Mosaic`s First Nations Supplier Strategy

Safe Harbour Statement
MOSAIC… Who we are…
Global producer of crop nutrients
• #1 Phosphate producer in the world
• #2 Potash capacity in the world
Vertically integrated
• Mining, production & distribution
Formed in 2004
• New company with significant
industry experience
World’s Largest Integrated Phosphate Producer
Leading Global Potash Producer
Potash Production Locations
Colonsay
Esterhazy K1
Colonsay
Shaft
Belle Plaine
Esterhazy K1 & K2
Shaft
Esterhazy K2
Belle Plaine
Solution
Hersey
Solution
Carlsbad
Carlsbad
Shaft
Mosaic Facilities
Red Muriate of Potash
White Muriate of Potash
K-Mag ®
Hersey
Potash Production Capacity
Colonsay
Esterhazy K1
Million Tonnes
Belle Plaine
Esterhazy, SK
Belle Plaine, SK
Colonsay, SK
Carlsbad, NM
Hersey, MI
Annual Capacity
5.3
2.8
1.8
1.7
0.1
11.7
Carlsbad
Excluding Toll Production 10.4*
* we produce potash at our Esterhazy
mine for a third party
Esterhazy K2
Hersey
Noteworthy Mosaic Facts
The Esterhazy operation is the largest potash production facility
in the world!
The Belle Plaine operation is the pioneer of unique solution
mining technology and is the largest potash solution mine in the
world!
The Saskatchewan operations also produce high quality, industrial
products and Mosaic is recognized around the world as a leader in
the industrial potash market.
The Carlsbad mine also produces K-Mag,
a branded specialty fertilizer containing
potassium, sulphur and magnesium.
Esterhazy Underground Footprint
4,700 km of tunnels
Mosaic Esterhazy – the largest
underground potash mine complex
in the world !
Community Involvement
Community Involvement
Strategic Message
global economic recovery, business continues
to improve
operating earnings up from last year
increased global demand for phosphate and
potash
Phosphate and Potash sales volumes up, lower
phosphate raw material costs
secure additional phosphate rock beyond North
America
advance our potash capacity expansions in
Saskatchewan
Mosaic is well-positioned, expect continued
improvements in financial results as we meet
the world’s growing demand for food
Strategic Focus
Phosphate Strategic Priorities
Potash Strategic Priorities
Shift in Business Mix (sales tonnes)
Potash Expansions
Potash Expansions
Growth from 10.4 to 16.8 million tonnes
Location
Estimated
Annual
Capacity
Increase
Estimated
Completion
(tonnes millions)
Belle Plaine
2.0
2015 - 2020
Esterhazy
1.8
2013 - 2016
Colonsay
1.3
2011 - 2017
Total
5.1
Potash Expansions
EPCM contractor for:
Colonsay Expansions
Esterhazy Expansions
Mosaic is directly involved in all
decision-making for EPCM projects
Mosaic Engineering
EPCM function for
Belle Plaine Stage 1 Expansion
EPCM contractor for
Belle Plaine Stage 2 Expansion
Potash Expansions
Belle Plaine - Expansion Update
Compaction expansion is nearing completion
Expansion first half is under construction
Expansion second half engineering underway
Belle Plaine Expansion
Esterhazy Expansions
New compaction plant complete
K2 & K1 expansions nearing completion
New K3 Shafts, nearing the end of FEL3 & Engineering well
underway
K2 Compaction plant
K1 crushing expansion
Esterhazy K2 Expansion
Esterhazy K2 Expansion
Esterhazy Expansion – K3 Site
Expansion Challenges
Manpower
• Construction
• Full time new positions
• Retirement replacements
Equipment delivery & lead times
Infrastructure
Safety
Potash News
Mosaic Wins ABEX Award for Expansion
Manpower
The 2010 ABEX Awards were presented
this past Saturday night in Regina and
Mosaic took home the trophy for Growth
and Expansion.
Mosaic Potash Leadership Team
Members Brad DeLorey, Darrell
Zwarych, Norm Beug and Gerry
Couture
The award is presented to the business
which best exemplifies a commitment to
exceptional development and capital
investment in the province.
Mosaic Positioned for Demand Recovery
Spend Perimeter
1
2
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Vendor expectations
Understand Mosaic’s expectations…
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You are us…in approach, mentality and actions
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You know more than us…help all of us to innovate
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Business today requires near flawless execution
•
Markets always turn, we need to remain focused
Engage vendors on critical quality requirements
Bolster relationships within and across our network
Safety is an inter-company responsibility/mandate
Vendor Selection (continued…)
Vendor Qualification
Business Award Criteria:
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•
•
•
•
•
•
•
•
•
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Safety qualification
TCO (Total Cost Model)
Technical Expertise and knowledge
Previous Knowledge
Available resources
Value Added Services
Competitive price and service
Legal review
Diversified workforce
Capability to deliver/complete on time
Vendor Score Card
Vendor & Contractor Selection
What it takes to conduct business with us, some award
winning criteria…
Pre-Qualification forms and complete all pre-qualification requirements
Capabilities – can you deliver the work and complete it on time. Do you have
available resources & manageable resource loads
ISNetworld Registration and compliance, Safety Programs, safety
qualifications & safety performance
Financial strength & stability, Insurance, WCB standing, Legal review and
compliance, references & work history
Low cost, competitive pricing. Consolidation, standardization, synergies
Technical Expertise and knowledge
Local, Regional, Diversified and Representative workforce and Value Added
Services
Performance targets and measurements – walk the talk!
Mosaic Code of Conduct & Business Ethics
Requires that all Employees, Agents, Officers and Directors:
Comply with ALL applicable laws
Not assist third parties in violating any laws
Not pay or receive bribes or participate in any other unethical,
fraudulent or corrupt practice or business behavior
Honor all business obligations; absolute integrity
Keep accurate business records, ones that accurately reflect all
business transactions
Take responsibility for preventing, detecting & reporting violations
Avoid any conflicts of interest
Certify compliance with the Code annually
Mosaic Code of Conduct & Business Ethics
(continued…)
Take the time to understand our Code (please refer to Mosaic’s
website)
http://www.mosaicco.com/suppliers/
Conduct business in a manner in adherence with and
complimentary to our Code
Understand…we will not tolerate situations where supplier’s
actions put Mosaic at risk of any Code violations
Realize that Mosaic will investigate potentially inappropriate
conduct; if this does arise, you will be required to cooperate with
us fully in this regard
Expectations of Suppliers & Contractor’s…
Understand us… you are Mosaic in approach, mentality & action
Safety is paramount, it is a company mandate. Operate within all
Safety standards
In many ways, you know more than us…be innovative and let’s
save money
Quality and project delivery is critical, it’s our goal
Communication and business relationships must be respectful
and professional, even those beyond Mosaic
Operate within all applicable laws
Manage information from Mosaic confidentially
Accurately and honestly reflect the situation with immediate
notification if an issue arises – “IT IS WHAT IT IS”
Maintain credibility and reputations, be an industry leader
Contracting Philosophy & Values
Be Fair & Consistent… it must be a partnership, not one-sided.
Standardize where possible
Honesty… “good ethics is good business”. Be concise and easy to
understand , thorough with no vagueness
Be Competitive… price right and maintain appropriate cost structures
Be both Tactical & Strategic… focus on successful project delivery but
consider long-term growth and development
Brand-Based… vendors must embrace our needs
Collaborative… work as one cohesive team
Timeliness/Urgency… right information, right away
Innovation… continuous improvement and operational excellence
Mosaic Procurement Trends
We are finalizing our First Nations Procurement and Benefits Strategy
which will include for contracting with First Nations controlled (51% First
Nations ownership) businesses, business consortia that include First
Nations business partners or subcontractors as well as recognizing First
Nations content in the award of contracts and other benefits.
We recognize that there may be greater opportunities to indirectly create
First Nations employment through contractors/suppliers (e.g. Mosaic’s
expansions will create 4,500 person years of employment).
We believe a new policy will lead to improved approaches to measuring
the strengths and weaknesses of suppliers and will assist in mentoring
and improving the spend with suppliers.
Our strategy is to grow; we understand that we require workers,
products, equipment & services from a wide ranging and diversified
workforce.
Establishing a First Nations Procurement Policy
Mosaic recognizes that a First Nations Procurement strategy relies
somewhat on dollar value, client development and satisfaction,
safety requirements, competitiveness and reciprocal accountability
for results.
Consistent with sound contracting policies and “best value”, if a
business solution can benefit First Nations or if in a geographic area
where the majority of the population is of First Nations, Mosaic may
implement a First Nations set-aside contracting policy with bidding
open only to First Nations suppliers
First Nations Procurement Objectives
Mosaic sees a need to establish realistic and achievable procurement
targets, we recognize that procurement is linked to business and the
market.
Mosaic plans to establish procurement objectives linked to anticipated
and potential annual growth. This will take into account the number of
First Nations businesses.
Targets will include metrics for contracting with First Nations suppliers,
existing commitments and the nature of the goods and services to be
procured.
Measured results will include First Nations bids, contracts awarded and
dollar value measured against other performance target areas. Our
strategy could be supported by tactical and operational plans, and how
we plan to achieve our growth along with our procurement spend.
First Nations Procurement
we will review our procurement policies and practices to ensure that
barriers are removed.
we will examine our current approaches and procedures for selecting,
developing and managing supplier relationships including our alliance
partners
we will analyze spend including potential First Nations procurement
opportunities
we will analyze our approach in communicating potential business
opportunities and our First Nations procurement targets. We will identify
innovative First Nation supplier development initiatives and strategies
we will review how existing practices can be better adapted, strengthened
or targeted. Our systems will be updated to reflect market changes and the
overall business environment
Mosaic will encourage First Nations business registers, identify and report
First Nations content in our procurement processes, and we will develop
criteria to evaluate proposals and First Nations content.
First Nations supplier development
•
we recognize that the systems we use to identify First Nations business,
products and services will need development
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we recognize that First Nations businesses may not understand our
approach to purchasing goods and services and our supply chain.
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Mosaic will implement initiatives to increase First Nations exposure
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Develop a Mosaic First Nations supplier data base
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pre-qualification to identify qualified First Nations vendors
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investigate joint venture opportunities for First Nations and non-First
Nations businesses
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Assess contracting opportunities for First Nations business development;
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Establish of First Nations mentoring initiatives and cultivate vendors in
order to increase exposure to Mosaic
•
Establish and communicate guidelines for the Mosaic First Nations set aside
policy.
Mosaic’s First Nations Supplier Strategy
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Mosaic plans to report annually on expenditures with Saskatchewan
suppliers, First Nations, etc.
•
Mosaic plans to develop an audit and verification procedure to monitor First
Nations content.
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Mosaic plans to employ a number of strategies to communicate our First
Nations Supplier Strategy.
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we plan to communicate our successes through newsletters, periodicals and
annual reporting
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We plan to provide ongoing information on all future & potential
procurement opportunities
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Mosaic plans to continue its participation in First Nations trade shows,
events, trade fairs and initiatives (e.g. Canadian Council for Aboriginal
Business, Canadian Business summits, Aboriginal Human resources
Development Sector Council of Canada Annual Champions Meeting, AHRDA
led Conferences, Canadian Association for Native Development Officers
Annual AGM, etc.); and Mosaic plans to leverage these communications
Local, Regional & Diversified workforce
Mosaic has large and diverse requirements – to remain competitive we
understand that we require workers, products, equipment & services from a
diversified workforce.
Mosaic’s procurement policy is to competitively source and this competitive
has been expanded to include First Nations businesses
We believe in and make efforts to support local economies by sourcing from
capable Local, Regional, First Nations & Diversified workforces, contractors
and suppliers
We are in the process of completing a Mosaic Representative Workforce
policy which will include First Nations, visible minorities and other valuable
business segments & opportunities
Saskatchewan does not have enough people, we realize our growth may
depend somewhat upon others. The key is to manage our growth and do
what’s right - without compromise
Questions, Answers & Contact info…
Q&A
Les R.W. Anderson
Global Manager Purchasing - Projects
2221 Cornwall Street
Regina, Saskatchewan Canada S4P 4L8
Phone: 306.523.2851
Cell:
306.550-LESA (5372)
Email: LesRW.Anderson@mosaicco.com
Record Crop Needed in 2009