PotashCorp Announces Strategic Partnership with Sinochem Corporation's Fertilizer Business (Sinofert) Listed: TSX, NYSE Symbol: POT SASKATOON, SK, June 6 /PRNewswire-FirstCall/ -- Potash Corporation of Saskatchewan Inc. (PotashCorp) today announced that it has reached agreement with a subsidiary of Sinochem Corporation (Sinochem) to purchase a 9.99 percent interest in Sinochem's fertilizer business (Sinofert). Sinochem had previously announced in January 2005 that it would reorganize and place its fertilizer business, with certain exceptions, into a publicly traded company which is currently listed on the Hong Kong Stock Exchange. PotashCorp's investment is subject to the fulfillment of various conditions, including the completion of the reorganization and a securities offering, which is expected to occur in July 2005. Under the terms of the agreement, PotashCorp will also hold an option to purchase an additional 10.01 percent interest within the next three years. The cost of the initial investment is not yet determinable, as it is based on the institutional bookbuild price in the forthcoming private placing, subject to a cap. The price for the shares subject to the option will be determined by the prevailing market price at the time of exercise. The investment is subject to customary conditions to completion. Sinofert, a key Canpotex customer, is the largest importer of fertilizer products in the People's Republic of China (PRC) in terms of import volume and the largest integrated distributor of fertilizer products in terms of sales volume in the PRC. In serving China's rapidly expanding market, Sinofert relies heavily on potash imports from Canpotex due to limited indigenous resources. A substantial portion of its sales volumes, revenues and gross margin are from potash sales. "This is part of our 'potash-first' strategy and extends our delivery pipeline directly into the world's largest fertilizer market," said Bill Doyle, PotashCorp's President and CEO. "Sinofert accounts for 60 percent of all the fertilizer imported into China through a state-of-the-art distribution system. We have great confidence in CEO Mr. Du Keping and his management team and believe PotashCorp and Sinofert will be a very strong business combination. This allows us to make our first substantial footprint in China, and we are proud to partner with a company as rich in history and success as Sinofert." Sinochem Corporation, one of the oldest and largest state-owned conglomerates in China, will be the indirect controlling shareholder of the new public company. PotashCorp will be entitled to appoint one board member with its initial investment, and a second if the option is fully exercised. Additional details relating to the reorganization of Sinofert and securities offering can be found in its shareholder circular, which will subsequently be released. Potash Corporation of Saskatchewan Inc. is the world's largest fertilizer enterprise producing the three primary plant nutrients and a leading supplier to three distinct market categories: agriculture, with the largest capacity in the world in potash, third largest in phosphate and fourth largest in nitrogen; animal nutrition, with the world's largest capacity in phosphate feed ingredients; and industrial chemicals, as the largest global producer of industrial nitrogen products and one of only three North American suppliers of industrial phosphates. This release contains forward-looking statements, which involve risks and uncertainties, including those referred to in the company's annual report to shareholders for 2004 and in filings with the U.S. Securities and Exchange Commission and Canadian provincial securities commissions. A number of factors could cause actual results to differ materially from those in the forward- looking statements, including, but not limited to: fluctuation in supply and demand in fertilizer, sulfur, transportation and petrochemical markets; changes in competitive pressures, including pricing pressures; risks associated with natural gas and other hedging activities; changes in capital markets; changes in currency and exchange rates; unexpected geological or environmental conditions; and government policy changes. DATASOURCE: Potash Corporation of Saskatchewan Inc. CONTACT: Betty-Ann Heggie, Senior Vice President, Corporate Relations, Phone: (306) 933-8521, Fax: (306) 933-8844, E-mail: , Web Site: http://www.potashcorp.com/

Copyright