Saskatchewan Mining and Minerals Pricing 2012

We are setting our prices for the coming year and following are the factors we take into consideration.

It is our policy at Saskatchewan Mining and Minerals to share the complete picture of our pricing with our customers. “Transparency breeds honesty and trust in any partnership,” says Rodney McCann, President. “Those are the things we stand for and hope are the basis of our relationships with our customers and our suppliers.”

Says Anita Stettner, Regional Accounts and Logistics Manager, ”It is important to us that we are able to explain each of the components in our pricing structure and we can legitimatize any changes in pricing; that we can break down the different factors and explain where any increases are happening. The customer understands the strengths and weaknesses we have and how we can come to the table with the best price possible for them.”

“Our customers appreciate that we directly provide the surcharges, logistics charges and any additional external costs. We don’t mark those up; we give the direct cost to the customer so they can see that we are not adding our own costs on top of that.”

This year, it is especially significant that we be able to share the breakdown of our pricing with our partners because of the unique circumstances we face being based in Saskatchewan. “Obviously, there is a recession going on all over parts of North America, but in Saskatchewan, we are not in a recession. So we still see pressure in our local costs, especially labour. That is something we really do try to explain to our customers, that we face different price pressures, and that can sometimes be difficult to do,” explains General Manager Brent Avery.

 

Saskatchewan Minerals Inc. - Sodium Sulphate is Our Business

While individual numbers will change based on a customer’s specifics (industry and location, for example), the general factors that Saskatchewan Minerals takes into account when setting prices remain generally the same.

Production Costs

“The first local factor is our production costs,” says Brent. “Those are all determined by labour rates, our chemical costs, raw materials costs, energy, among other factors. If we are seeing price pressures in those areas, obviously we need to recoup some of that cost in our pricing.”

Labour Costs

“Customers are always asking me where we are in terms of our contract with the Union,” says Anita. “They want to know if we are coming up to the end of our contract session, or in the middle of one. They are always very interested in where we’re at and we are open to sharing that information with them.”

Freight Costs

“Because of the great distances to our customers, rail really is the only option,” explains Anita. “As a result, freight is a large component in the overall product pricing.”

“At the end of the day, our freight costs are what goes up the most,” says Clayton Miller, Regional Accounts Manager. “It includes our lease car costs, our transloads (which are much less a factor), and our local trucking. All of that in addition to our rail.”

 

We will continue to deliver the volume and product quality we commit to at the price we commit to. This is what we have been doing for 60 years.

Market Conditions

“It’s not only the market condition in total for sodium sulphate,” says Clayton. “It also could be regional. It could also be the industry we are selling into; if that industry is struggling, we take it into account. That is an important factor for us.”

Putting It All Together

Saskatchewan Minerals does its best to respond to each customer, and understand what is going on in his or her industry.

Our teams understand the need to be aware of our customers’ companies and industries to be able to best serve their needs. “Our customer needs are very important to us when we set our pricing,” says Clayton. “We need to make a profit and the customer needs to make a profit. That’s why we always find a fair price and hold it there for the full year. Our customers’ satisfaction with us is worth more than a couple of dollars here and there.”

“There is always some flexibility,” says Brent. “Between market segments, locations and packaging, there is a fair bit of variability in pricing.”

For most industries, Saskatchewan Minerals offers a delivered price, taking care of logistics, freight, maintenance and more. It is an “all-in” price.

Prices get set in the early fall, often in the fourth quarter of the calendar year. This year, the company foresees moderate increases, with the long-term goal of being a no-surprise reliable supplier with competitive prices.

We will continue to deliver the volume and product quality we commit to at the price we commit to. It is what we have been doing for 60 years.

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