All posts by mickeybarb@charter.net

Winfield United, AgVend Collaborate

News, News Briefs, Northern Plains, Texas

WinField United, Arden Hills, Minn., and AgVend, Austin, Texas, have announced a new collaboration that allows agricultural retailers and growers the ability to access WinField United’s proprietary digital tools, services, and marketing programs using AgVend’s digital enablement platform.

In the first phase, participating sales teams and growers will gain access to WinField United proprietary programs – including loyalty and incentive programs, financing options, customized agronomic prescription plans, risk mitigation warranties, and digital marketing campaigns – through the retailer’s AgVend-built digital enablement platform. Additional offerings will be made available in the future as the collaboration progresses.

Southern States Cooperatives Pursue Merger

Featured, News, Northeast, Southeast

Four Southern States Cooperative locations in Maryland, Virginia, and West Virginia have announced plans to merge into a new organization called Freedom Ag & Energy Cooperative.

Members of the businesses in Oakland, Md., Winchester, Va., Petersburg, W.Va., and Buckhannon, W.Va., voted on the unification this month after the Boards of Directors in June formally approved the merger. Results of the member vote will be announced in early August.

If approved, the combined business will take effect on Jan. 1, 2023, and will no longer be affiliated with Southern States. The businesses said in a press release that the merger will provide “additional flexibility to capitalize on competitive advantages” in the local and global agriculture markets. No jobs will be eliminated, the press release said, and overall employment is expected to increase as a result of the merger.

“The merger will allow the locations to take advantage of the synergies in their core businesses – petroleum products, agronomy, feed and farm supply, and retail – to strengthen their overall financial position while safeguarding members’ equity and patronage,” the businesses said.

Southern States is headquartered in Richmond, Va. The company in 2020 announced a transaction with Growmark Inc., Bloomington, Ill., to align the organizations operationally (GM Aug. 7, 2020). Since Sept. 1, 2020, Growmark has managed the wholesale agronomy and energy assets of Southern States, providing crop inputs, fuels, propane, and a variety of customer support and marketing services to Southern States and its member cooperatives.

Unigel to Build Green Hydrogen/Ammonia Plant

Brazil, Green Ammonia, Green Hydrogen, News, News Briefs

Brazil nitrogen and chemical producer Unigel, Sao Paulo, said on July 26 that it plans to invest US$120 million to produce green hydrogen and ammonia. The new plant will be located in Camaçari Industrial Complex in Bahia, and will have an initial production capacity of 10,000 mt/y of green hydrogen and 60,000 mt/y of green ammonia. Unigel expects the production to start in late 2023.

“Throughout our nearly 60-year history, we have always been attentive to technological innovations and have invested to meet industrial and agribusiness demands,” said Henri Slezynger, Unigel Board Chair and Founder. “With this project, Unigel takes the first step towards the decarbonization of several sectors, contributing substantially to combating climate change on the planet.”

Unigel said the plant will be the first industrial-scale green hydrogen production site in Brazil. At this moment, it said the integrated green hydrogen and ammonia plant is expected to be the largest in the world.

In the first phase of the project, Unigel will install three 20 MW standard electrolyzers from Thyssenkrupp Nucera, Dortmund, Germany, adding up to a total capacity of 60 MW. The company plans to quadruple its production of green hydrogen in the years following the inauguration by expanding the electrolyzer plant to a multi-hundred MW facility, which will produce approximately 40,000 mt/y of green hydrogen. The new factory is expected to employ 500.

The green products will be offered to customers who aim to decarbonize their production chains, including the steel industry, oil refining, and e-fuels. Unigel said green ammonia will also be used in the value chain of Unigel, as it is a raw material in the manufacturing of fertilizers and acrylics.

“Given the potential of Brazil in the generation of wind and solar energy, we believe that the country has a great opportunity to be a reference for the world in green hydrogen, a solution that brings versatility to transform renewable energy into raw materials and zero carbon fuels”, said Roberto Noronha Santos, Unigel CEO. Around three quarters of the energy used in electrolysis of the project comes from renewable sources.

Unigel currently has approximately 1 million mt/y of urea capacity from two plants it has leased from Petrobras (GM Jan. 29, 2021). It also has about 400,000 mt/y of ammonium sulfate capacity.

Kentucky Fertilizer Sets Up New Pelletized Operation

Correction, News, News Briefs, South Central

Kentucky Fertilizer LLC, a subsidiary of Caudill Seed Co., Louisville, has set up a new pelletized operation at its Winchester location. In addition to its complete line of fertilizers, pelletized lime and pelletized gypsum are being produced with enhanced fast-acting pelletized lime, expected to be available this fall.

Kentucky Fertilizer distributes its products to a network of customers throughout the Midwest and the Eastern U.S. Caudill Seed Co., a Kentucky LLC, founded in 1947, purchased the Winchester location, a former Agro Fertilizer plant in 2010.

The story that appeared in the Green Markets dated July 22 incorrectly had the parent-subsidiary relationship reversed.

Brazil Agency Approves Nutrien Deal

Brazil, News, News Briefs, Saskatchewan

Brazil’s antitrust regulator, the Administrative Council for Economic Defense (CADE), has approved Nutrien Ltd.’s plan to acquire Marca Agro Mercantil (GM July 1, p. 1) according to Bloomberg, citing the Official Gazette and the agency’s website.

Marca Agro Mercantil, an agricultural inputs retailer, has been operating in Minas Gerais in Brazil for 17 years in 67 municipalities, with seven stores in the regions of Triângulo, Alto Paranaíba, and Sudoeste Mineiro, and access to more than 1,700 customers.

Gazprom Cuts European Gas Flows; BASF to Curtail More NH3 Production

Europe, Featured, Germany, Natural Gas, News, Russia

Russian gas giant Gazprom PJSC on July 27 cut natural gas supplies via the key Nord Stream 1 pipeline connecting Russia with Europe via Germany to around 20% of the pipeline’s capacity.

European gas prices have soared on the further restricted flows through the pipeline.

Front-month (currently August) natural gas futures on the Dutch TTF hub, the European benchmark, were at €201.396 per megawatt-hour (MWh) at close on July 28, down from 204.95 per megawatt-hour (MWh) at 10.07 am (GMT) and having hit €228 per MWh on July 27. That compares to a July 26 close of €199.02 per MWh and €159.865 per MWh on July 22.

European Union (E.U.) countries had breathed a sigh of relief last week when gas flows through Nord Stream 1 were resumed on July 21 after it was closed for 10 days of planned maintenance (GM July 22, p. 1). Many had feared Russia would keep the pipeline closed.

Initial shipments were made at some 40% of capacity, according to a Bloomberg report, citing data from the pipeline operator.

The reduction of flows to 20% of capacity comes after Gazprom took out of service one more turbine at the Russian end of the pipeline for maintenance. Hitherto, only two out of six turbines at the Russian end of the line were operating as Western sanctions have limited maintenance options for the equipment, according to the gas major.

One additional turbine is still in Germany amid paperwork delays, Russian newspaper Kommersant reported, as cited by Bloomberg. The turbine was first stranded in Canada.

Flows of natural gas through the Nord Stream 1 pipeline to Europe will depend on how quickly the pipeline equipment is repaired and returned to Gazprom, according to Kremlin spokesperson Dmitry Peskov, speaking to reporters this week, as cited by a Bloomberg report.

According to Peskov, Russia is “not interested” in a complete cut-off of its gas deliveries to Europe.

But – as cited by Bloomberg – he said if Europe continues its course of “absolutely recklessly” imposing sanctions and restrictions that are hitting Russia, “the situation may change.”

The CEO of German chemicals giant BASF SE, Martin Brudermüller, on July 27 said the company will reduce production at ammonia plants and other facilities that need “large volumes” of natural gas to operate. The company did not provide any specifics on the planned reductions and plant utilization rates.

In Europe, BASF has ammonia production capacity of 910,000 mt/y at Ludwigshafen, Germany, and 610,000 mt/y at Antwerp, Belgium, according to the Green Markets database.

Brudermüller said at a media call presenting second-quarter earnings that BASF will buy some ammonia from other suppliers to meet orders, but fertilizer prices are expected to rise in 2023.

Early this month, BASF was reported to have reduced ammonia production rates at Ludwigshafen and Antwerp. But the company, as cited by a Dow Jones report, said all internal and external customer needs were currently being met (GM July 1, p. 1).

BASF’s decision to cut its ammonia production will enable the company to offer surplus gas to an auction under Germany’s emergency gas supply plan, according to a Bloomberg report, citing unnamed sources familiar with the matter. The emergency supply plan is in case Russian gas deliveries to Europe come to a halt.

Unlike many other European countries, Germany has no liquefied natural gas (LNG) import terminals to replace Russian pipeline gas.

Germany’s largest ammonia and urea producer, SKW Piesteritz GmbH, is in the process of resuming full production after a planned turnaround on one of its two ammonia lines, but said the future capacity utilization rate “was extremely difficult to predict,” according to a Reuters report.

The company had brought forward the turnaround, but it is unclear if this was due to the recent temporary shutdown of Nord Stream 1 and/or due to other factors (GM July 8, p. 1).

SKW has two ammonia plants, each with capacity to produce 0.54 million mt/y, according to the Green Markets Capacity Database.

Yara International ASA, owner of Germany’s third-largest ammonia production plant at Brunsbüttel in the north of the country, said it has curtailed several of its production plants across Europe as of July 19, amounting to an annual capacity of 1.3 million mt of ammonia and 1.7 million mt of finished fertilizer, and warned that more cuts may come.

The curtailments in Yara’s ammonia and finished fertilizer production equate to around 27% and 18%, respectively, of the company’s European capacity. The company is understood to have about 0.8 million mt/y of ammonia production capacity at Brunsbüttel.

Amid deteriorating Russian gas flows, E.U. Member States on July 26 reached a deal on a voluntary reduction of their natural gas use by 15% through next winter – coming just a week after the European Commission proposed the regulation amid fears of a complete cut-off of Russian supplies.

Member States have agreed to reduce their gas demand by 15% compared to their average consumption in the past five year, between Aug. 1, 2022, and March 31, 2023, “with measures of their own choice,” according to a July 26 media statement by the European Council. The new rules should enter into effect in the next coming days.

The Commission has warned that targets would be “mandatory” in the event of severe disruption to supplies.

The European Council has specified some exemptions and possibilities to request a derogation from the mandatory reduction target in order to reflect the particular situations of Member States and ensure that the gas reductions are effective in increasing security of supply in the E.U.

ICL 2Q Lifted by Specialties, Commodity Upside; FY22 Guidance Raised

Earnings, Israel, Phosphate, Polyhalite, Potash, Specialty

ICL Group Ltd., Tel Aviv, reported a net income attributable to shareholders of the company of $563 million ($0.44 per share) for the second quarter ended June 30 on revenue of $2.88 billion, up from the year earlier $140 million ($0.11 per share) and $1.62 billion, respectively.

The diluted earnings per share for the quarter missed analysts’ expectations by $1.01, while revenue beat expectations by $60 million.

Second-quarter adjusted EBITDA came in 249% up on the same year-ago quarter, to $1.26 billion versus $360 million, while revenue increased 78%.

ICL President and CEO Raviv Zoller attributed the strong second-quarter performance to the company’s continued focus on long-term specialties solutions, with additional “significant upside” from commodity prices. The performance was supported by increased demand and higher prices in most markets “and was achieved even as raw materials costs remained inflated and as global supply chain challenges continue,” he said.

Due to very strong results in the first half of 2022, ICL is raising its expectations for full-year adjusted EBITDA to a range of $3.8-$4 billion, up from previous guidance of $3.5-$3.75 billion (GM May 13, p. 31).

Between $1.5-$1.6 billion of 2022 EBITDA is expected to come from the company’s specialties focused businesses, up from previous expectations calling for contribution of $1.3-$1.4 billion.

ICL’s Potash division achieved a significant increase in second-quarter operating income to $576 million, up from the year-ago $42 million, while sales increased 150%, to $951 million (including sales to internal customers) from $380 million the previous year.

Potash segment EBITDA for the quarter surged to $616 million, up year-over-year from $80 million.

The company highlighted that the average potash realized price per ton for the quarter was $750, an increase of 167%, or $469 year-over year, from $281 million, and up $149 from the first quarter of this year, as prices continued to increase amid continued disruptions in global fertilizer availability.

However, ICL expects its average potash realized price in the third quarter to moderate to around $700 per mt due to the recent trend of price convergence in the global market and also as the company is scheduled to increase shipments to India and China, Zoller told participants at a company earnings call on July 27.

Potash production increased 18% year-over-year in the second quarter, to 1.211 million mt from 1.022 million mt, while first-half output was up 6%, to 2.304 million mt versus the previous year’s 2.174 million mt.

ICL saw increased output at its Dead Sea operation at Sdom, as the site achieved both an all-time quarterly production level and an all-time semi-annual production level, as the site continued to benefit from operational improvements and efficiencies.

The company also reported an all-time quarterly granular production record at the Cabanasses mine in Spain as production improvements advanced, and it expects additional progress in the second half of the year.

Second-quarter potash sales (including internal sales) were essentially flat year-over-year at 1.147 million mt versus the year-ago 1.148 million mt, while six-month sales increased 3% to 2.297 million mt on the prior year’s 2.223 million mt.

The Phosphates Solutions division saw second-quarter operating income increase 248% to $268 million from the prior year $77 million, while sales (including internal sales) were up 57%%, to $915 million from $582 million. The division’s second-quarter EBITDA rose 137% to $315 million in the quarter from the year-ago $133 million.

Phosphates Specialties posted a 162% increase in EDITDA to $131 million on a 50% increase in sales to $493 million. Phosphate Commodities saw a 122% rise in EBITDA to $184 million, while sales were up 67% to $422 million.

ICL reported its YPH joint venture in China realized higher prices for both specialty products and commodity fertilizers, combined with increased production efficiency.

The company noted the continuing upward trend in commodity market prices, with raw material prices and production costs also continuing to trend higher.

The Innovative Ag Solutions (IAS) division posted a 571% year-over-year rise in operating income in the second quarter to $141 million, and a 110% rise in sales to $700 million (including sales to internal customers). The segment’s EBITDA was up 356%, to $155 million.

ICL highlighted record sales in specialty fertilizers during the quarter, driven by higher prices across all regions, which it said helped offset raw material price inflation.

“Our Brazil expansion strategy delivered both synergies and robust results ahead of expectations even during this traditionally slower season,” Zoller told company earnings call participants.

He said this Brazil business contributed $177 million in sales in the quarter, up versus the prior year, highlighting that overall demand remains elevated in Brazil, and the company expects continuation of this trend as the key planting season in the Southern Hemisphere gets underway.

ICL separately highlighted for the second quarter that organic polysulfate was “a big winner both in terms and price and market penetration.”

The company said its fertilizer plus products are the preferred product for many farmers due to their additional nutrients and organic composition.

ICL signed a long-term organic polysulfate supply agreement in June with Indian Potash Ltd. through 2026 for an aggregate amount of 1 million mt, inked in June (GM June 17, p. 29). Volumes will increase each year of the agreement, which has a renewal option. The polysulfate is expected to help boost the government of India’s organic agriculture program.

In addition to growth in India, Europe, and China, polysulfate gained new business with expansion into Indonesia.

ICL produces polyhalite – polysulfate is the marketed form – at Boulby in northeast England. The company reported the site remains on target to achieve its 1 million mt target in 2022.

Since the beginning of 2022, ICL Boulby and other European business components, at the start of 2022 come within the company’s IAS segment, having been re-allocated from ICL’s Potash and Phosphate Solutions business segments, respectively, as part of ICL’s consolidation of its specialty agriculture businesses into one segment under the IAS division (GM May 13, p. 31).

In connection with the second-quarter results, ICL’s Board of Directors declared a dividend of 29.18 cents per share, or approximately $375 million, up from 5.26 cents per share, or approximately $68 million, in the second quarter of 2021 The dividend will be payable on Sept. 14, 2022, to shareholders of record as of August 31, 2022.

For the first half of 2022, ICL reported a net income attributable to shareholders of the company of $1.195 billion ($0.93 per share) on revenue of $5.405 billion, up from the year earlier $275 million ($0.22 per share) and $3.127 billion, respectively.

Six-month adjusted EBITDA came in 241% up on first-half 2021 to $2.26 billion, versus the year-ago’s $662 million, while revenue increased 73%.

ICL Settles Tax Dispute

Israel, News, News Briefs

ICL Group Ltd., Tel Aviv, has reached an understanding with the Israeli Tax Authority and settled the tax dispute regarding the surplus profit levy on natural resources, the company said on July 27.

“By settling, we have finalized all disputes regarding previous years and gained certainty regarding the future,” ICL President and CEO Raviv Zoller told participants at a company earnings call.

The settlement agreement provides final assessments for the tax years 2016 to 2020, as well as outlines understandings for the calculation of the levy for the years from 2021 and onwards.

As a result of the settlement agreement, in the second quarter of 2022 ICL recognized tax expenses for prior years in the amount of $188 million.

Russian N&P Fertilizer Production Up, Potash Off

News, News Briefs, Nitrogen, Phosphate, Potash

Russian fertilizer producers produced a total of 12.3 million mt of fertilizers in the first half of 2022, according to Interfax, citing a report by the Russian Federal State Statistics Service (Rosstat), some 7.6% less year-over-year.

Six-month potash production fell by 23.3%, to 4.1 million mt. But six-month production of phosphate and nitrogen fertilizers increased by 3.3% and 2.9%, to 2.2 million mt and 6 million mt, respectively.

Yara Clean Ammonia and Pilbara Ports Authority to Assess NH3 as Shipping Fuel

Ammonia, Australia, News, News Briefs, Norway

Yara Clean Ammonia and Pilbara Ports Authority (PPA) have signed a Collaboration Agreement to jointly facilitate the uptake of clean ammonia as a marine fuel in the Pilbara region in Western Australia.

The two parties will jointly assess the potential ammonia demand and required bunker infrastructure, leveraging off Yara’s existing Pilbara ammonia production facility and its clean ammonia potential in the region, according to Yara on July 28. The agreement will also ensure safe ammonia bunker operations within PPA ports through collaborative safety analysis and the creation of transparent ammonia bunkering guidelines.

The joint assessment is planned to take approximately one year.

Both Yara and PPA believe that a clear understanding of the required bunker infrastructure and safe ammonia bunker guidelines will accelerate the effective uptake of clean ammonia as a fuel, and will be a major step towards making shipping fuel fossil-fuel free.

PPA is the world’s largest bulk export authority, encompassing the ports of Ashburton, Dampier, Port Hedland, and Varanus Island. Yara Clean Ammonia operates the largest global ammonia network with 12 ships, and has access to 18 ammonia terminals and multiple ammonia production and consumption sites globally, through Yara International.