CALGARY, Jan. 23, 2012 /CNW/ - Canadian Pacific Railway Limited (TSX: CP) (NYSE: CP) announced today a 10-year agreement with Canpotex Limited. Under the agreement, CP will be Canpotex's principal Canadian railway, transporting a large majority of potash shipments to Canpotex's main terminal in Vancouver, British Columbia. In addition, in conjunction with Union Pacific, CP will transport all Canpotex potash shipments to Portland, Oregon.
To move Canpotex's potash more efficiently and reliably, CP has enhanced the infrastructure of its north main line and western corridor, which handle potash service originating from 10 Saskatchewan mines. Improvements made under CP's Multi-Year Plan are reducing average route miles and improving the capacity and responsiveness of the CP network. CP's infrastructure enhancements are part of its four-year capital investment program, approved by the Board of Directors in the fall of 2010.
"Selection of CP to move the majority of our product to port is a reflection of the strength of our partnership and CP's ongoing commitment to efficiency in the supply chain and in helping to realize our growth objectives," said Steve Dechka, Canpotex's President and CEO.
"By upgrading our network, and through the ongoing implementation of our long train strategy, CP is continuing to strengthen our world class potash supply chain," said CP's President and CEO Fred Green. "We are now running potash trains up to 170 railcars in length, further improving service, capacity and efficiency."
"CP is pleased to provide the resource and infrastructure commitments necessary to support Canpotex's continued growth," added Mr. Green. "To better serve key customers like Canpotex, CP recently announced a $1.1 billion to $1.2 billion capital program for 2012 that includes the second phase of our $250 million north main line project. These value-enhancing investments position Canadian Pacific for long-term growth with strategic customers."
The 10-year agreement between CP and Canpotex commences July 1, 2012. Terms and conditions of the agreement are confidential. The agreement improves unit revenues for CP, including a fully responsive fuel mechanism, to support investments for continued excellence in service execution and capacity for further growth. The agreement also reflects increased efficiencies and cycle time benefits realized from the fewer miles to port and a new "hook and haul" arrangement.
Note on forward-looking information
This news release contains certain forward-looking statements relating but not limited to our operations, anticipated financial performance and business prospects. Undue reliance should not be placed on forward-looking information as actual results may differ materially.
By its nature, CP's forward-looking information involves numerous assumptions, inherent risks and uncertainties, including but not limited to the following factors: changes in business strategies; general North American and global economic, credit and business conditions; risks in agricultural production such as weather conditions and insect populations; the availability and price of energy commodities; the effects of competition and pricing pressures; industry capacity; shifts in market demand; inflation; changes in laws and regulations, including regulation of rates; changes in taxes and tax rates; potential increases in maintenance and operating costs; uncertainties of investigations, proceedings or other types of claims and litigation; labour disputes; risks and liabilities arising from derailments; transportation of dangerous goods; timing of completion of capital and maintenance projects; currency and interest rate fluctuations; effects of changes in market conditions and discount rates on the financial position of pension plans and investments, including long-term floating rate notes; and various events that could disrupt operations, including severe weather, droughts, floods, avalanches and earthquakes as well as security threats and governmental response to them, and technological changes. Other risks are detailed from time to time in reports filed by CP with securities regulators in Canada and the United States. Reference should be made to "Management's Discussion and Analysis" in CP's annual and interim reports, Annual Information Form and Form 40-F.
Except as required by law, CP undertakes no obligation to update publicly or otherwise revise any forward-looking information, whether as a result of new information, future events or otherwise.
About Canadian Pacific
Canadian Pacific (TSX:CP)(NYSE:CP) operates a North American transcontinental railway providing freight transportation services, logistics solutions and supply chain expertise. Incorporating best-in-class technology and environmental practices, CP is re-defining itself as a modern 21st century transportation company built on safety, service reliability and operational efficiency. Visit cpr.ca and see how Canadian Pacific is Driving the Digital Railway.
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