All posts by hsanderson@kennedyinfo.com

Cherokee plant up, Pryor not

LSB Industries Inc. said Dec. 30 that the ammonia plant at its Cherokee, Ala. chemical facility resumed production Dec. 24, 2015. The plant was taken out of service for unplanned maintenance Dec. 11, due to a small leak that was detected in a vessel containing hydrogen. LSB estimates that this unplanned outage will reduce operating income by approximately $2.5-$3.0 million.

LSB also announced that the Pryor, Okla. chemical facility remains under repair. Pryor’s urea plant was taken out of service on Nov. 14 in order to repair a CO2 pre-compressor, which was completed and the plant restarted on Dec. 21. However, on Dec. 27, both Pryor’s urea and UAN plants were taken down when the facility’s production of nitric acid had to be halted in order to repair a leaking joint in Pryor’s nitric acid plant. The completion of the nitric acid plant repairs and the resumption of urea and UAN production are expected to occur within the next ten days. In the interim, Pryor has been transporting a portion of its ammonia production to the El Dorado, Ark., facility for use in the production of ammonium nitrate. Management now expects fourth-quarter UAN sales to be 70,000-80,000 st down from the earlier projections of 100,000-110,000 st. These lost sales volumes coupled with the cost of repairs and reduced absorption of fixed costs is expected to lower fourth quarter 2015 operating income by approximately $3.5-$4.0 million.

Greenwell tapped for top LSB job

LSB Industries Inc.’s board of directors has appointed Interim CEO Daniel Greenwell as president and CEO. He has been interim CEO since September 2015.

Greenwell initially joined the LSB board himself at the urging of activist shareholder Starboard Value LP (GM April 10, 2014). He was Terra Industries Inc.’s corporate controller and senior vice president and CFO from 2005 until the CF Industries Holdings Inc. acquisition in 2010. He served as partner and CFO of a private equity investment and advisory firm since September 2014. In 2013-2014, he was executive vice president and CFO of Sabre Industries Inc., which makes utility and cell towers. From 2012-2013, he held similar positions with Tronox Ltd., a producer and marketer of titanium dioxide pigment. He has also worked for Belden Inc., Zoltek Companies Inc., Sigma Chemical Co., and KPMG. He is a CPA and has a B.S. in Accounting from Truman State University.

CF reports start-up of new Donaldsonville urea plant

CF Industries Holdings Inc. announced on Dec. 16 that the new urea plant at the company’s Donaldsonville Nitrogen Complex in Louisiana has been operating since Nov. 17, 2015, and has achieved consistent, stable operation. The plant has produced more than 80,000 tons of granular urea since start-up, CF reported.

“Start-up of the new urea plant in Donaldsonville is a significant milestone in our capacity expansion projects and for the future of CF,” said Tony Will, CF’s president and CEO. “Donaldsonville will play a key role as we become an even larger global supplier of nitrogen-based fertilizer. Its increased capacity, along with its unmatched logistics capability, will allow us to serve customers in North America and around the world in the most efficient way possible while providing attractive returns for shareholders.”

This is the first plant to be commissioned and started up as part of CF’s major capacity expansion projects in North America, CF said, and the first new world-scale urea plant to be completed in North America since 1998. Upon completion of the capacity expansion project, the Donaldsonville Nitrogen Complex will be the largest nitrogen facility in the world. Output for urea at Donaldsonville in 2016 is expected to range from 2.2-3.2 million product tons depending on product mix, up from an average annual product of 1.7 million tons currently.

Ceres makes deal with Koch

Ceres Global Ag Corp. said Nov. 17 that it has entered into an agreement with Koch Fertilizer Canada ULC for the storage and handling of dry fertilizer products at Ceres’ Northgate Commodities Logistics Centre in Northgate, Sask. at the Canada–United States border (GM Nov. 16, p. 1).

Once constructed, the Ceres facility will include three storage bays with a total capacity of approximately 26,000 st. Koch will have exclusive use of the facility upon its completion in May of 2017.

“This agreement with Koch is an important milestone in our build-out of the Northgate facility,” stated Patrick Bracken, Ceres CEO. “The addition of fertilizer to the suite of commodities that we are able to handle at Northgate will further diversify and grow our revenue at this facility. In addition, we expect that Ceres’ ability to offer fertilizer distribution will make Northgate a more attractive destination for farmers to sell their grain. The opportunity for farmers to backhaul fertilizer is expected to increase Northgate’s draw area in Saskatchewan and Manitoba for grain origination.”

 “We continue to look for innovative ways to provide a portfolio of fertilizer products to our customer base,” said Todd Minnihan, managing director, for Koch Fertilizer Canada ULC. “The relationship with Ceres will help Koch serve the needs of our Western Canadian customers.”

Land O’Lakes, United Suppliers to proceed with merger

The owners of United Suppliers, Inc., Ames, Iowa, and members of Land O’Lakes Inc., Arden Hills, Minn., have overwhelmingly approved the merger of United Suppliers with Land O’Lakes’ crop inputs business (GM July 6, p. 1). The two say the merger will build on the recent successes of the two companies and aims to create a single, relevant and competitive system of independent agricultural retailers.

"This merger will allow us to continue to meet our customers’ needs through each company’s successful go-to-market strategy while providing for the size and scale to compete in an environment of consolidating suppliers and competitors," said Chris Policinski, president and CEO of Land O’Lakes, Inc. "We are excited to bring our WinField business and United Suppliers together and expect our members, owners and customers will benefit greatly from this merger."

Under the merger, United Suppliers will join with Land O’Lakes, Inc.’s crop inputs business. The first step of the merger will be to combine the two companies’ seed and crop protection businesses under Winfield US, LLC, and a second step will merge the crop nutrient business.

Customers are expected to benefit from expanded product offerings, enhanced precision agriculture services, tools and technologies, improved product insights, consulting services and more.

"Both organizations exist to increase our customers’ capabilities and competitiveness. By coming together, we are true to our shared purpose, and we also preserve our different approaches to best serve a wide variety of customer needs," said Brad Oelmann, president and CEO of United Suppliers. "Together, we are positioned to protect and build the future of independent agricultural operations in an environment of consolidation."

In 2014, WinField had $4.9B in seed and crop protection product sales and United Suppliers had $2.6B in crop protection, seed and crop nutrient sales. Closing is anticipated in October 2015.

The merger of the United and Land O’Lakes crop nutrient businesses will have a delayed close until either the termination of an existing non-compete agreement or September 2017, whatever comes sooner, Green Markets was told earlier by Land O’Lakes/United sources. Industry sources tell Green Markets the agreement in question is one between Land O’Lakes and CHS Inc. The two were once partners in the disbanded Agriliance LLC.

Park approves Sirius mine

Proposals to build a potash mine near Whitby in the U.K. have been approved by the North York Moors National Park Authority. Members of the planning committee have voted to grant planning permission for the major development.

However, the decision was a close 8-7 vote.

Sirius Minerals now looks set to build the world’s largest potash mine on land near Sneaton. Once up and running production is expected to be over 6 million mt/y, with eventual plans to go to 13 million mt/y. The project had received widespread support from councils and MPs. The NPA approval was the last one needed, though the company must still finalize financing for the project.