12 September 2016, Jerusalem — Israel Chemicals (ICL) on Sunday named Asher Grinbaum as interim chief executive officer after Stefan Borgas stepped down as CEO last week.
German-born Borgas, 52, said last Thursday he would resign after four years as CEO but would stay available to the company and Chairman Johanan Locker during the transition to find a new CEO.
Grinbaum, currently ICL’s executive vice president and chief operating officer, will fill the CEO role effective immediately until a permanent CEO is appointed.
ICL is one of three major suppliers of potash to China, India and Europe.
Analysts said the eventual successor will struggle to revive earnings given weak global prices for potash, its main export.
“You can’t expect higher profit when potash prices are $200 a tonne,” said Ilanit Scherf, an analyst at the Psagot brokerage.
Borgas had served as CEO of Swiss firm Lonza before joining ICL. Potash prices were then around $414 per tonne, ICL’s share price was 46 shekels and it reported adjusted earnings per share of $1.19 in 2011.
But in recent months, ICL has signed potash supply deals with China and Indian customers at $219 and $227 a tonne, respectively.
Citi analyst Andrew Benson expects adjusted EPS in 2016 of just 30 cents.
“ICL faces a tough road ahead although this is substantially discounted in the share price,” Benson, who rates ICL “neutral”, wrote in a note to clients. The “fertiliser markets will remain intensely competitive over the medium term (and) … higher royalty levels will materially reduce cash flow availability for shareholders from 2017 onwards.”
Since the start of 2013, ICL’s Tel Aviv-listed share price has slid 85 percent to 15.42 shekels.
Borgas also battled Israel’s government over plans to sharply increase taxes on mining companies. He tried to cut costs, froze about $2 billion of investments in Israel and expanded ICL’s operations abroad.
Analysts say Borgas’ desire to reduce dependency on the Dead Sea, where ICL has exclusive permits to mine minerals, was unpopular with his bosses at holding company Israel Corp, which owns 46 percent of ICL.
Citi’s Benson said ICL’s next CEO will need to improve industrial relations after two recent strikes and establish a better relationship with Israel’s government.
ICL competes with Russia’s Uralkali and North American trading group Canpotex Ltd, owned by Potash Corp of Saskatchewan, Mosaic Co and Agrium Inc.
*Steven Scheer; editing – Susan Thomas/Ruth Pitchford – Reuters
