Toronto—A fourth-quarter C$88.7 million non-cash impairment due to the erosion in margins for some water treatment products put Chemtrade Logistics Income Fund in the loss column for both the quarter and the year. Chemtrade fingered aluminum sulfate as the product under pressure. The company reported a fourth-quarter loss of $80.1 million ($1.16 per diluted share) on revenues of $335.7 million, compared to a year-ago loss of $10.1 million ($0.16 per share) and $313.3 million, respectively. The full-year loss was $47.6 million ($0.69 per share) on revenues of $1.36 billion, compared to the year-ago net income of $21 million ($0.35 per share) and $1.2 billion, respectively. Increased revenues were due to the stronger U.S. dollar, as well as the inclusion of General Chemical for 12 months rather than 11 in 2014. The year 2014 also included results of the Montreal East business, which was sold to Suncor Energy Products Inc. on July 17, 2014. “Overall, our businesses performed well in 2015,” said President and CEO Mark Davis. “Our adjusted EBITDA is the highest ever generated by Chemtrade. Our Sulphur Products & Performance Chemicals segment produced strong results from regenerated sulfuric acid and ultra pure acid, more than offsetting some weakness experienced by certain other products. In Water Solutions & Specialty Chemicals, despite some competitive pressures in our water treatment chemicals, our other products in this segment performed better than last year,” continued Davis. He added that demand for most of the company’s products was stable in 2015, and that the company expects that to continue in 2016. The only exception, he said, might be a little weakness in its sulfur resale business due to a downturn in the fertilizer market. Chemtrade told analysts it had recently renewed its sulfuric acid supply agreement with Vale SA through 2020, with the terms being substantially the same as before. Vale is Chemtrade’s largest acid supplier, and is expected to go down to one furnace in 2017. Chemtrade said it markets close to 2 million mt of acid in North America, and that it is well positioned to absorb any fluctuations as roughly half of its volumes are self-produced.
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Innophos continues steps to shore up results
Cranbury, N.J.—Posting a loss for fourth-quarter 2015, specialty phosphate maker Innophos Holdings Inc. vowed to take more action to remedy the situation, telling analysts Feb. 23 that outside experts will be brought in to assist, and that the company will launch even deeper dives by March 1. Innophos announced a 5 percent cut to its workforce last fall (GM Nov. 9, 2015). “In 2015 our business was challenged by continued weak demand, competitive pricing pressures, and a strong U.S. dollar,” said President Kim Ann Mink. “Realizing that these headwinds are expected to persist in 2016, we are taking critical steps to minimize the impact on our business and become more flexible and agile as market conditions change. We are focusing on making meaningful changes to drive operational excellence, commercial excellence, and strategic growth – three critical areas of focus that will ensure that the business operates at its full potential and continues creating value for our shareholders.” Mink reiterated to analysts that the company plans in 2016 to focus on the GTSP/Other business to make it more profitable, with an eye toward a possible tolling agreement. Innophos expects that unit, which produces co-product GTSP in Mexico, to have a first-quarter loss of $1-$2 million. Mink expects underlying demand in most of its markets to be soft in 2016, with volumes to be relatively flat with 2015. She also said the company would maintain its dividend at current levels as it continues to generate significant cash flow. The company reported a fourth-quarter loss of $4.6 million ($0.24 per diluted share) on net sales of $170.6 million, compared to a year-ago net income of $11.3 million ($0.52 per share) and $194.5 million. Innophos said the TSP/Other segment would have broken even except for some $12 million in management transition charges in the Other category. Fourth-quarter losses for the unit were $11.7 million on sales of $5.3 million, compared to the year-ago loss of $748,000 and $16.6 million, respectively. Total Specialty Product income was $8 million on sales of $165.3 million, down from $23.4 million and $177.9 million, respectively. Results were off for both the U.S./Canada and Mexico segments of the business, with Innophos complaining of competition from Europe for the former and Mexico for the latter. Company-wide full-year net income of $26.3 million ($1.29 per share) and $789.1 million was down from 2014’s $64.5 million ($2.91 per share) and $839.2 million, respectively. Full-year GTSP/Other reported an operating loss of $19.7 million on sales of $56.3 million, compared to 2014’s loss of $3.8 million and $77.3 million. Specialty Phosphate income was $71.2 million on sales of $732.8 million, down from $110.6 million and $761.9 million, respectively.
Martin Sulfur/Fert income up 6 percent
Kilgore, Texas—Martin Midstream Partners reported a 6 percent uptick in operating income for its Sulfur Services segment, which includes both sulfur and fertilizer, for the year ending Dec. 31, 2015, to $27.1 million on revenues of $170.2 million, compared to 2014’s $25.6 million and $215.5 million, respectively. Adjusted actual EBITDA from the unit was $36 million, with this consisting of $19.5 million from fertilizer, $9.8 million from molten sulfur, and $6.7 million from sulfur prilling, compared to the year-ago $33.8 million. “During the fourth quarter, the pure sulfur side exceeded forecast in both the molten and prilled sulfur lines of business,” said Ruben Martin, president and CEO of Martin Midstream GP LLC, the LP’s general partner. “Volumes within our fertilizer business decreased during the quarter; however, sales migrated to higher margin product lines. For 2015, we exceeded full-year guidance by more than $8.6 million in the Sulfur Services segment based on margin improvement as raw material costs declined. Our Sulfur Services segment has proven to be resilient, even approaching a counter-cyclical nature to the current commodity price environment. Based on 2016 agricultural planting forecasts, we are optimistic that fertilizer performance without our Sulfur Services segment will again be strong,” he continued. Martin said fertilizer margins improved $34/lt in the fourth quarter compared to the third quarter. Despite an uptick in planting in 2016, he said this would be somewhat offset by the first-quarter drydocking of its ocean-going sulfur barge, which transports molten sulfur from Beaumont to Tampa. While 2015 sulfur volumes were up 1 percent, to 856,000 lt from 2014’s 848,000 lt, fertilizer volumes dropped 10 percent, to 274,000 lt from 306,000 lt. Company-wide, Martin reported 2015 net income of $38.4 million on revenues of $1.04 billion, up from 2014’s loss of $11.7 million and $1.64 billion. Revenues were down, primarily due to significantly lower natural gas liquids prices. Fourth-quarter net income was $6.8 million on revenues of $254.4 million, up from the year-ago $4.4 million and $377 million, respectively.
United Prairie to acquire Northern Illinois Alliance
St. Paul. Minn.—CHS Inc. reported on Feb. 23 that United Prairie LLC, a full-service agronomic retailer serving farmers in central Illinois, will acquire Northern Illinois Alliance, a retail agronomy joint venture formed in 2013 (GM June 17, 2013) between CHS and Illinois-based Elburn Cooperative. The boards of both organizations recently voted in favor of the sale, which is expected to be finalized by March 1, 2016. “We are excited about bringing our two organizations together and building off of what each has started,” said Tim Hughes, United Prairie general manager. “It allows us to be most efficient with our current resources, as well as invest in even more precision ag products and technology because we can utilize those over a larger footprint.” Northern Illinois Alliance’s full service wholesale and retail fertilizer facility at Crescent City, Ill., has 30,000 ton of dry storage, 15,000 ton of liquid storage, and a 50-car rail siding, along with dry fertilizer blending services and 24-hour access for UAN-32 and UAN-28 loading. “Both Northern Illinois Alliance and United Prairie have similar approaches to meeting our customers’ needs, and we agree that doing what’s best for them is our first priority,” said Tim Gocken, Northern Illinois Alliance general manager. “Coming together allows us to combine valuable technology and resources so we can continue to help our growers optimize their yields season after season.” Formed in 1996, United Prairie serves the seed, fertilizer, and crop protection needs of central Illinois farmers from seven Illinois retail locations in Tolono, Emergy, Ivesdale, Pierson, White Heath, Dewey, and Jamaica. The business is owned by Premier Cooperative, Topflight Grain Inc., and CHS, which invested its central Illinois assets and became part of United Prairie’s ownership group in 2015. United Prairie’s acquisition of Northern Illinois Alliance coincides with the pending March 1 merger of CHS and Elburn Co-op, which was first announced last fall (GM Nov. 9, 2015) and approved by Elburn members in December (GM Dec. 21, 2015). Elburn has been in business since 1921, and currently operates as a full-service supplier of agronomy, feed, seed, energy, and grain marketing services from 12 locations in north-central Illinois and south-central Wisconsin. CHS said no interruption of service to customers is expected during the transition.
USDA projects more corn, less soy, wheat, cotton
Arlington, Va.—USDA reported that U.S. farmers are expected to plant about 90 million acres of corn in 2016, up from 88 million acres last year and the first acreage increase since 2012’s record 97.291 million acres. The projection was made on Feb. 25 at the opening session of USDA’s annual Agricultural Outlook forum in Arlington, Va. Corn yields are expected to be down slightly, at 168 bushels/acre compared with last year’s 168.4 bushels/acre, while total corn production is forecast at 13.825 billion bushels, up 2 percent from 2015, but below 2014’s record 14.216 billion bushels. The 2016 soybean crop is projected at 82.5 million acres and 3.81 billion bushels, down slightly from last year on both fronts, while soybean yields are expected to come in at 46.7 bushels/acre, compared with 48 bushels/acre in 2015. Total wheat acres are forecast at 51 million, down from 54.6 million in 2015, with declines projected for both winter and spring wheat due to low prices. Total wheat production is forecast at 1.991 billion bushels, down about 3 percent from last year’s crop, while average wheat yields are expected to climb to 45.9 bushels/acre from last year’s 43.6 bushels/acre. All U.S. cotton production is estimated at 12.9 million bales, down fully 21 percent from last year, with planted cotton acreage falling 22 percent to 8.6 million acres. The 2016 U.S. rice crop was projected at 2.8 million acres, up from 2.61 million acres last year, with total rice production forecast at 211.5 million cwt, up 10 percent from 192.3 million cwt in 2015. Average rice yields are projected at 7,633 pounds/acre, up from 7,470 pounds/acre last year. Average crop cash prices will also decline from last year, with corn falling to $3.45/bushel from $3.60/bushel; soybeans to $8.50/bushel from $8.80/bushel; wheat to $4.20/bushel from $5/bushel; and cotton to 59.5 cents/pound from 61.3 cents/pound. Cash prices for rice are expected to hold steady at $12.90/cwt. USDA said large supplies of all crops should continue to pressure prices, and farm debt as a percentage of income is projected to rise to the highest level since 1984. “Lower commodity prices are expected to idle some land, which had been brought into production as commodity prices rose through 2012,” said Robert Johansson, USDA’s chief economist.
The Agricultural Retailers Association (ARA)
The Agricultural Retailers Association (ARA) announced on Feb. 24 that Sen. Thad Cochran (R-Miss.) and Sen. John Thune (R-S.D.) were the recipients of ARA’s 2015 Legislator of the Year award. The awards, which were presented earlier in February when the ARA board of directors visited Congressional offices, are given annually to a member or members of Congress who “champion legislation important to the agricultural retail industry.”
ARA said Cochran, chairman of the Senate Appropriations Committee, was instrumental in providing agricultural retailers with “urgent regulatory relief” from the Occupational Safety and Health Administration’s (OSHA) Process Safety Management (PSM) standard in the Fiscal Year 2016 Consolidated Appropriations Act.
ARA said it recognized Thune, chairman of the Transportation Committee, for his efforts to reform the Surface Transportation Board, address the Positive Train Control deadline, and enact a multi-year surface transportation reauthorization bill. Thune has also attacked EPA’s redefinition of Water of the U.S. under the Clean Water Act, calling it a “tremendous overreach” that would cause “great economic harm to farmers, ranchers, and small business owners.”
ARA President and CEO Daren Coppock said Cochran’s and Thune’s “insistence agricultural interests be included in conversations regarding transportation and appropriations resulted in appropriate and functional legislation on key issues for ag retailers. We appreciate their dedication and continued support for the agriculture industry.”
The Mosaic Co.
Corrine Ricard, The Mosaic Co.’s senior vice president of human resources, has been named to the board of directors of Carlisle Companies, Charlotte, N.C., a globally diversified company involved in a broad range of niche markets.
Agrium Inc.
Agrium Inc. on Feb. 25 announced the appointments of Maura Clark, Miranda Hubbs, and William (Bill) Simon to its board of directors, effective Feb. 24. The move expands the board to 12 directors, 11 of whom are independent.
Clark was the former president of Direct Energy Business, the commercial and industry energy business unit of Direct Energy LP, a North American energy and energy-related services provider, from 2007-2014. She holds a Chartered Professional Accountant designation and currently serves on the boards of directors of Elizabeth Arden Inc., a global prestige beauty products company, and Fortis Inc., a North American electric and gas utility company.
Hubbs was the former executive vice president and managing director of McLean Budden Ltd., one of Canada’s largest institutional asset managers, from 2002-2011. She is a Chartered Financial Analyst (CFA), and currently serves on the board of Spectra Energy Corp., a pipeline and midstream company.
Simon was the former president and CEO of Walmart U.S., a subsidiary of Wal-Mart Stores Inc., from 2010-2014. He currently serves on the board of Darden Restaurants Inc., a multi-brand restaurant operating company.
“These individuals are an excellent complement to our existing board skill set, bringing demonstrated and relevant industry experience and strategic acumen to the table. We believe their combined experience will further support our strategy to deliver value to our stakeholders through good governance, operational excellence, and continued growth,” commented Agrium Board Chair Victor Zaleschuk.
Charah Inc.
Charah Inc., Louisville, Ky., reports that Daron Bell joined Charah Agricultural Products as senior business manager. He is based in Clarkson, Ky., and is responsible for Sul4r-Plus® fertilizer and other Charah agricultural products sales support and business management. Bell has over 20 years of experience in the agricultural retail industry. Most recently, he was branch manager for Crop Production Services in Clarkson. He earned a B.A. in Chemistry from the University of Louisville and completed the CCA (Certified Crop Advisor) certification. In addition, he has been a certified volunteer firefighter with the Commonwealth of Kentucky for 28 years with Clarkson Fire & Rescue, and holds the current rank of captain.
Transportation
U.S. Gulf: Fog warnings were issued throughout the Gulf shipping region last week.
Shippers put wait times at Industrial Lock in the range of 7-12 hours with 10 boats queued for service. Algiers Lock reported delays of 5-10 hours for the week on an average seven vessels in line, and the Corps called Port Allen Lock wait times 8-10 hours.
Bayou Sorrel Lock restrictions continued last week, pushing the maximum lock queue time to 16 hours on just three vessels in line. A persistent 3.6-foot differential between the flood-side and land-side gauges kept the restrictions in place.
The Charenton, East Calumet, and West Calumet floodgates were also affected by elevated differentials, closing those locations. The Bayou Boeuf Lock saw waits of 2-4 hours.
Harvey Lock is slated to close for repairs on Feb. 29 and remain out of service through April 30. Shippers said the Corps would route all Harvey Lock traffic through Algiers Lock while work is underway, with significant delays expected.
The Baton Rouge river gauge showed depths of 27.73 feet on Feb. 25, down from 30.81 feet one week earlier. The reading remained shy of the area’s 30-foot minimum action stage, but was projected to rise to 28.1 feet by Feb. 29. The gauge at New Orleans showed 10.29 feet and holding, below the prior week’s 11.83 feet.
Calcasieu Lock reported 2-4 hour delays for the week. Clearance through the West Port Arthur Bridge remained reduced by a minimum three feet due to ongoing maintenance and painting operations, shippers said. The efforts are scheduled to continue through April 30.
Navigation through Brazos Lock was estimated at 6-12 hours for the week, and ten vessels were in line to lock on Feb. 25. An intermittent closure notice remained in effect at Brazos. Repairs to both the east and west floodgates were expected to slow daylight-hour traffic, Monday through Friday.
Lower Mississippi River: The National Weather Service (NWS) put Vicksburg-area river levels at 32.46 feet and rising on Feb. 25. Depths were forecast to increase to 34.5 feet by Feb. 29, just shy of the region’s 35-foot action stage.
The Memphis gauge was also on its way up, logging 21.47 feet on Feb. 25. The gauge was predicted to hit 24.9 feet on Feb. 29, south of the 28-foot action stage.
Upper Mississippi River: Both the main and auxiliary chambers at Lock 27 were scheduled to close during daylight hours on Feb. 25, 26, and 29, shippers said, due to planned diving operations. The closures will effect a complete river closure during working hours.
Mel Price Lock delays were called 1-2 hours last week. Lock 27 wait times averaged about 1.5 hours, shippers said.
NWS data put St. Louis depths at 15.17 feet on Feb. 25, with river levels predicted to slowly decline over the next 13 days.
Upper River locks shuttered for the winter remain on schedule to reopen in mid-March, shippers noted. Locks 13-21 were expected to renew operations on March 4, while the Corps listed March 17 as the planned opening date for Lock 9.
Illinois River: Shippers reported flowing ice on the Illinois River last week, but said conditions were improving. The ice had a minimal impact on transit times, several sources said.
An increase in traffic through T.J. O’Brien Lock was reported in response to the improved conditions, swelling wait times at the lock to an average of 1-2 hours for the week. Lockport Lock delays were upgraded from the previous report, with transit times falling to an hour or less.
Both the Dresden Island and Marseilles Locks reported waits of about an hour, and Starved Lock saw 1-2 hour transit times. The Peoria and LaGrange Locks restarted locking last week after high water levels had allowed vessels to pass freely in recent weeks.
The Havana river gauge was steady at 9.62 feet on Feb. 29.
Ohio River: Shippers continued to note the presence of high-water operating conditions along the Ohio River last week, blaming recent rains and continued snowmelt for keeping levels elevated.
Most shippers claimed the conditions had little impact on navigation, however, and Cincinnati was expected to crest at 45.6 feet on Feb. 27. The action stage at Cincinnati begins at 40 feet.
Locks 52 and 53 remained out of operation for the week, allowing vessels to pass freely. Transit times were negligible at Lock 52, but Lock 53 waits were called about an hour.
Emsworth Lock navigation was quoted at an hour or less, the same as both the Dashields and Montgomery Locks. Passage through New Cumberland Lock was reported at 1-2 hours, and R.C. Byrd Lock navigation was quoted at roughly an hour.
Later this year, the Montgomery Lock main chamber is scheduled to undergo maintenance between May 9 and June 19, with delays expected. The lock will also close from Aug. 15 through Nov. 18. An Emsworth Lock main chamber closure is slated for June 20 through Aug. 5.
Sources reported high-water operating conditions on the Allegheny, Kanawha, and Big Sandy Rivers. Elevated depths were also noted on the Monongahela River, and the Braddock Lock and Dam river chamber remained offline due to equipment failure, forcing navigation through the site’s land chamber.
High-water conditions on the Cumberland River aggravated delays in the Nashville area, where CSX railroad bridge maintenance was already reportedly causing backups. Work on the bridge was projected to wrap up in late February. Barkley Lock delays, on record since Feb. 8, were resolved on Feb. 22, shippers said.
High water was also reported on the Tennessee River. Chickamauga Lock electrical maintenance, responsible for 10-11 hour intermittent shutdowns since Jan. 26, was expected to conclude Feb. 23.
Arkansas River: Down the road in 2016, Webbers Falls Lock is scheduled to shut down May 16-22 in the upstream direction, followed by a downstream closure Aug. 24 through Sept. 11.