Agrium Business History
SMALL BUSINESS DISCOVERY
Divya Chakshu Instructor: Jay Fisher October 3, 2014Overview
Agrium is a retail supplier of agriculture products and services in North America and South America. It is the leading wholesale producer and marketer of all three major agricultural nutrients. The organization is also premier supplier of specialty fertilizers through its advanced technologies business unit. The organization is employing over 14, 000 workers in the company.
It is driven by growth whether the products or service is to improve the performance of crops that feeds …show more content…
the world responsibly, grows the business, the market share or the company’s earnings. Because of the company’s commitment to growth and diversification within the framework of financial discipline, they will endure as cornerstone of their long term strategy.
Agrium has divided the company in three strategic business units. They are nutrients for growth, solutions for growers and value through technology. (Who are We)
History
In 1931 Cominco Ltd enters fertilizer business in the Agrium Company. Along that the following years many more other fertilizing and crop companies started to enter the Agrium. Sherritt Gordon Fertilizers is the second to enter the company in 1954. Vanscoy Potash Operations open in 1969 and enter the business. Fort Saskatchewan Alberta plant opens in 1983. Comnico Fertilizers Ltd trades on TSE as a separate company in 1993. Crop Production Service is acquired in 1994. Cominco Fertilizers changes their name to Agrium Inc in 1995 during the same year Argentina Farm Centers opened. Western Farm Services is acquired along with Nu-West Industries. Viridian (Sherritt) Fertilizer assets were acquired while Agrium listed on NYSE in 1996. Kapuskasing Phosphate Mine begins production in 1999. Profertil S.A. comes on …show more content…
steam and Unocal nitrogen fertilizer operations are acquired in 2000. Astaris Production LLC assets (Nu-West’s Conda, Idaho phosphate operation) acquired in 2004. Western Canadian fertilizer distribution assets (Engro) from Imperial Oil required in 2005. Nu-Gro acquired, Royster-Clark acquired and Pursell Technologies Inc acquired in 2006. On 2007 19.6 percent equity in Hanfeng Evergreen Inc. is acquired and 32 locations from Archer Daniels Midland are acquired. United Agri Products is acquired, Beijing office had opened and 70 percent equity in Common Market Fertilizers S.A. acquired in 2008. Agronomics Decision of Turf Care Products Canada Ltd acquired and 26 percent of equity in the MISR Oil Processing Co., S.A.E (MOPCO) of Egypt acquired. Agrium Retail consolidates all North American operations under Crop Production Services and 24 outlet locations acquired from Agriliance in 2009. On 2010 33 retail outlets established in Western Canada to create Crop Production Services Canada. Before the end of 2010 it has expand all over Australia with over 350 locations acquired. (Agrium History- Summary)
What is the Actual or Estimated size of the Industry?
Company Revenue Market Share
Agrium Inc-0.06 17,199,880,000
CF Industries Holding, Inc-11.42 13,018,697,970
China Green Agriculture Inc-0.13 93,875,040
Yongye International Inc0.32 289,829,695
Agriculture Company’s Revenue and Market Share
(Agrium Inc. Competitors, 2013)
Mission
“To be one of the world 's leading providers of ingredients for growth by creating value for each stakeholder group.”
Vision
Agrium will make an increasingly positive impact on stakeholders while helping to feed the world responsibly.
In our opinion we believe that both the mission and vision for the company is appropriate. The mission is stating that they’re goal for what the company will have in the future with there products and services. Vision of the company is telling viewers that they are expecting after how many years of the organizations increasing market worldwide that they can help provide people the crops for their farms. Since we get most of our wheat, fruits and vegetables from planting and growing in farms the company vision can see that many business will want to invest or get their supplies from Agrium. (Agrium Mission Statement) INDUSTRY ANALYSIS Porter’s 5 Principles
Criteria – Threat of New Entrants Yes (+) No (-) Comment
1. Do large firms have a cost or performance advantage in your segment of the industry? Yes 2. Are there any proprietary product differences in your industry? No 3. Are there any established brand identities in your industry? No 4. Do your customers incur any significant costs in switching suppliers? No Not really
5.
Is a lot of capital needed to enter your industry? Yes There is a lot of technological capital needed.
6. Does the newcomer have any problems in obtaining the necessary skilled people, materials, or suppliers? Yes Maybe for the nitrogen containing fertilizers and all the advanced technology.
7. Are there any licenses, insurance, or qualifications which are difficult to obtain? No 8. Can the newcomer expect strong retaliation for entering the market? No Criteria – Bargaining Power of Buyers Yes (+) No (-) Comment
1. Is there a large number of buyers relative to the number of firms in the industry? No Because the products are only used on fertilized land for agriculture purposes
2. Do you have a large number of customers each with relatively small purchases? Yes As they are retailers too, they sell a lot to small farmers.
3. Does the customer face any significant costs in switching suppliers? No 4. Is there anything which prevents your customer from taking things in-house? Yes Chemicals are not safe to keep in
house
5. Your customers are not highly sensitive to price? No 6. Your product is unique to some degree or has accepted branding? Yes Criteria – Threat of Substitutes Yes (+) No (-) Comment
1. Substitutes have performance limitations which do not completely offset their lowest price or the performance advantages are not justified by the higher price Yes Agrium use the fine quality chemicals, which can also be obtained from substitutes but the quality will be compromised.
2. The customer will incur cost in switching No 3. Your customer has limited substitutes to choose from No There are companies who offer substitutes but it all comes to quality at the end.
4. Your customer is not likely to substitute Yes Criteria – Bargaining Power of Suppliers Yes (+) No (-) Comment
1. My inputs (materials, labor, supplies, services, etc) are standard rather than unique or differentiated No Inputs are very unique because of its fine quality nitrogen, phosphate and potash.
2. I can switch between suppliers quickly and cheaply No 3. I can substitute inputs readily No The inputs cannot be substituted readily.
4. I have many potential suppliers No Because Agrium do all the mining by itself.
5. My business is important to my suppliers Yes
Criteria – Competitive Rivalry Yes (+) No (-) Comment
1. The industry is growing rapidly No 2. There are significant differences between competitors No 3. My competitors are approximately the same size and capacity as me Yes As Agrium narrowly beated CF industries holdings in the year 2012 in terms of growth and market share.
4. My customer would incur significant cost in switching to a competitor No 5. The industry is in the early stages of the product life cycle No
Strengths
Only publicly traded company that crosses the entire agricultural chain.
Large market share in the industry
Availability of natural resources and technologically advanced
3rd largest nitrogen producer globally
Leading producer of nutrients Weaknesses
Negative Pro-Business Reputation
Not good relations with competitors
Negative media image
Opportunities
Expanding International level market
Expand operations to include planting and harvesting
Growing-end user demands in market
Identify and implement areas for continual improvement in Agrium’s EHS&S performance, good governance practices and building on our strong corporate culture Threats
Global Recession
Incoherent Government Policies
Production Risk
Climatic Conditions SWOT Analysis Ethics and Corporate Social responsibility
The type of organizational design we chose for Agrium is “Staffing and leadership style”. This style consists of skills that deal with high knowledge, good experience and the ability to motivate. Agrium’s overall management approach to sustainability includes “ governance, guidance and management”. http://www.agrium.com/sustainability/management_approach_management_approach.jsp(Agrium Management Approach)
Agrium doesn’t only have the ability to motivate employees in the company but they also do a good job self-motivating them selves. One of their management tools is to make commitments to them selves and to there stakeholders. “Once we make commitments, we develop plans to achieve them, and track our performance to ensure progress is made. Our internal targets address safety, employee development, and project implementation, among other priorities. Here’s how we’re progressing on our public sustainability targets”:
Priority Target 2012 Performance Progress Note
Greenhouse Gas Emissions Reduce North American Wholesale production emissions intensity 10 percent by 2020 over 2005 baseline 0.41 tonnes CO2e per tonne of net production Met target
Reduced 23 percent since 2005 Target was met due to a number of activities, primarily moving production from less to more carbon-efficient facilities
We are currently considering an updated target.
Community Investments Donate $7 million per year by 2015 $6.7 million donated On target We should meet this target by the end of 2013 http://www.agrium.com/sustainability/management_approach_commitments.jsp(Commitments) Agrium manages and operates a well-established succession management program that focuses on developing management talent from within. This program allows employees to advance within the company so that they can soon reach management levels in the long run. This program is effective because it gives employees the opportunity to manage there own team and able to use what they learned to guide them.
Bibliography
Agrium Inc. Competitors.(2013, February 21). Retrieved February 2013, from Nasdaq: http://www.nasdaq.com/symbol/agu/competitors#. USWOuqWTws5
Agrium History-Summary. (n.d.). Retrieved Feb 213, from Agrium: http://www.agrium.com/includes/Corporate_History_Summary_2011_AWB.pdfAgrium- Management Approach. (n.d.). Retrieved Feb 2013, from Agrium: http://www.agrium.com/sustainability/management_approach_management_approach.jspAgrium- Mission Statement. (n.d.). Retrieved Feb 2013. From Agrium: http://www.agrium.com/sustainabilty/mission_statement.jspCommitments. (n.d.). Retrieved Feb 2013, from Agrium: http://www.agrium.com/sustainability/management_approach_commitments.jspWho are We (n.d.). Retrieved Feb 2013 from Agrium: http://www.agrium.com/about_us/who_we_are.jspAgrium a look at Canada’s Top Miner. (2012). Canadian Mining Journal, 133(6), 22-25.
Retrieved from http://search.proquest.com/docview/1034976857?accountid=27351Agrium Decision Blow For Business Environment. (2008). Middle East Monitor: East M ed. 18(8), 3.
Divya Chakshu Instructor: Jay Fisher October 3, 2014Overview
Agrium is a retail supplier of agriculture products and services in North America and South America. It is the leading wholesale producer and marketer of all three major agricultural nutrients. The organization is also premier supplier of specialty fertilizers through its advanced technologies business unit. The organization is employing over 14, 000 workers in the company.
It is driven by growth whether the products or service is to improve the performance of crops that feeds …show more content…
the world responsibly, grows the business, the market share or the company’s earnings. Because of the company’s commitment to growth and diversification within the framework of financial discipline, they will endure as cornerstone of their long term strategy.
Agrium has divided the company in three strategic business units. They are nutrients for growth, solutions for growers and value through technology. (Who are We)
History
In 1931 Cominco Ltd enters fertilizer business in the Agrium Company. Along that the following years many more other fertilizing and crop companies started to enter the Agrium. Sherritt Gordon Fertilizers is the second to enter the company in 1954. Vanscoy Potash Operations open in 1969 and enter the business. Fort Saskatchewan Alberta plant opens in 1983. Comnico Fertilizers Ltd trades on TSE as a separate company in 1993. Crop Production Service is acquired in 1994. Cominco Fertilizers changes their name to Agrium Inc in 1995 during the same year Argentina Farm Centers opened. Western Farm Services is acquired along with Nu-West Industries. Viridian (Sherritt) Fertilizer assets were acquired while Agrium listed on NYSE in 1996. Kapuskasing Phosphate Mine begins production in 1999. Profertil S.A. comes on …show more content…
steam and Unocal nitrogen fertilizer operations are acquired in 2000. Astaris Production LLC assets (Nu-West’s Conda, Idaho phosphate operation) acquired in 2004. Western Canadian fertilizer distribution assets (Engro) from Imperial Oil required in 2005. Nu-Gro acquired, Royster-Clark acquired and Pursell Technologies Inc acquired in 2006. On 2007 19.6 percent equity in Hanfeng Evergreen Inc. is acquired and 32 locations from Archer Daniels Midland are acquired. United Agri Products is acquired, Beijing office had opened and 70 percent equity in Common Market Fertilizers S.A. acquired in 2008. Agronomics Decision of Turf Care Products Canada Ltd acquired and 26 percent of equity in the MISR Oil Processing Co., S.A.E (MOPCO) of Egypt acquired. Agrium Retail consolidates all North American operations under Crop Production Services and 24 outlet locations acquired from Agriliance in 2009. On 2010 33 retail outlets established in Western Canada to create Crop Production Services Canada. Before the end of 2010 it has expand all over Australia with over 350 locations acquired. (Agrium History- Summary)
What is the Actual or Estimated size of the Industry?
Company Revenue Market Share
Agrium Inc-0.06 17,199,880,000
CF Industries Holding, Inc-11.42 13,018,697,970
China Green Agriculture Inc-0.13 93,875,040
Yongye International Inc0.32 289,829,695
Agriculture Company’s Revenue and Market Share
(Agrium Inc. Competitors, 2013)
Mission
“To be one of the world 's leading providers of ingredients for growth by creating value for each stakeholder group.”
Vision
Agrium will make an increasingly positive impact on stakeholders while helping to feed the world responsibly.
In our opinion we believe that both the mission and vision for the company is appropriate. The mission is stating that they’re goal for what the company will have in the future with there products and services. Vision of the company is telling viewers that they are expecting after how many years of the organizations increasing market worldwide that they can help provide people the crops for their farms. Since we get most of our wheat, fruits and vegetables from planting and growing in farms the company vision can see that many business will want to invest or get their supplies from Agrium. (Agrium Mission Statement) INDUSTRY ANALYSIS Porter’s 5 Principles
Criteria – Threat of New Entrants Yes (+) No (-) Comment
1. Do large firms have a cost or performance advantage in your segment of the industry? Yes 2. Are there any proprietary product differences in your industry? No 3. Are there any established brand identities in your industry? No 4. Do your customers incur any significant costs in switching suppliers? No Not really
5.
Is a lot of capital needed to enter your industry? Yes There is a lot of technological capital needed.
6. Does the newcomer have any problems in obtaining the necessary skilled people, materials, or suppliers? Yes Maybe for the nitrogen containing fertilizers and all the advanced technology.
7. Are there any licenses, insurance, or qualifications which are difficult to obtain? No 8. Can the newcomer expect strong retaliation for entering the market? No Criteria – Bargaining Power of Buyers Yes (+) No (-) Comment
1. Is there a large number of buyers relative to the number of firms in the industry? No Because the products are only used on fertilized land for agriculture purposes
2. Do you have a large number of customers each with relatively small purchases? Yes As they are retailers too, they sell a lot to small farmers.
3. Does the customer face any significant costs in switching suppliers? No 4. Is there anything which prevents your customer from taking things in-house? Yes Chemicals are not safe to keep in
house
5. Your customers are not highly sensitive to price? No 6. Your product is unique to some degree or has accepted branding? Yes Criteria – Threat of Substitutes Yes (+) No (-) Comment
1. Substitutes have performance limitations which do not completely offset their lowest price or the performance advantages are not justified by the higher price Yes Agrium use the fine quality chemicals, which can also be obtained from substitutes but the quality will be compromised.
2. The customer will incur cost in switching No 3. Your customer has limited substitutes to choose from No There are companies who offer substitutes but it all comes to quality at the end.
4. Your customer is not likely to substitute Yes Criteria – Bargaining Power of Suppliers Yes (+) No (-) Comment
1. My inputs (materials, labor, supplies, services, etc) are standard rather than unique or differentiated No Inputs are very unique because of its fine quality nitrogen, phosphate and potash.
2. I can switch between suppliers quickly and cheaply No 3. I can substitute inputs readily No The inputs cannot be substituted readily.
4. I have many potential suppliers No Because Agrium do all the mining by itself.
5. My business is important to my suppliers Yes
Criteria – Competitive Rivalry Yes (+) No (-) Comment
1. The industry is growing rapidly No 2. There are significant differences between competitors No 3. My competitors are approximately the same size and capacity as me Yes As Agrium narrowly beated CF industries holdings in the year 2012 in terms of growth and market share.
4. My customer would incur significant cost in switching to a competitor No 5. The industry is in the early stages of the product life cycle No
Strengths
Only publicly traded company that crosses the entire agricultural chain.
Large market share in the industry
Availability of natural resources and technologically advanced
3rd largest nitrogen producer globally
Leading producer of nutrients Weaknesses
Negative Pro-Business Reputation
Not good relations with competitors
Negative media image
Opportunities
Expanding International level market
Expand operations to include planting and harvesting
Growing-end user demands in market
Identify and implement areas for continual improvement in Agrium’s EHS&S performance, good governance practices and building on our strong corporate culture Threats
Global Recession
Incoherent Government Policies
Production Risk
Climatic Conditions SWOT Analysis Ethics and Corporate Social responsibility
The type of organizational design we chose for Agrium is “Staffing and leadership style”. This style consists of skills that deal with high knowledge, good experience and the ability to motivate. Agrium’s overall management approach to sustainability includes “ governance, guidance and management”. http://www.agrium.com/sustainability/management_approach_management_approach.jsp(Agrium Management Approach)
Agrium doesn’t only have the ability to motivate employees in the company but they also do a good job self-motivating them selves. One of their management tools is to make commitments to them selves and to there stakeholders. “Once we make commitments, we develop plans to achieve them, and track our performance to ensure progress is made. Our internal targets address safety, employee development, and project implementation, among other priorities. Here’s how we’re progressing on our public sustainability targets”:
Priority Target 2012 Performance Progress Note
Greenhouse Gas Emissions Reduce North American Wholesale production emissions intensity 10 percent by 2020 over 2005 baseline 0.41 tonnes CO2e per tonne of net production Met target
Reduced 23 percent since 2005 Target was met due to a number of activities, primarily moving production from less to more carbon-efficient facilities
We are currently considering an updated target.
Community Investments Donate $7 million per year by 2015 $6.7 million donated On target We should meet this target by the end of 2013 http://www.agrium.com/sustainability/management_approach_commitments.jsp(Commitments) Agrium manages and operates a well-established succession management program that focuses on developing management talent from within. This program allows employees to advance within the company so that they can soon reach management levels in the long run. This program is effective because it gives employees the opportunity to manage there own team and able to use what they learned to guide them.
Bibliography
Agrium Inc. Competitors.(2013, February 21). Retrieved February 2013, from Nasdaq: http://www.nasdaq.com/symbol/agu/competitors#. USWOuqWTws5
Agrium History-Summary. (n.d.). Retrieved Feb 213, from Agrium: http://www.agrium.com/includes/Corporate_History_Summary_2011_AWB.pdfAgrium- Management Approach. (n.d.). Retrieved Feb 2013, from Agrium: http://www.agrium.com/sustainability/management_approach_management_approach.jspAgrium- Mission Statement. (n.d.). Retrieved Feb 2013. From Agrium: http://www.agrium.com/sustainabilty/mission_statement.jspCommitments. (n.d.). Retrieved Feb 2013, from Agrium: http://www.agrium.com/sustainability/management_approach_commitments.jspWho are We (n.d.). Retrieved Feb 2013 from Agrium: http://www.agrium.com/about_us/who_we_are.jspAgrium a look at Canada’s Top Miner. (2012). Canadian Mining Journal, 133(6), 22-25.
Retrieved from http://search.proquest.com/docview/1034976857?accountid=27351Agrium Decision Blow For Business Environment. (2008). Middle East Monitor: East M ed. 18(8), 3.