bn bid from CF Industries.
Leif Teksum, the Yara chairman, said that Mr Haslestad had "developed
Yara considerably since taking the helm", overseeing a jump of more than 50% in
sales and production, and leading "the transformation of Yara to being a
broad-based provider of commodity and value-added solutions both within
industrial, environmental and fertilizer market segments".
'Tough times and weak markets'
The appointment of Mr Brandtzaeg maintains Norwegian
prominence at Yara.
Indeed, Yara used to be a division of Norsk Hydro, before
being spun off a decade ago, and has as its top shareholder the Norwegian government, with a 37% stake.
Norsk Hydro's board said that it "regrets Brandtzaeg's
decision to leave the company", where he has "led the company through tough
times and weak markets, taking forceful actions to ensure that we are
positioned for a bright future as a leading, global aluminium company".
One of his highest profile recent steps at Norsk Hydro has
been to cut aluminium production costs by some $300 a tonne, in response to tumbling
prices of the metal.
Norsk Hydro shares eased 0.5% to NOK36.23.