Agrium planning layoffs at Nikiski plant

Posted: Friday, April 18, 2003

NIKISKI (AP) The Agrium fertilizer plant here is expecting to announce layoffs in the coming weeks. The company says the layoffs are needed to stay competitive in the international fertilizer market.

It's not clear yet how many jobs will be eliminated, according to spokeswoman Lisa Parker. She said the job cuts are part of a corporate reorganization scheduled to occur by the end of the month.

The Agrium plant employs nearly 300 people with an average salary of $84,000 a year, producing an annual payroll of $25 million that is a big chunk of the Kenai Peninsula economy.

The company's process improvement team has determined that jobs must be cut in order for the plant to survive with lower supplies of natural gas, the plant's raw material, according to Parker.

Agrium uses natural gas to produce anhydrous ammonia and urea, which are used primarily for fertilizer.

Agrium bought the plant from Unocal in September 2000 with a supply agreement from the seller. But Unocal has cut supplies to the plant and Agrium has filed a lawsuit against the oil company over the cuts. Agrium also has found other suppliers.

Still, the Nikiski plant had to scale back production to about 75 percent of its capacity.

Jim Pendergast, Agrium's director of corporate relations, said the legal wrangles with Unocal are not necessarily related to the impending reorganization.

I really don't want to make any connection between the two,'' he said from Agrium's headquarters in Calgary, Canada. They're two different issues altogether. (But) everything has some connection to everything else. Obviously, lower gas delivery does affect your overall production.'' Pendergast said the reorganization at the Nikiski plant follows similar changes at some of the 15 other Agrium production facilities around the world. This particular reorganization will only impact the Nikiski plant, he said

In previous reorganizations, Pendergast said, the company has tried to avoid layoffs.

In some cases there were layoffs,'' Pendergast said. To the extent that we can, we used things like retirement.''

Parker said the decisions would be hard.

We're all friends and neighbors,'' she said. It's a tough decision. It's not a job that anybody would want to be tasked with.''

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