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Tessenderlo Acquires Spanish Rendering Assets

Tessenderlo Group, Brussels, on Jan. 3 announced that its Akiolis business unit (Bio-valorization segment) has acquired the real estate and production assets of the former Spanish rendering company Promed 202, Ribera d’Ondara, Lleida, Spain.

The plant specializes in the rendering of pork and poultry, and is located in one of the densest regions for pork and poultry farms in Spain. Tessenderlo said the acquisition will expand the activities of Akiolis on the Iberian Peninsula and strengthen its position in the European rendering market. Akiolis intends to resume operations in the course of the first quarter of 2023 under the name Akiolis Iberia.

Akiolis, with its headquarters in Le Mans, France, specializes in rendering activities and the production of high-value proteins and fats derived from animal byproducts. The industrial processes of Akiolis allow the valorization of its ingredients in markets such as the organic fertilization, pet food and animal nutrition, aqua feed and oleo chemistry, gelatins, cement plants, and energy sectors. In France, Akiolis currently has 12 production plants, with one of those in Violleau for organic fertilizers.

Tessenderlo said the transaction will have no material impact on its results.

Arkema Completes Febex Sale to Prayon

Arkema on Jan. 3 finalized the divestment of Febex, a company specialized in phosphorus-based chemistry, to Belgian group Prayon (GM Oct. 28, 2022).Febex is a global player in phosphorus derivatives (high purity phosphoric acid, sodium hypophosphite, and derivatives), used primarily in electronics and in the pharmaceuticals industry.

Arkema said Febex has been a part of the Performance Additives Business Line, with little integration within Arkema’s other activities.

Febex reported sales were around €30 million in 2021. It employs 59 people, and operates one site in Switzerland.

Prayon said the acquisition marks an important step in strengthening its position in phosphorus chemistry. Prayon will enter the electronics market, which it said has strong growth potential in Europe and the US. The acquisition will also enable Prayon to enter the pharmaceutical sector, gain access to the polyphosphoric acid market, and broaden the range of industrial solutions downstream of purified phosphoric acid production, in which Prayon already participates in Europe.

Prayon is jointly owned by OCP of Morocco and SRIW of Belgium.

Brenntag Ends Talks with Univar

Univar Solutions slipped about 2% on Jan. 3 after the chemical distributor confirmed that German-based Brenntag SE ended discussions about a potential takeover (GM Dec. 2, 2022), according to Bloomberg. Univar said it would continue talks related to “other indications of interest” that it has received with respect to a potential transaction. However, it said there is no assurance that the ongoing process will result in a transaction.

A Univar-Brenntag deal would have created the world’s largest chemical distributor and establish a company with more than $30 billion in sales.

Mexico to Expand Free Fertilizer Program

Mexico will expand its free fertilizer program to all 32 states in the country, Pemex CEO Octavio Romero said in a press briefing on Jan. 4, according to Bloomberg. The program will expand to cover 2 million farmers and producers in 2023, said Mexico Agriculture Minister Victor Villalobos.

This would imply movement of 1 million mt of fertilizer. Pemex plans to produce all fertilizer for the program assisting farmers by the end of 2024.

EPA, Army Issue New WOTUS Definition; TFI, Other Farm Groups Voice Opposition

The US Environmental Protection Agency (EPA) and the Department of the Army on Dec. 30 announced a new rule defining Waters of the United States (WOTUS), restoring protections that were in place prior to 2015 under the Clean Water Act (CWA) but with “updates to reflect existing Supreme Court decisions, the latest science, and the agencies’ technical expertise.”

According to the two agencies, the final rule “returns to a reasonable and familiar framework founded on the pre-2015 definition” that covers those waters that Congress sought to protect in the CWA, including traditional navigable waters, the territorial seas, interstate waters, as well as upstream water resources that significantly affect those waters.

“Following extensive stakeholder engagement, and building on what we’ve learned from previous rules, EPA is working to deliver a durable definition of WOTUS that safeguards our nation’s waters, strengthens economic opportunity, and protects people’s health while providing greater certainty for farmers, ranchers, and landowners,” said EPA Administrator Michael S. Regan.

“The rule’s clear and supportable definition of waters of the United States will allow for more efficient and effective implementation and provide the clarity long desired by farmers, industry, environmental organizations, and other stakeholders,” added Assistant Secretary of the Army for Civil Works Michael L. Connor.

Despite those assurances, numerous ag groups quickly voiced their opposition to the new WOTUS definition, including The Fertilizer Institute (TFI), the American Farm Bureau Federation (AFBF), and the National Association of State Departments of Agriculture (NASDA).

At issue is the new rule’s approach to streams, wetlands, lakes, and ponds – water bodies that are not directly connected to navigable waters, but could have a “significant nexus” to them. The “significant nexus” standard stems from a divided US Supreme Court decision in 2006 that formed the basis for the Obama-era WOTUS definition in 2015, which the Trump administration scrapped in 2019 and then replaced in 2020 with the Navigable Waters Protection Rule (NWPR).

While criticized by environmental groups, the NWPR – which scaled back the types of waters falling under CWA jurisdiction – was strongly supported by both TFI and the Agricultural Retailers Association (ARA). Under the Biden administration, however, EPA and the Army announced in June 2021 that they intended to draft yet another WOTUS definition that built upon the pre-2015 rule, the Obama-era rule, and the NWPR.

In the new rule, according to Bloomberg Law, EPA tried to clarify “significant nexus” by adding more criteria to the test, including a water body’s distance to a navigable water, the frequency and duration of water flow, and a smaller body’s contribution of flow and sediment to a navigable water body.

These factors determine whether a smaller water body has a “material influence” on a larger one, and therefore falls under CWA protection, the new rule states. The EPA also included a new framework for evaluating waterway and wetlands protections, including whether the wetlands are “relatively permanent” and if the waters are “similarly situated” with other jurisdictional waters in a region or in their “catchment area,” according to Bloomberg Law.

But critics said these requirements essentially create a new legal standard that doesn’t add much clarity for farmers, property owners, and industry, and offers more opportunities for regulatory agencies to make judgement calls based on technical and policy considerations.

“The number one thing industry needs from regulatory bodies is clarity and certainty. The final WOTUS rule provides neither,” said TFI President and CEO Corey Rosenbusch in a Dec. 30 statement. “Many of our member companies must plan years in advance to obtain all necessary permits in accordance with the CWA. We need regulatory certainty and predictability and have a strong interest in ensuring that the definition of WOTUS is clearly defined and consistently implemented across the nation.”

Rosenbusch also referenced a pending Supreme Court decision in Michael Sackett v. EPA, a pivotal case that involves an Idaho couple that for 15 years has been prevented from building a home on their 0.63-acre property in Priest Lake, Idaho, because EPA claims part of the property contains wetlands and is therefore subject to regulation under the CWA. Oral arguments were presented in October, and the Supreme Court is expected to issue a ruling early this year.

“In February we joined a chorus of other organizations and many members of Congress in urging the agencies to delay the rulemaking until after the Supreme Court has issued its ruling,” Rosenbusch said. “The ruling will likely negate or render irrelevant significant elements of the WOTUS rule and create even more confusion for businesses and landowners throughout the country.”

NASDA also issued a statement on Dec. 30, stressing the role of states in regulating non-navigable waters and arguing that the CWA establishes limits on federal jurisdiction and the role of the federal government to regulate interstate commerce.

“The EPA’s latest rule on defining waters of the United States is a statement of federal overreach that ignores states’ authority to regulate intrastate water quality and the CWA’s statutory mandate for cooperative federalism,” said NASDA CEO Ted McKinney. “In turn, although we recognize EPA’s attempt at clarifying through a roster of exemptions, its rule ignores the voices of nearly all in American agriculture who have long been seeking clarity on this issue, especially regarding the debate over what is and is not a navigable water.”

AFBF President Zippy Duval added his voice to the debate as well, saying he was “deeply disappointed” in the new rule. “Instead of making federal regulations more clear, the rule reinstates confusing standards that have already caused decades of uncertainty and litigation,” he said. “Most importantly, the rule gives the government sweeping authority over private lands and will require teams of lawyers and consultants for common and necessary farming activities.”

Russian Fertilizer Output to Drop 8%, Exports Down 15%, in 2022, Says RFPA

Russia’s output of all types of mineral fertilizers is expected to have fallen to 50.3 million mt in 2022, an 8% year-over-year fall, Russia’s Tass news agency reported, citing the Russian Fertilizers Producers Association (RFPA).

The producer association also sees lower exports of mineral fertilizers in 2022, predicting a 15% fall to 31.6 million mt compared with 2021.

RFPA reported that the production downturn is mainly on account of lower potash production, where Russian producers faced “a significant reduction” in export capabilities due to sanctions, it said. The association, citing its own data, sees potash production plummeting 36% to 9.6 million mt last year.

In contrast, output of urea is expected to have grown by 4% in 2022, to 9.3 million mt, while production of ammonium nitrate is seen increasing almost 5% to 11.2 million mt.

In the meantime, purchases of mineral fertilizers by Russian farmers is expected to have risen by 15% in 2022.

Cold Weather Impacts LSB Plants

LSB Industries Inc. reported on Dec. 30 that its Cherokee, Ala., and El Dorado, Ark., facilities were shut down as a result of the extremely cold temperatures that impacted much of the US in late December 2022. The El Dorado facility has since returned to service. Repairs are currently underway at Cherokee, and the facility is expected to resume production by mid-January 2023.

LSB estimates that the unplanned outages at the two facilities will collectively reduce fourth-quarter 2022 operating income by approximately $5-$7 million, largely attributable to lost sales and reduced absorption of fixed costs.

At least two other fertilizer producers surveyed by Green Markets said their fertilizer operations had experienced interruptions due to the cold weather in late December; however, they said those plants are now back to normal operations.

Several fertilizer producers reported being offline due to cold weather in February 2021 (GM Feb. 19, 2021), with many citing interruptions in electricity and gas supply. The outages were significant and had a major impact on spring supplies; and US fertilizer prices began to climb.

Yara to Modify NH3 Terminals in Germany to Boost Hydrogen Economy

Yara International ASA plans to modify its ammonia terminals in Germany after identifying “a significant potential” to increase ammonia imports into the country in line with growing market demand.

In total, Yara said it would be able to deliver 3 million mt of clean ammonia if demand is there. This equates to roughly 530,000 mt of hydrogen and will help speed up the hydrogen economy in Germany, it said.

Yara already operates the largest ammonia storage facility in Germany with two deep sea terminals for ammonia at Brunsbüttel and at Rostock.

It plans to modify its export terminal in Brunsbüttel to import as well by the summer of 2023, while it said its terminal in Rostock can increase imported volumes. Yara currently imports 600,000 mt of ammonia annually in Rostock, which is Germany’s largest ammonia storage capacity.

“With additional tank capacity we can expand our import capacity much further,” said Yara Brunsbüttel Plant Manager Yves Bauwens.

Yara subsidiary Yara Clean Ammonia is currently rolling out a portfolio of decarbonized ammonia production. As these decarbonized projects are developed, Yara said it will import clean ammonia to Germany using its fleet of ammonia carriers.

Already a major hydrogen player, the company produces and consumes approximately 7% of European hydrogen, according to its own data.

Belarus Exports 1 M Mt of Potash to China by Rail in 2022, Targets Pre-Sanctions Export Levels in 2023

Belarus substantially increased its exports to China by rail in 2022, which included more than 1 million mt of potash, Interfax reported on Jan. 5, citing Belarus Transport and Communications Minister Alexei Avramenko, as quoted by the BelTA state news agency.

According to the minister, Belarus sent 988 container trains to China last year, and Belarus is seeing “steady growth” in the trade.

The country plans to organize direct shipments of potash to Africa and Latin America, bypassing US and European Union traders in 2023, BelTA reported, citing Belarus First Deputy Prime Minister Nikolai Snopkov.

Belarus may also increase sales of potash on traditional markets by reducing the price, which “was rather high” in 2022, according to Snopkov. He said high prices naturally prompted the purchases, including those of potash, to decline on conventional markets – because farmers couldn’t afford it.

Snopkov sees the potash price going down, and be “more or less fair” in 2023 at about $420-$450/mt, and hence, to see the volume of sales to grow.

Belarus, the minister said, plans to bring the country’s volume of potash exports back to pre-sanctions levels in 2023.

Nutrien President and CEO Ken Seitz last month said Belarus potash exports fell at least 50% year-over-year in 2022.

Snopkov – as cited by BelTA – claims Belarus is not experiencing any problems with shipping cargoes via Russian seaports, saying the available infrastructure is sufficient.

According to Avramenko, 19 Russian ports are used for shipping Belarusian cargoes. According to the Transport and Communications Minister, in 2022 Belarus and Russia signed two basic agreements on transshipping oil products and foreign trade cargoes. The latter primarily comprise potash, nitrogen fertilizers, metallurgy products, and woodworking goods.

Indonesia’s Pupuk Kaltim Mulls $500 M – $1 B IPO

Indonesian state-owned fertilizer company PT Pupuk Kalimantan Timur is reported to be planning an initial public offering IPO in Jakarta in 2023 that could raise between $500 million and $1 billion.

Parent company PT Pupuk Indonesia could sell primary shares representing a 10%-20% stake in the subsidiary company, according to a Reuters report this week, citing two unnamed sources with direct knowledge of the matter.

PT Pupuk Indonesia owns 99.99% of Kalimantan-based “Pupuk Kaltim.”

At least two banks – reportedly Citigroup and Credit Suisse – have been approached for the deal, according to the report, and more could join the syndicate.

The proceeds of the IPO, if it goes ahead, will be used for capacity expansion, according to the report, citing one of the sources.

Pupuk Kaltim has been part of PT Pupuk Indonesia since 2012, and is now Indonesia’s biggest ammonia and urea producer. The producer has four ammonia plants with total production capacity of 2.18 million mt/y and five urea plants producing 3.77 million mt/y, according to Green Markets database.

The proposed Pupuk Kaltim IPO is among four potential state firm public offerings Indonesia is said to be considering for 2023, according to local media reports last month.