Our strategy is our benchmark
Our strategic focus is on our core business with potash and magnesium products. Our focus on the environment, nature, and climate protection remains unchanged. Every business decision must be consistent with our climate strategy. In this way, we also ensure broad social acceptance of our actions.
Focus on potash and magnesium
Within the framework of the new strategy, K+S wants to optimize its existing business, expand and further develop its core business and establish new business segments. In an interview, K+S CEO Dr. Burkhard Lohr explains the focal points and goals of the new corporate strategy.
Our corporate strategy is characterized by three focal points:
We have developed a common understanding for allocating our management resources to these goals. With the sale of the Americas operating unit, the significant reduction in debt, and the restructur-ing of our organization, we have already achieved important mile-stones in the strategic realignment. We must, nevertheless, continue to strengthen our competitiveness, become more efficient, and act in a cost-conscious manner. That is why we will initially devote most of our energies to optimizing our existing business. In this way, we will establish the basis for the successful further development of our K+S.
Our strategic focus is on our core business with potash and magnesium. As a global supplier, we are therefore addressing the megatrends of nutrition, water, and energy.
Optimization of the existing business
At our Bethune and Zielitz sites, we produce potassium chloride as a standard product in an efficient and professional way. We are improving all processes at these sites in accordance with the strategic principle of cost leadership. Our goal is to consistently reduce production costs and increase competitiveness.
Our specialties are produced at the Werra and Neuhof sites. We will continuously optimize the product portfolio to serve our customers in the best possible manner. At the same time, our goal is to significantly reduce the carbon footprint in the manufacturing process.
In the salt business, we focus on operational improvements rather than strategic growth.
Optimizing our existing business also involves focusing on digitalization and automation along the entire value chain. We particularly anticipate potential in the production, sales, and supply chain areas.
Expansion and further development of our core business
Our products are of great importance for an ever-changing planet. High-yielding farmland is a prerequisite for feeding a growing world population, even under changing climatic conditions. We already supply the agricultural industry with numerous products to effectively increase yields and enable farmers to master challenges. Our portfolio is set to develop even further. This may not only include adjacent nutrients and biostimulants but also the further development of liquid fertilizers. Our water-soluble products already contribute to the cultivation of crops in hot and dry regions of the world — even in desert regions, and our nutrients are an important growth driver for irrigation under film and glass.
Our business model is supplemented by a comprehensive range of advisory and other services. In the future, digital services in particular will play an even greater role in our business. We will furthermore intensify our presence directly at the customer’s site in selected markets.
In expanding our core business, our primary focus is on organic growth and cooperation with strong partners.
The economic success of farmers is our benchmark. That’s why we are expanding our product portfolio, strengthening digital services, and intensifying our presence directly on-site.
Alternative uses for our infrastructure
The market for sustainable waste management solutions is growing. We have therefore established the REKS joint venture with a subsid-iary of the Remondis Group. In this joint venture, we combine the operations and unique infrastructure of our state-of-the-art waste management facilities with the sales network of our new partner. This business model also provides us with the best possible access to materials needed for covering our tailings piles in the future.
Moreover, we are assessing potential alternatives for leveraging our infrastructure. Our underground caverns, for example, have the mid- to long-term potential for CO2 or hydrogen storage.
Accomplish more together
Cooperation plays an important role in our strategy. When we join forces with partners, we can turn ideas into practice even faster. This applies to tapping into new markets as well as to product development and optimizing our existing business. In financing our growth and in our shareholder structure, we also count on reliable partners.
Our ambitious climate goals
Since 1990, we have already reduced our CO2 emissions by 80% — a major effort for an energy-intensive company. We want to continue to actively promote the energy transition. By 2030, our goal is to reduce our CO2 emissions by 10% compared with 2020.
Moreover, we support the goals of the Paris Agreement on climate change. We are convinced that climate neutrality can be achieved by 2050. This requires urgent improvements on the part of policy makers in the energy industry and energy policy. After all, energy must remain affordable for everyone.
Our financial targets
With our corporate strategy, we safeguard economic success in the future. We strive to achieve our financial targets based on a solid balance sheet.
- From 2023, each plant and the Group as a whole will generate positive free cash flow. We will therefore ensure consistently meeting the requirements and return expectations of our investors — even in the event of low potash prices.
- We want to earn our cost of capital over a cycle. At the same time, we aim to achieve an EBITDA margin of more than 20%.
With our strategy, we have set the course for the coming years. We will continue to promote and initiate numerous measures and projects within these strategic guidelines. With passion and commitment!
Our goal is for each of our plants to generate positive free cash flow from 2023 onwards, even in the event of low potash prices. We want to tap into new markets and business models based on a solid balance sheet.