All posts by hlancey@bloomberg.net

Koch, QatarEnergy Ink New Urea Offtake

Featured, U.S., Urea

US producer Koch Fertilizer LLC and QatarEnergy have entered into a long-term urea supply agreement to commence in July 2024. The agreement will span 15 years and cover approximately 740,000 mt/y of urea to be distributed by Koch both in the US and internationally.

“We are delighted to announce the signing of this long-term sales agreement with one of our valued partners, solidifying our longstanding relationship with Koch Fertilizer,” said Saad Sherida Al-Kaabi, President and CEO of QatarEnergy and Minister of State for Energy Affairs. “This agreement marks a significant step in advancing synergy and cooperation and fostering mutual growth and value for both sides.”

“QatarEnergy has been a cherished partner of Koch Fertilizer for more than a decade and we are thrilled to cement our mutually beneficial relationship for years to come,” added Mark Luetters, Senior Vice President of Koch Industries and President of Koch Fertilizer.

Qatar is the largest urea exporter in the world, with 5.4 million mt of exports in 2023, of which 1.6 million mt went to the US.

USDA Awards Another $83 M for Fertilizer Expansion Program

Featured, Phosphate, U.S.

The USDA announced that it has awarded an additional $83 million under the Fertilizer Production Expansion Program (FPEP), with this round going to 17 projects in 12 states: California, Florida, Hawaii, Iowa, Illinois, Kansas, Kentucky, Minnesota, North Carolina, North Dakota, Oregon, and Washington.

To date, USDA has invested $251 million in 57 projects across 29 states through FPEP. The Biden administration committed up to $900 million through the Commodity Credit Corp. for FPEP.

New recipients include:

4420 Serrano Drive LLC, Jurupa Valley, Calif. – $25.4 million. The company, a subsidiary of PreZero US Inc., will utilize black soldier flies to recycle food waste into organic nutrient fertilizer. Annual capacity is expected to be 11,400 st, which will supply roughly 87 producers in the region.

Corigin Solutions Inc., Merced, Calif. – $2.8 million. An existing facility that converts agricultural waste into regenerative crop inputs will be expanded to yield 14,400 st/y and remove 21,600 st/y of CO2 pollution.

Gemperle Brothers dba Gemperle Family Farms, Turlock, Calif. – $4 million. Funds will be used to construct and equip a 38,100 square foot chicken litter pellet fertilizer facility that will serve about 100 producers, with plans to produce 50,000 st within the first two years of operation.

Cog Marketers Ltd. dba as AgroLiquid, Lake City, Fla. – $4 million. The money would aid the construction and equipping of a 45,720 square foot manufacturing facility, which is expected to produce 2 million gallons per year of fertilizer components to serve over 200 independent retailers in the region.

Simonpietri Enterprises LLC, Kapolei, Hawaii – $4 million. The project entails construction and equipping a biochar manufacturing facility to produce an organic, nutrient rich fertilizer from wood and green waste gasification, poultry litter, and biodiesel refining. Some 28,800 st/y is expected to be produced and serve nearly 700 producers.

Return LLC, Northwood, Iowa – $3.9 million. A current fertilizer manufacturing facility will be expanded to improve existing compost/fermenting site infrastructure and purchase equipment to transport materials and manufacture the final product.

Interpose Ag LLC, Cameron, Ill. – $2.4 million. Funds will be used to provide financing for construction and equipment purchases for five fertilizer facilities in rural Illinois. The facilities will produce low-salt, potassium phosphate liquid fertilizer for in-season application uses. The project is expected to create 10 new positions and yield 6 million gallons per year of liquid fertilizer, which will be made available to more than 100 local producers.

Sul4r-Plus LLC, Louisville, Ky. – $14.9 million. The money will go to finance construction and equipment for a new fertilizer facility in rural Illinois. The company upcycles synthetic gypsum, which is a waste from coal-fired plants, into an organic binder nutrient. The project is expected to create 50 new positions and yield 100,000 st/y that will be made available to more than 80 local producers.

Aquatic Agriculture Inc., Ill. – $2 million. Funds will provide financing for equipment and working capital for a mobile fertilizer processing and baling operation in rural Illinois. The project will bale and package chicken litter into producer-ready product with an extended shelf life. Operated by Green Harvest Solutions, the project will help deliver a high content, low impact fertilizer amendment to producers throughout the Midwest. Some 173,250 st/y of production is anticipated, which would serve roughly 200,000 acres.

Patriot Acres LLC, Des Plaines, Ill. – $1.6 million. The money would assist in the construction and equipping of a 45,720 square foot organic recycling and processing facility. Landscape waste, food waste, and organic discard would be made into a high-quality compost and liquid soil additive called Terreplenish. The project is expected to produce enough fertilizer to serve 253,000 acres and serve over 1,800 producers.

Mid-Kansas Cooperative Association, Canton, Kan. – $2.4 million. Funds would provide financing for the construction and equipping of a new replacement facility in Canton, Kan. The new facility would provide more efficient access to customers and support a production of 3,000 st/y of liquid fertilizer, which will be made available to 250 local producers. The project is expected to create eight additional positions.

Soil Carbon Partners Inc., Pike County, Ky. – $2.4 million. The project entails financing for the construction and equipping of a new mixing, packaging, and storage operation for soil recharging fertilizer amendment material. It expects a yield of 780,000 st/y of fertilizer material that will be made available to 384 producers. Additional positions are expected to be created.

Sustane Natural Fertilizer Inc., Cannon Falls, Minn. – $2.4 million. Funds would enhance and expand this family-owned, natural fertilizer manufacturing facility and purchase new equipment to increase production.

Poulterra Inc., Maxton, N.C. – $2.9 million. The company would build a facility to produce fertilizer from poultry litter.

Ray Farmers Union Elevator Co., Ray, N.D. – $1.5 million. A new addition to an existing facility would increase dry fertilizer capacity by 7,025 st to a total of 11,425 st. The venture would benefit new and existing customers in Williams, Divide, Mountrail, Burke, and McKenzie counties and improve fertilizer supply logistics.

Chapul LLC, Salt Lake City, Utah – $4 million. Two new facilities would be constructed in North Dakota and Oregon. Black soldier flies would be used to consume organic material and produce a mixture of nutrient rich soil amendment or frass. The project anticipates 10,000 st/y of production at each location and will create 59 new positions.

Tidal Vision Products Inc., Raymond, Wash. – $2.3 million.The company would expand a fertilizer manufacturing facility in Raymond, Wash., and build a new one in Orange, Texas.  Funds would be used to purchase and install new processing equipment at both facilities, finance design costs, and provide working capital. The company produces liquid fertilizers.

Synsus Acquires AmegA Sciences and React Industries

Featured, Nitrogen, U.S.

Houston-based Synsus Private Label Partners LLC announced on May 22 that it has acquired AmegA Sciences LLC and React Industries LLC, both private label manufacturers based in Lakeland, Fla., that serve the agricultural, horticultural, turf, and ornamental industries as well as the wider plant health sectors.

Synsus said AmegA and React are both exclusively business-to-business private label manufacturers that have shown exceptional growth, with a focus on vertical integration and dynamic production while reducing the time-to-market for customers. Their customer partnerships are global, Synsus added, from small startups to multi-billion-dollar conglomerates.

“From our first discussions, it was clear that our business models and customer-focused value propositions to not compete with our customers are in perfect alignment,” said Greg Crawford, CEO of Synsus. “We are very pleased to merge the people and capabilities of the organizations together to provide additional value to the markets we serve.”

Synsus said the state-of-the-art formulation capabilities of AmegA and React, along with their advanced production automation, and fully integrated onsite commercial print facility will add significantly to Synsus’ strategic vision and will enable Synsus to bring more diverse private label solutions to its combined customer base.

Terms of the transaction were not disclosed. Ryan Sparks, the founding owner of AmegA and React, will maintain his role while becoming a stakeholder within Synsus. All employees and current locations will be maintained, Synsus reported.

“It was immediately evident upon our first meetings with Synsus that our values and strategic outlook were aligned, with our capabilities being almost wholly complementary,” Sparks said. “I am extremely excited to be combining forces, further bolstering Synsus’ already outstanding strategic position, adding to their over 500,000 square feet of existing manufacturing facilities, and helping to accelerate growth and product offerings to our customers.”

Founded in 1976 as a chemical products supplier to the marine industry, Synsus expanded to the turf, ornamental, and agricultural markets in 1992. Its list of products includes specialty liquid fertilizers, nitrogen stabilizers, foliar micronutrients, colorants, adjuvants and surfactants, and other liquid nutritional products. The company has manufacturing facilities in Houston, Pipestone, Minn., and Sylacauga, Ala., along with R&D labs in Ripley, Miss., and Raleigh, N.C.

Russia Plans Tax Hike on Businesses as War Costs Mount

Ammonia, Market Watch, Natural Gas, Nitrogen, Phosphate, Russia, Ukraine

Russia plans to raise taxes on businesses and the wealthy, targeting a relatively small number of people in what could prove a popular move as the invasion of Ukraine continues to put pressure on government finances, according to Bloomberg, citing an Interfax report.

The Finance Ministry plan would introduce a more robust progressive income tax, while the levy on corporate profits would rise to 25% from the current 20%, according to a proposal filed to the government. From 2025, the level of personal income tax for the highest earners would increase to 22% from 15% currently. The entire package would raise an additional 2.6 trillion rubles ($29.2 billion) in 2025, with over a half of that coming from the higher corporate tax.

Levies on the extraction of iron ore, potash, and phosphate fertilizers would also rise. The mineral extraction tax on iron ore is to increase 15%, potash 130%, and phosphate fertilizers 100%, according to BBC Monitoring, which also reported that it is proposed that nitrogen fertilizer producers pay an excise tax on the purchase of natural gas for ammonia production at a rate of 1,200 rubles per thousand cubic meters.

“The plan looks like a certain compromise between the government’s intention to increase personal income tax revenues without affecting the interests of the vast majority of the population,” said Olga Belenkaya, an economist at Finam in Moscow.

The personal income tax would affect only about 2 million people, or 3.2% of the total workforce, Finance Minister Anton Siluanov said in a statement. Rates would range from the current 13% for those earning as much as 2.4 million rubles a year to 22% for those exceeding 50 million rubles.

Siluanov said the changes reflected a need “for social justice, including for progressive tax rates.” Yet the tax increases won’t affect dividend payouts or share sales, the major source of wealth for Russia’s richest, The Bell reported. At the same time, troops fighting in Ukraine will be eligible for additional tax benefits.

Meanwhile, the increase in corporate taxes will provide the government 1.6 trillion rubles of extra income, Interfax reported, citing the Finance Ministry.

Some businesses welcomed the move as more predictable than the one-off taxes the government has enacted in past years. “As an entrepreneur, I am in favor of increasing income taxes instead of fees and one-time payments,” Russia’s richest man, Vladimir Potanin, told Tass news service when asked about the government plan.

Russia has run a budget deficit since the end of 2022, a reflection of the steep costs of Putin’s invasion of Ukraine in February of that year.

The Finance Ministry said in a statement the proposals have been submitted to the cabinet and could win approval in the lower house of parliament before the summer recess.

Hanwha, INEOS Study Low-Carbon Ammonia Facility

Ammonia, Clean Ammonia, Low-Carbon, South Korea

South Korean-based consortium Hanwha Corp. and INEOS Nitriles, part of the British multinational conglomerate INEOS, have announced their intention to collaborate on the study for a low-carbon ammonia facility with carbon sequestration in the US. 

The planned capacity of the facility is expected to be more than 1 million mt/y of ammonia. A final investment decision is planned for 2026 with commercial operation expecting to commence in 2030. The final location of the plant is yet to be determined.

“Our collaboration with INEOS Nitriles is aimed at strengthening our strategic foothold in the global ammonia market and addressing the growing worldwide demand for clean ammonia solutions,” said Kiwon Yang, CEO of Hanwha. “The production of industrial materials using clean ammonia aligns well with our commitment to key sustainability principles. This technological advancement will be a pivotal turning point in realizing Hanwha’s vision for a sustainable future.” 

“This project is a potentially important contributor to INEOS Nitriles’ carbon emission reduction targets in 2030 and its net zero ambitions by 2050,” said Hans Casier, CEO of INEOS Nitriles. “This project wouldbe a significant step towards a leadership position in low-carbon Acrylonitrile supply, of which ammonia with low-carbon emissions is a key raw material.”

Consortium to Study Green Hydrogen from Ammonia

Clean Ammonia, Germany, Green Ammonia, Green Hydrogen, Hydrogen, Low-Carbon

A consortium led by German-based Heraeus Precious Metals will study the efficient and sustainable supply of green hydrogen from green ammonia. The project is called “AmmoCatCoat” and in addition to Heraeus, includes partners Fraunhofer ISE, Leibniz Institute for Agricultural Engineering and Bioeconomy (ATB), Centre for Transmission Electron Microscopy (CAU), PYREG GmbH, and Purem by Eberspächer. 

AmmoCatCoat is being funded by the German Federal Ministry of Education and Research and is set to receive around €2 million, with a project duration of three years. It will demonstrate conversion to hydrogen from ammonia at the pilot scale and will seek to make the process as sustainable as possible exploring low-temperature operation, long-term material stability, and the use of renewable resources. The study will include exploring a catalyst carrier system with ruthenium coating on nitrogen-doped carbon from biomass.

The process of obtaining hydrogen from ammonia is known as cracking.  The process may be used in instances where hydrogen is chemically stored as ammonia for more efficient transportation but needed as hydrogen at the point of use, in which case the ammonia will be converted back into hydrogen near the end user.

Tecnimont Proceeds on UAU Low-Carbon Project

ADNOC - Abu Dhabi, Ammonia, Blue Ammonia, Clean Ammonia, Low-Carbon

MAIRE Tecnimont Integrated E&C Solutions has received the notice to proceed with construction activities for the Fertiglobe low-carbon ammonia plant that is under development in the Ruwais region in Abu Dhabi, UAE. The plant is expected to begin operation in 2027 and will produce 1 million mt/y of blue ammonia.

Italian Tecnimont SpA signed the engineering, procurement, and construction contract (EPC) with Fertiglobe in February 2023 (GM Feb. 27, 2023).

Fertiglobe is the largest producer of nitrogen fertilizer in the MENA region and is developing the blue ammonia plant with Mitsui & Co., GS Energy Corp., and Ta’ziz, a joint venture between ADNOC and Abu Dhabi sovereign wealth fund ADQ. Fertiglobe joined the blue ammonia project in June 2021 (GM June 25, 2021) while Mitsui and GS Energy agreed to partner with the Ta’ziz joint venture in November 2021 (GM Nov. 19, 2021).

Both Mitsui and GS Energy have stated that upon equity participation and supply commencement they will offtake “significant volumes” of blue ammonia to “meet growing demand in the energy and industrial sectors in Japan and Korea, respectively.”

The International Fertilizer Association – Management Brief

Management Briefs

The International Fertilizer Association (IFA) elected seven new representatives to its Board of Directors at its Annual General Meeting in Singapore on May 22. The new Board Directors are Bruce Bodine, The Mosaic Co.; Soufiyane El Kassi, OCP Nutricrops; Xiaofeng Hou, China BlueChemical; Dmitry Konyaev, Uralchem JSC; Jahangir Piracha, Fauji Fertilizer Company Ltd.; Edward Weiner, Trammo Inc.; and Kelvin Wickham, Ballance Agri-Nutrients. Additionally, IFA welcomed 34 new members to the association, including five Ordinary Members, 24 Associate Members, two Affiliate Members, and three Correspondent Members.

Seven Reported Dead in Ship Explosion

Morocco, News Briefs

Seven people were reported dead and several injured in an explosion and resulting fire on the Panamanian vessel Toro Rosso, which occurred as the ship neared Morocco’s fertilizer export hub Jorf Lasfar on the morning of May 30, according to Yabiladi.

The incident reportedly occurred eight nautical miles from the port with some 20 crew members on board.The ship was chartered by an Ethiopian company and was said to be on its way to load fertilizer.

Nutrien Idles Three of Five Blenders in Brazil

Argentina, Brazil, Chile, News Briefs

Nutrien Ltd. is halting three blending facilities in Brazil indefinitely, according to Bloomberg, citing a statement from the company. Two of the plants are in Goias state, and the other is a new blender in Minas Gerais. The Minas Gerais plant was expected to start operations in June, a Nutrien spokesperson said.

Nutrien said it is prioritizing operational efficiency and profitability and can resume operations in the future when market conditions are more stable. The company will rely on partners and on its two other blending facilities in Brazil, in Minas Gerais and São Paulo states, to continue supplying fertilizers to local customers.

Nutrien announced late last year that it was pausing investments in Brazil until there is greater stabilization of the market (GM Nov. 3, 2023). The company also recently revealed that it plans to sell its retail operations in Argentina, Chile, and Uruguay (GM April 19, p. 1).