All posts by mickeybarb@charter.net

Jim Hicks and Co. – Management Brief

California, Management Briefs, Obituary

Jim Hicks, 83, founder of Jim Hicks and Co., Brea, Calif., passed away on Sept. 13. He was born on Aug. 9, 1939, and was a graduate of Purdue University in 1961. He started his ag career working for Chevron immediately after graduating and was transferred to California in 1968. Later, he started Western Ag Supply with a partner in 1975. Hicks eventually went off on his own and started Jim Hicks and Co. in 1983.

Hicks retired in 2015, but continued as a Board member for Ag in The Classroom and started endowments for agricultural scholarships at Purdue University, Cal Poly Pomona, and University of Arizona. He was a strong supporter of the Western Plant Health Association for over 40 years.

Hicks is survived by his wife, Neta; four children, Pat, Grady, Steve, and Jennifer; and daughter-in-law Marlene. A celebration of life is being planned in the near future.

Belarus Plans Small Potash Shipments for Iran via Dagestan, Report Says; Brazil Cargo on the Water

Belarus, Iran, News, News Briefs, Potash Muriate

Belarus plans to start the transshipment of potash for delivery to Iran via Dagestan’s Makhachkala port on the southwest coast of the Caspian Sea, according to a Tass report, citing a port official. According to the executive, Belarusian potash producer Belaruskali OAO will ship over 8,000 mt of potash through Makhachkala port this month, with the first shipment of 4,000 mt expected to be delivered in the second half of September.

However, it is unclear what further Belarusian potash volumes are planned to be transshipped through Makhachkala, or if transshipments also will be made to other destinations.

According to Trade Data Monitor (TDM), Iran has never imported potash from Belarus. Iran’s total potash imports in 2021 were 98,079 mt, with most of those tons coming from China and Uzbekistan, according to TDM.

Dagestan is a Russian republic and Makhachkala is the only deep-water and non-freezing Russian port on the Caspian Sea.

Belaruskali in early July was reported to have started to ship products through Russian ports, according to Russia’s Kommersant newspaper, citing unidentified people familiar with details (GM July 8, p. 1).

According to recent line-up reports from World Shipping Alliance, about 28,000 mt of Belarusian potash has left the Russian port of Novorossyisk, destined for Brazil. The cargo departed in mid-July and is expected to arrive in Brazil later this month. It is Belarusian Potash Co.’s (BPC), the marketing/export arm of Belaruskali, first officially announced cargo for Brazil since February

Belaruskali in early July was reported to have signed a contract with St. Petersburg, Russia-based operator Keystone Logistics LLC to transship 2 million mt of potash in containers through 2023, according to Bloomberg, citing the Kommersant report.

Shipments were to be directed through the Petrolesport and Neva-Metal terminals in St. Petersburg’s Bolshoi Port, as well as through the Rybny Port in Vladivostok.

A delegation from Belarus in early September was reported to have met with Murmansk region authorities to discuss the transshipment of potash via Murmansk. The port has access to the Atlantic and Pacific Oceans via the Northern Sea Route.

Belarus has not been able to export potash – or NPKs – via Lithuanian rail since Feb. 1 following the Lithuanian government’s decision to end the railway transit contract between the country’s state-owned railway company Lietuvos Geležinkeliai’s (LTG) and Belaruskali over national security concerns (GM Jan. 14, p. 1). The decision followed the imposition of European Union (EU) and US sanctions on Belarusian potash trade.

Topsøe, First Ammonia Eye 5 M mt/y Green NH3 from Major Electrolyzer Deal

Featured, Green Ammonia, News, Northeast, Scandinavia

Danish technology provider Topsøe A/S, Copenhagen, and New York City-headquartered First Ammonia LLC on Sept. 14 inked a capacity reservation agreement to kickstart the global market for green ammonia.

The deal provides for First Ammonia’s initial purchase of 500MW of Topsøe’s solid-oxide electrolyzers (SOEC). The deal is expandable to up to 5GW over its lifetime.

“At 5GW, this would be the largest ever electrolyzer reservation of any type,” the companies said. “The production of 5 million mt/y of green ammonia would eliminate 13 million mt of CO2 emissions annually, the equivalent of taking 9 million petrol-fueled cars off the road.”

First Ammonia is developing a global network of modular, commercial-scale plants to produce green ammonia from renewable energy utilizing Topsøe’s SOEC technology. The first 500MW of capacity will be installed in First Ammonia’s green ammonia plants under development in the southwestern US and in Wilhelmshaven, Germany. Operations are planned for 2025, and are expected to be the world’s first commercial-scale, green ammonia production facilities.

According to its website, First Ammonia said the plant in Wilhelmshaven is expected to be fully operational in first-quarter 2025. In addition to rapidly rolling out green ammonia projects in Europe, the US, and Southeast Asia, First Ammonia said it intends to build the first combustion engine to run on 100% ammonia through its affiliate, First Ammonia Motors.

First Ammonia did not specify where the US plants would be. The company’s Head of US Project Development, Lee Raymond, has over 20 years of project management experience, the last 10 of which were spent developing ammonia and methanol plants in the US, most recently with the Pacific Coast Fertilizer project in Longview, Wash., which did not advance (GM Aug. 7, 2020).

First Ammonia is an affiliate of the $5.5 billion investment manager, Christofferson, Robb & Company, which has offices in New York City and London.

Topsøe’s SOEC manufacturing plant is to be built in Herning, Denmark, and has recently received the final investment go-ahead from the company’s board.

Russia Says Gas Exports to Europe to Fall 66%

Europe, Natural Gas, News, News Briefs, Russia

Russian natural gas exports to Europe will fall roughly 66% this year, according to a Bloomberg report, citing the Kremlin’s Deputy Prime Minister Alexander Novak, speaking on Sept. 15. The announcement comes even as Russian gas major PJSC Gazprom increases output.

Russian gas exports to Europe will fall by 50 billion cubic meters (bcm), according to Novak. Exports to the continent in 2021 were 150 bcm.

Russian gas accounted for some 40% of Europe’s supply before Russia’s invasion of Ukraine. But according to the report, that share has now fallen to just 9%.

EU to Propose Mandatory Power-Demand Cut and Levy on Profits

Europe, News, News Briefs

The European Union (EU) is set to propose a mandatory target to cut the bloc’s power use, a step towards rationing, together with measures to funnel energy company profits to struggling consumers as it tries to stem the crisis.

The EU’s executive arm will propose its package this week, but it will still need to be unanimously agreed by Member States. However, there are deep divisions among individual states, and individual governments are likely to push for changes to the proposed plan

European Commission President Ursula von der Leyen’s original plan had included the controversial idea of trying to cap the price of imported Russian gas. That element has been postponed for more talks.

Gas prices are already easing, at least in part because of the bloc’s plans. Dutch TTF front-month gas (currently October), the European benchmark, was down 1.736% on the day on Sept. 15, closing at €214.1 a megawatt-hour (MWh). TTF front-month gas had hit €339.195 a MWh hit on Aug. 26 – close to the all-time high of €345 per MWh seen in early March.

Germany Considers Possible Nationalization of Uniper, Stakes in Other Gas Buyers

Germany, News, News Briefs

Germany’s government is considering taking a controlling stake in the country’s energy major Uniper SE and “is open to” fully nationalizing the company, which is Germany’s biggest gas importer, Bloomberg reports.

The potential move is designed to ensure the energy company’s survival in the coming months and head off a collapse in Germany’s energy system. Russia’s PJSC Gazprom on Sept. 2 said it would not reopen the key Nord Stream I pipeline that brings Russian gas to Europe via Germany (GM Sept. 2, p. 35), while Moscow this week said Russian gas exports to Europe will fall roughly 66% this year (see separate story).

Düsseldorf-based Uniper already has drawn on a state support package that could be worth as much as €20 billion (approximately $20 billion at current interest rates), according to unnamed sources cited by the report.

Soaring natural gas prices amid Russian supply cuts have triggered millions in daily losses at the energy firm, prompting the German government to step in with a rescue package in July, which included a 30% stake in the company.

The government is ready to inject more capital into Uniper and increase its stake above the 50% threshold, according to the sources cited by the report.

The government is also reported to be ready to take a stake in two other domestic gas suppliers – VNG AG, the troubled gas importing subsidiary of Germany utility company EnBW AG, and in Securing Energy for Europe GmbH, formerly Gazprom Germany GmbH.

A rescue package for VNG could include a capital injection that could give the government a minority stake in the company, according to a Bloomberg report, citing unnamed sources familiar with the matter.

CHS Plans to Return $1 B in Cash to Owners, Highest Annual Cash Return in CHS History

Featured, News, Northern Plains

CHS Inc., St. Paul, on Sept. 14 said it intends to return a total of $1 billion in cash patronage and equity redemptions to its owners in calendar year 2023, which is the largest annual cash return in CHS history. It brings the total amount returned to owners over the last 10 years to more than $3.1 billion.

The CHS Board elected to return $500 million in cash patronage based on business done with CHS in fiscal year 2022, which ended on Aug. 31, 2022. Additionally, the Board elected to return $500 million in cash to its owners through equity redemptions.

By comparison, cash patronage for fiscal 2021 was only $150 million, which included $50 million in cash patronage and $100 million in equity redemptions.

“The opportunity for owners to receive cash patronage and equity is a fundamental difference between the cooperative model and other businesses,” said Dan Schurr, CHS Board Chairman. “This critical difference means CHS owners share in the financial success of the company and can leverage that success to fuel strength and growth for their own businesses, their families and the communities we share.”

Final financial results for fiscal year 2022 are expected to be announced in November 2022. Additional patronage-related details will be available at that time, including the amount of fiscal year 2022 patronage equity certificates that will be distributed.

Ostara Breaks Ground on St. Louis Plant

Canada, Featured, News, Phosphate, Specialty, Western Cornbelt

Ostara Nutrient Recovery Technologies Inc., Vancouver, BC, on Sept. 7 broke ground on its new 200,000 st/y Crystal Green® fertilizer plant in St. Louis, Mo. The plant is expected to be completed in 2023 in time for the 2024 growing season.

“Access to world-class manufacturing talent, as well as the river, railways, and interstate in the heart of some of the most productive agricultural lands in the world makes St. Louis an ideal location for Ostara’s next phase as we realize our vision of global expansion,” said Ostara CEO Kerry Cebul. “We are thrilled to add over 40 new jobs to the St. Louis region, to promote economic growth, and to continue our mission to help feed the world while protecting it.”

Notable state and local officials, including Missouri Governor Mike Parson, as well as representatives from various partners that have helped bring the facility to life, were in attendance.

“As a farmer myself and Governor of the state of Missouri, I couldn’t be more excited that the future of phosphate fertilizer is going to be produced right here in St. Louis,” said Gov. Parson. “The agriculture industry constantly seeks new and innovative ways to support the goals of farmers and protect our natural resources. Ostara’s phosphate fertilizer provides a solution to farmers to deliver both. We’re proud Ostara has chosen Missouri for the home of its Crystal Green production facility.”

Ostara purchased its St. Louis facility from Bruce Oakley Inc. in 2021, with plans to construct a state-of-the-art granulation facility to produce its fertilizers (GM July 16, 2021). It said last August that it planned to invest $25 million in the facility (GM Aug. 20, 2021). The company already operates a facility in Florida, but desired an additional presence in the central part of the country.

Ostara’s Pearl® technology recovers phosphorus and nitrogen from industrial and municipal water streams and transforms these nutrients into Crystal Green® Pearl fertilizer, which is used in the agriculture and turf and ornamental sectors through a network of established retailers and distributors in North America and Europe.

Grupa Azoty Seeks Takeover of Hydropower Firm ZEW Niedzica

News, News Briefs, Poland

Poland’s Grupa Azoty SA is seeking to acquire hydropower producer ZEW Niedzica from the country’s State Treasury, according to a statement by the Polish fertilizer and chemicals company on its website.

Azoty said it has requested the State Treasury, the sole shareholder in ZEW Niedzica, to initiate a process “leading to the potential acquisition and merger of the hydroelectric producer into the Grupa Azoty Group.”

The potential acquisition comes as Azoty moves towards renewable energy sources. ZEW Niedzica’s annual electricity output stands at around 100 GWh.

According to a PAP news report, citing the news service of Business Insider Polska, the deal will likely take the form of a for-equity transaction, reportedly aimed at boosting the State Treasury’s stake in Azoty.

The acquisition would boost the State Treasury’s directly-held stake in Azoty to 42% from the current 33%, and the State Treasury’s overall stake in the company to above 50%, according to the report.

But the real goal of the acquisition is reportedly to weaken the position of Russian shareholder Viatcheslav Moshe Kantor in Azoty, according to the report. Kantor currently holds a 19.41% interest in Azoty via intermediary companies, according to Azoty’s website. Kantor is a large shareholder in Russian fertilizer and chemicals group Acron Group.

Azoty’s takeover of ZEW Niedzica would mean Kantor’s stake in Azoty would reduce to around 17% according to PAP, citing Business Insider Polska.

Romania’s Azomureş Reduces Operations Further Amid Energy Crisis

Ammonia, Ammonium Nitrate, Calcium Ammonium Nitrate, Eastern Europe, News, News Briefs, NPK, Urea

Romania’s biggest fertilizer producer, Azomureş SA, said on Sept. 14 it will reduce its operations further as soaring natural gas prices make production unsustainable.

The company, which suspended ammonia production on June 23 (GM June 24, p. 1) following a series of production halts earlier this year, said it plans to relocate or furlough 200 of its employees and reduce maintenance servicing company activities to its production facilities by “at least 30%” in the coming months. It said only essential staff will be retained for night and weekend shifts.

Nevertheless, Azomureş said its production facilities are ready to be restarted at 50% capacity, “when the economic realities are met.”

At the time of the June ammonia production suspension, the Romanian producer said it would continue to produce fertilizers at its Târgu Mureș site until the existing ammonia stock was depleted.

It only restarted production in early May (GM April 29, p. 32), after halting fertilizer production on Dec. 17 last year due to “the very high prices” for energy, natural gas, and electricity (GM Dec. 17, 2021; Dec. 10, 2021).

Azomureş, a subsidiary of Swiss Group Ameropa, has an annual fertilizer production under normal operating conditions of 1.6 million mt, with approximately 75% of the output destined for Romanian farms, according to the company. It produces granular and prilled AN, granular CAN, granular urea, and NPs, as well as NPKs.