Scotts Miracle-Gro Co., Marysville, Ohio, reported on Oct. 4 that Cory J. Miller, Executive Vice President and CFO, left his position effective Aug. 29, 2022.
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Arianne Phosphate – Management Brief
Arianne Phosphate, Saguenay, Quebec, a development-stage phosphate mining company, advancing the Lac à Paul project in Quebec’s Saguenay-Lac-Saint-Jean region, announced on Oct 3 that Geneviève Ayotte will be joining the company as its CFO, replacing Pier-Élise Hébert-Tremblay.
Ayotte is a member of the Certified Professional Accountants of Quebec and graduated from HEC Montréal with a Bachelor’s Degree in Business Management and a D.E.S.S. in public accounting. Outside of her accounting profession, she also serves as President of Women in Mining – Montreal.
The company said that since 2008 she developed extensive mining knowledge, specifically in public accounting, at PricewaterhouseCoopers LLP. Among the many mining clients she worked with, Arianne said she has been an important member of the team working on the Arianne account from 2016-2021, serving most recently as Audit Director.
Hocking International – Management Brief
Houston-based Hocking International reported that Scott Messer has been promoted to Director – Ag Business Unit, and Joe Enciso has been promoted to Director – T&O Business Unit. Messer has been with Hocking International for five years, and Enciso has been with the company for six years.
“Scott and Joe are both experts in their respective industries and are very capable leaders,” said Mark Auchampach, Chief Commercial Officer. “As Hocking continues to grow and expand to meet the needs of our customers, having business unit leaders with their experience and capabilities will be critical to our success.”
Hocking also added new sales personnel to its commercial team. Jeremy Buhl and Eric Skorich have joined the company as Area Sales Managers, with Buhl responsible for expanding Hockings’s footprint in the Midwest, and Skorich responsible for Turf and Ornamental sales in the Midwest and Mid-Atlantic markets.
Buhl joined Hocking in 2021, having previously worked for PBI Gordon, Nilefos West, and Farmland Industries. Buhl is based in Papillion, Neb., and will report to Messer. Skorich most recently worked for Bayer Environmental Science and is a Certified Class A Golf Course Superintendent. Skorich will report to Enciso.
Mosaic Reports Modest Damage from Ian, Expects to Lose Up to 250,000 mt, 1-2 Weeks for Repairs
The Mosaic Co. reported on Oct. 3 that significant flooding and high winds were experienced throughout Central Florida during Hurricane Ian and caused modest damage to its phosphate facilities and supporting infrastructure.
However, the company said early assessments indicate that phosphate production could be down by approximately 200,000-250,000 mt, split roughly evenly between the third and fourth quarters of 2022. This could be valued as high as $190 million at Tampa based on current Florida phosphate export prices in Green Markets. Repairs are expected to be completed over the next 1-2 weeks.
While Mosaic plants were being repaired, the company was reported to be loading fertilizer again at Tampa, according to an Oct. 3 report by Bloomberg. The ship Basic Challenger returned to Mosaic’s terminal in Gibsonton, Fla., on the east side of Tampa Bay. The ship moved away from Tampa as the storm approached and moved back to the terminal, ship-tracking data showed.
In addition to production impacts, the timing of shipments was also affected by the storm. Phosphates sales volumes in the third quarter are now expected to total 1.60-1.65 million mt, as port and rail closures delayed late third-quarter shipments to October. Mosaic plans to provide further updates when it reports third-quarter results.
As Mosaic completes repairs, The Mosaic Co. Foundation is donating $100,000 to its most hard-hit operating areas. These funds will be used to support local recovery efforts in Florida’s Hardee, Manatee, and DeSoto counties. Prior to hurricane season beginning, Mosaic provided $55,000 in storm preparation funds to organizations across Central Florida.
In addition, The Mosaic Co. Foundation contributed $300,000 to an Employee-to-Employee Assistance Fund. This fund will be dispersed to employees who need financial assistance with hurricane recovery efforts throughout Central Florida. The company will also double match any contributions made by Mosaic employees to this fund.
In other Ian fertilizer-related news, Sylvite Florida was able to return its two warehouses in Lakeland and Bartow, Fla., to operation this week after closing both locations on Sept. 27 in preparation for Ian, a company source told Green Markets. Both sites sustained minor roof damage and flooding from the storm, along with power outages, but no fertilizer materials were damaged.
Florida Fertilizer’s blending operation in Wauchula, Fla., was reportedly in Ian’s direct path. Industry sources said the site did not sustain major damage from the storm, but power outages prevented the facility from returning to operation early in the week. Efforts to reach Florida Fertilizer were unsuccessful at midweek.
Alaska, Energy Companies Assess Blue NH3 Project; Nutrien Could Benefit
The state-owned Alaska Gasline Development Corp. (AGDC) on Oct. 4 announced the signing of a Memorandum of Understanding (MOU) with Mitsubishi Corp., TOYO Engineering Corp., and Hilcorp Alaska to assess the potential of utilizing North Slope natural gas to produce blue ammonia in the Cook Inlet region of Southcentral Alaska. The gas would be transported via a long-proposed 807-mile pipeline to Nikiski on the Kenai Peninsula.
The parties said the carbon dioxide generated from this process is able to be captured and sequestered in secure underground geologic formations, and Alaska’s Cook Inlet basin has been identified by scientists as having world-class carbon sequestration potential. This assessment project will further define Cook Inlet’s sequestration potential and the economics for producing blue ammonia alongside LNG in Alaska.
The parties said the project has the potential to liquefy some 20 million mt/y of LNG for export. Some of that gas could be used for blue hydrogen and ammonia. AGDC had not responded to inquiries as to how much blue hydrogen and ammonia production is under consideration.
However, in a May presentation, Alaska LNG Project Manager Brad Chastain said that an “existing ammonia plant is well positioned to be the first mover in the market.” Nutrien Ltd. has a long-idled nitrogen plant on the Kenai Peninsula. Nutrien’s legacy company, Agrium Inc., permanently closed the plant in late 2007 (GM Oct. 1, 2007) due to a shortage of natural gas. Nutrien/Agrium has since considered options for bringing the plant back up, including coal gasification, the North Slope pipeline, and new gas discoveries in Cook Inlet, but has kept the complex down.
Back in 2013, plant capacity was put at 1.35 million st/y of urea and 1.1 million st/y of ammonia (GM Nov. 4, 2013). “We are aware of several very early-stage proposals for the supply of affordable natural gas that could allow us to bring our operations on the peninsula back online, and we continue to work closely with the state as these opportunities are developed,” a Nutrien spokesperson told Green Markets.
“We are encouraged by the state’s interest in projects on the peninsula and have maintained our facilities to ensure that they are available for start-up if the conditions arise that will allow for sustainable operations there,” the spokesman continued. “However, we also recognize that these gas projects are still in the early stages of development and cannot offer further comment at this time.”
In addition to Cook Inlet’s carbon sequestration capabilities, the parties factored other unique Alaska advantages into the decision to initiate the ammonia assessment. Round-trip tanker transport from Alaska to key Asian markets is more than 12,000 miles shorter than from the US Gulf Coast, reducing costs and shipping emissions. They also said Alaska has a 45-year record of success exporting LNG to Asia.
PJSC PhosAgro – Management Brief
The Board of PJSC PhosAgro, Moscow, elected Independent Director Viktor Cherepov as its new Chairman at an Oct. 3 meeting, the fertilizer group announced on Oct. 4. The previous Chairman, Independent Director Andrey Sharonov, who had held the post in “an acting” capacity, earlier notified the group that he wasstepping down from the position.
Profertil SA – Management Brief
Argentina’s Profertil SA, Bahía Blanca, announced on Sept. 30 that its Board has named Marcos Sabelli as the company’s new CEO, Latin Finance reported. Sabelli previously was Vice President of Strategy and Business Development at Argentine state-owned energy company YPF SA.
Grupa Azoty 2Q/1H Profits Boost Despite Challenging Market Conditions
Grupa Azoty SA reported a more than tripling in net profit to Pln799.6 million (approximately $164.6 million at current exchange rates) on consolidated revenue of Pln6.41 billion for the second quarter ended June 30, 2022.
EBITDA increased by 243% to Pln1.24 billion. Consolidated revenue was up by 100% year-over-year.
The group said the second-quarter results were strongly impacted by the turmoil caused by Russia’s invasion of Ukraine, which adversely affected the availability and prices of feedstocks, pushing up prices of final products across all segments.
Azoty said as a result of lower exports, the volumes of fertilizers supplied by the group to the domestic market were “significantly larger” compared with the same period last year.
For the first half of 2022, the group posted a net profit of Pln1.68 billion on consolidated revenue of Pln13.24 billion, versus the year-earlier Pln253.7 million and Pln6.53 billion, respectively. Six-month EBITDA increased to Pln2.58 billion.
Commenting on the half-year results, Azoty said the results were bolstered by product prices prevailing in the European markets where the group operates, but were adversely affected by record prices of feedstocks used in production processes and lower sales volumes of most fertilizer, chemical, and plastic product categories.
Azoty said it was operating at full available capacity in the first half of the year, “actively responding to fertilizer demand in the domestic market at the peak of the spring fertilizer season.”
But it said in the third quarter, record natural gas prices drove fertilizer prices to levels that became “unacceptable” to end customers, and led the group to the decision to reduce production at three group companies.
Azoty’s Fertilizers/Agro business posted a 336% year-over-year increase in second-quarter EBITDA toPln657.3 million.
The group cited high prices of fertilizer feedstocks, particularly natural gas, potassium chloride, and phosphate rock, continued into the reporting quarter.
Azoty reported that Fertilizers/Agro’s sales volumes in the second quarter fell 11% year on year, with a decline of 21% reported for compound fertilizers volumes.
Yara Calls for Urgent Action to Reduce Europe’s Food Dependency on Russia
Yara International ASA this week called on the European Union (EU) and national governments to act “urgently and decisively” to ensure Europe reduces, and not strengthens, its dependency on Russia for food and fertilizers.
The Norwegian major – joining the European Parliament and other stakeholders – is calling for an EU strategy for fertilizers.
In a statement on Oct. 6, Yara proposed that the EU’s package of solutions for the European fertilizer industry should include measures to:
- Firstly, secure continued access to natural gas. Natural gas is key for producing fertilizers and is also crucial for lowering the environmental impact of other sectors, the company said.
- Secondly, accelerate the use of renewable energy. The transition to more sustainable and resilient fertilizer production by using renewable energy and recovered nutrients requires large-scale investments, said Yara. It believes innovation and investment support should be earmarked for the fertilizer sector to meet the three objectives of accelerating decarbonization; reducing the industry’s reliance on fossil fuels; and reducing its dependency on Russia.
- Thirdly, reinforce Europe’s strategic autonomy in fertilizers. Yara argues that the European authorities should prioritize the supply of raw materials for European fertilizer production to avoid new dependencies rather than lowering barriers or imports of finished fertilizers from Russia or elsewhere.
The company believes the European Commission should also monitor and control the volumes of fertilizer products coming into Europe from Russia and Belarus, “especially as Russian fertilizers have roughly twice the greenhouse emissions of fertilizers produced in Europe,” it said.
“A strong European fertilizer industry is crucial not only for ensuring food security in Europe and globally, but also for ensuring that Europe can continue to take the lead in the green transition,” said Yara President and CEO Svein Tore Holsether.
“It is imperative that the war on Ukraine does not destroy the work towards a net-zero future,” he said.
Instead of weakening the position of the European fertilizer industry, which is a frontrunner in decarbonization, Holsether argues “massive, coordinated efforts” are needed to reach zero emissions, while at the same time reducing Europe’s dependencies on Russia.
Curtailed production in Europe reduces worldwide availability of fertilizers and has direct, negative consequences for the global food system and global food security, said the CEO.
The Norwegian major reminded the essential plant nutrients provided by mineral fertilizers are estimated to produce 50% of the food grown today.
Russia to Set Export Duties on Fertilizer, Coal
As anticipated, Russia will introduce export duties on fertilizers – as well as on coal – next year.
For phosphate and nitrogen fertilizers, the baseline has been set at $500 per mt, and for potash at $400 per mt, according to an Interfax report on Oct. 3, citing Russia’s Finance Minister Anton Siluanov. The minister was speaking at preliminary hearings on the draft budget in the country’s Federation Council.
The issue of export duties on fertilizers has been under discussion for some time, having been triggered by the sharp rise in prices. However, Russian producers had managed to avoid the measure by freezing prices to domestic consumers.
Reports last month suggested the Finance Ministry was considering imposing the duty only for a six-month period. However, the proposed period for the duties to run is currently unclear.
Budget revenues from the planned export duties on fertilizers and coal in 2023 are estimated at RUB135.6 billion (approximately $2.26 billion at current exchange rates), according to an explanatory note to the draft budget for 2023-2025 submitted to the State Duma, cited by the report.
According to Russia’s Kommersant newspaper, citing unnamed sources, around RUB105 billion is expected to be collected from Russia’s fertilizer industry in 2023.
Analysts cited by Interfax estimate the export duties will amount to up to 10% of the Russian fertilizer industry’s EBITDA in 2022-2023.
They see the duties, together with falling phosphate fertilizer prices, continuing to have an adverse effect on the shares of Russian phosphate group PJSC PhosAgro.
Russian nitrogen and compound fertilizers have been subject to export quotas since Dec. 1 last year (GM Nov. 5, 2021), and were subsequently extended (GM June 3, p. 1; May 20, p. 31). The current quotas are set to remain in place until Dec. 31, 2022, but the Industry and Trade Ministry has not ruled out extending the quotas until May 2023 (GM June 10, p. 1).