Agrium Inc. has named an insider as its next chief executive, handing the reins to Charles Magro at a time when the company faces lower sales and prices for its key fertilizer products.
Michael Wilson, 62, will retire in December after 10 years in the top job at the Calgary-based company that produces and sells nitrogen, phospate and potash for the agricultural and industrial use. Mr. Magro, a chemical engineer with an MBA, currently serves as Agrium’s chief operating officer.
The potash industry has been in turmoil since the summer, when Russia’s OAO Uralkali quit Belarusian Potash Co., the eastern European group that markets the crop nutrient. The move, expected to prompt a 20-per-cent drop in potash prices, caused share prices in North American producers to fall. Agrium warned in September that third-quarter sales would fall by as much as 30 per cent as analysts warned profits for the entire sector could get hammered.
“He’s stepping into a lot of uncertainty in the fertilizer market,” said Spencer Churchill, an analyst at Paradigm Capital in Toronto. “Fertilizer prices have been weak since the beginning of the year. The situation in Europe complicates things, but it’s not something that’s a brand-new situation for him to deal with.”
Mr. Churchill said Mr. Magro’s apointment was no surprise and will likely not signal a major change in direction for the company. He said Mr. Magro’s big task will be reassuring markets the company is on sound footing, and that its 23-per-cent share-price decline since January is unwarranted.
An Agrium spokesman said Mr. Magro and Mr. Wilson were not available to comment on Tuesday.
Mr. Magro was named Agrium COO in 2012 after serving as executive vice-president. He previously worked for Nova Chemicals.
He replaces a CEO who spent almost a year fending off Jana Partners, an activist shareholder from the United States. The hedge fund waged a 10-month fight to replace Agrium board members with its own slate and was pushing to drive up Agrium’s profit and share price by splitting the retail and wholesale divisions. The retail business generated $11.5-billion in sales in 2012, compared with $5.5-billion for the wholesale unit.
The company won the proxy fight in April, but not before the feud’s acrimony made headlines. In February, Mr. Wilson called it a “pain in the arse.” Jana founder Barry Rosenstein later accused the comany of playing “dirty” to defend its grip on the boardroom, and said the fight was not over. According to Bloomberg data, Jana remains Agrium’s biggest shareholder.