Shifting product mix
Earlier, we discussed how Intrepid Potash’s (IPI) sales are weighted toward its potash products. Potash’s market (SOIL) includes big fish such as PotashCorp (POT), The Mosaic Company (MOS), and Agrium (AGU).
Here comes Trio
Over the years, Intrepid Potash has focused on langbeinite to mitigate the pressures from its potash product segment. As we can see in the chart above, over the years, Trio’s contribution to Intrepid Potash’s sales has increased. From 2012 to 2016, Trio’s share of Intrepid Potash’s overall sales rose from 11% to 24%.
In the company’s words
According to Intrepid’s recent 10-K filings, Trio is its “specialty fertilizer that delivers potassium, sulfate and magnesium in a single particle and has the added benefit of being low in chloride.”
In addition, the company states that it’s one of the only two companies that produces this kind of product, with the other being Mosaic.
Recently, the company moved toward transforming its East facility to produce Trio only. It believes that with the expansion of Trio, it can increase its margins as well as its cash flows.
Next, we’ll delve into Intrepid Potash’s shipment growth by product.