Nutrien Ltd (NYSE:NTR), the largest global producer of potash fertilizer, is exploring the sale of its operations in Argentina, Chile, and Uruguay as part of a strategic overhaul in South America, Reuters reported on Thursday.
The move follows significant financial losses in the region and the departure of key management personnel, including the CEO and CFO for Latin America.
The company has faced challenges in the Brazilian farm retail market, leading to a reevaluation of its strategy and operations across Latin America.
In Brazil, Nutrien's attempt to expand through acquisitions and introduce a unique business model did not go as planned, marred by logistical issues and difficulty in managing farm input supplies.
Last year, Nutrien recorded a $465 million impairment charge on its South American acquisitions, which analysts attributed to a decrease in the value of its fertilizer inventory.
"As a new business, structural and leadership changes are part of the growth journey," Nutrien reportedly told Reuters.
These problems led to delays in deliveries and discontent among local farmers, which, combined with high inventory costs due to market volatility, notably impacted the company's bottom line.
The restructuring in Latin America, including the potential divestments and management changes, comes in the wake of global fertilizer market disruptions caused primarily by geopolitical tensions and supply chain uncertainties. Affected fertilizer prices and availability, these disruptions prompted companies like Nutrien to reassess their operations and strategies in affected markets.
Nutrien has acknowledged these challenges, stating that adjustments are being made in response to the changing macroeconomic environment. This includes exploring partnerships to increase the utilization of its blending facilities in Brazil, aiming to improve efficiency and adapt to the current market conditions.
NTR shares ended Thursday trading 1.3% higher.