All posts by mickeybarb@charter.net

Vancouver Port Still Playing Catch Up; State of Emergency Extended to Mid-December

Featured, News, Vancouver

Trade flows at Canada’s biggest port could return to normal in the “coming days and probably weeks” after flooding temporarily closed rail tracks and roads, Port of Vancouver CEO Robin Silvester told Bloomberg on Dec. 1. “We already have trains moving on one of two lines to the port, and both railways are moving across that line, and a lot of work is going on to restoring service in the other line.”

Reduced cargo movement at the port is having ripple effects across Canada as C$700 million (US$548 million) worth of daily cargo normally moves through the port. As previously reported, potash exporter Canpotex Ltd. was looking to route product through Oregon and New Brunswick (GM Nov. 19, p. 1).

“We are seeing ships backing up at anchor waiting to get cargo to the port,” said Silvester. “We’re seeing delays in the container supply chain, but there’s a lot of work going on throughout the system, and we’re starting to see cargo resumption.”

A 40-acre site is being prepared for temporary handling and storage of empty containers to provide additional container storage capacity to ease supply chain constraints and bottlenecks.

Heavy rains last month cut Vancouver off from the rest of British Columbia and idled both major rail lines (GM Nov. 26, p. 1; Nov. 19, p. 1).

A new wave of heavy rain slowed things down earlier this week, so much so that the province announced it was extending its state of emergency and gas rationing through mid-December.

As of Monday, Nov. 29, the two main railways that transport cargo to and from Vancouver again temporarily closed their tracks due to rainfall concerns. CP Rail’s mainline between Kamloops and Vancouver closed for inspections and repairs to stabilize sites impacted by rainfall, while CN Rail stopped operations to also enable inspections.

“After moving seven trains during the weekend, CN took the decision to proactively close its network as the large amounts of precipitation into British Columbia were causing increased debris, washout, and landslide activity,” said CN. The company has diverted some rail traffic north to Port of Prince Rupert.

ARA Conference Draws Big Crowd to Texas

News, News Briefs, U.S.

More than 600 industry representatives gathered in San Antonio, Texas, on Nov. 30-Dec. 2 for the Agricultural Retailers Association’s (ARA) 2021 Conference and Expo. ARA President and CEO Daren Coppock told attendees that the registration total of 609 was “well above initial expectations,” given that COVID travel restrictions continue and the conference was the first live event since ARA’s 2019 expo in New Orleans, La.

Multiple speakers over the three-day conference expressed relief that a face-to-face event was once again possible after the shutdowns during 2020 and early 2021. For many attendees, the lingering effects of the pandemic – including supply chain disruptions, critical labor shortages, and skyrocketing input prices – were key topics of conversation.

Each of these issues was apparent as Coppock outlined ARA’s policy agenda, which includes efforts to address driver shortages through hours of service (HOS) and CDL reforms; support for the bipartisan infrastructure bill; opposition to regulatory and government overreach; and opposition to federal vaccine mandates. “The worse thing we can do is make it harder to hire people,” he said.

While acknowledging that fair trade is a “legitimate concern for producers” and that fertilizer manufacturers are among ARA’s members, Coppock said ARA is “vocally opposed” to tariffs on farm inputs. “Especially in this current price environment, we shouldn’t do anything that increases pressure on input prices,” he said,

Coppock said ARA opposes President Biden’s Build Back Better bill, which he referred to as a “gargantuan piece of legislation” that cannot be paid for, despite the “substantial tax increases that will impact your business.”

He also referenced several recent EPA actions under the new administration, including efforts to return the contentious Waters of the U.S. (WOTUS) rule to the standard that existed before the Obama administration. He addressed as well the regulatory crackdown on organophosphates, such as the popular insecticide chlorpyrifos, which he described as a circumvention of FIFRA. “Activists will use this success to go after other pesticides,” he warned.

Supply chain disruptions and high input prices were also brought up at a Dec. 2 panel discussion with Matt Carstens, President and CEO of Landus Cooperative, and Clay Houchin, CEO of Buttonwillow Warehouse. Houchin said he was surprised that it has taken this long “for the supply chain to fall apart.”

Carstens warned that “something is going to break” in 2022 due to high input costs that have rapidly outpaced crop prices. Houchin agreed, and stressed that more transparency is needed in the supply chain. “Growers are going to pull back, and it feels like we are coming to a cliff,” he said.

The ARA dinner and auction on Dec. 1 raised $66,545 for the organization’s ARAPAC political action committee.

Pursell, Huntsman Issued Patent

News, News Briefs, South Central, Specialty

Pursell Agri-Tech LLC, Sylacauga, Ala., and Huntsman International LLC, The Woodlands, Texas, have announced that they have been issued U.S. Patent No. 11,180,429 by the U.S. Patent and Trademark Office. This patent relates to the PurActive® polyurethane-based coating technology used in the production of controlled-release fertilizer (CRF) for a broad range of markets, including turf and ornamental, specialty agriculture, row crop agriculture, and consumer home and garden.

“The PurActive® coating technology leverages Huntsman’s advanced Rimline® polyurethane system and optimized processes to produce controlled-release fertilizer at faster batch times, lower processing temperatures, and with a much thinner coating weight,” said Jan Buberl, Vice President – Huntsman Polyurethanes Americas. “These unique advantages translate into lower energy usage and a reduced carbon footprint.”

“We are committed to introducing CRF technology that helps reduce greenhouse gas emissions and improve water quality,” said Taylor Pursell, Pursell Chairman. “This patented coating technology has proven its ability to do this while allowing us to offer customers a broader portfolio of coated substrates and numerous product features previously unavailable.”

Pursell said university trials demonstrated that the PurActive® technology also protected the core fertilizer substrate and minimized nutrient loss, greatly reducing volatilization and leaching. The companies also said since the coating technology is thinner, it allows for higher nutrient content per ton and the lower processing temperature promotes the survivability of such health-boosting additives as micronutrients, microbials and biostimulants.

“Ongoing investment in research and development is the backbone of our company and what we believe differentiates us, and our partner Huntsman, from the competition,” said Nick Adamchak, Pursell CEO. “This patent further solidifies our position and enhances our ability to introduce CRF technology that improves nutrient delivery while minimizing impact to the environment.”

Pursell and Huntsman were recently recognized by the Center for the Polyurethanes Industry (CPI) as the 2021 recipient of its Polyurethane Innovation Award (GM Oct. 15, p. 30).

Bunge to Buy Stake in Brazil Retailer Pantanal

Brazil, News, News Briefs

Bunge Ltd. has signed a Memorandum of Understanding to buy a minority stake in Brazilian agricultural retailer Pantanal Agricola, according to Bloomberg, citing a company statement. The transaction will allow Bunge to intensify barter trading in the Center-West region, where Pantanal operates. Bunge also plans to invest in Pantanal’s grain storage capacity and boost its potential growth.

Pantanal Agricola, in business since 2001, operates in three states – Mato Grosso, Mato Grosso do Sul, and Goias – and 32 cities, selling fertilizer, seed, and crop protection products, according to its website. Product partners include Bayer, Corteva AgriScience, FMC, Nufarm, Helm, and STK Bio-Ag Technologies.

Terms of the deal were not disclosed. The deal still needs approval from Brazil’s antitrust regulator, the Administrative Council for Economic Defense (CADE).

Hidrovias, Rumo Partner to Serve Fertilizer Customers at Port of Santos

Brazil, News, News Briefs

Hidrovias do Brasil SA, Sao Paulo, which operates a terminal at the Port of Santos via HB Santos, said on Dec. 1 it has signed a Memorandum of Understanding (MOU) with Rumo SA, which provides rail cargo transport services, to integrate logistics at the facility to serve fertilizer customers.

The MOU establishes an annual operation volume of 500,000 mt of fertilizer and is to be operated on a take-or-pay format. The MOU is valid for 180 days or until a definitive contract is signed, whichever occurs first. Implementation will depend on regulatory authorization and licenses.

Acron Group Updates on Projects

News, News Briefs, Potash, Russia

Acron Group, Moscow, this week reported that “the active phase” of the Talitsky potash project in Russia’s Perm region is underway, with the group purchasing major equipment and conducting construction and installation operations for the project’s surface and underground facilities and infrastructure.

The sinking of the cage shaft was completed in April 2020, and the sinking of the skip shaft was completed in late November last year (GM Dec. 18, 2020).

The Russian fertilizer group said in August it was accelerating construction of the mine, and anticipated the first batch of potash could be produced in 2025 (GM Aug. 20, p. 1). According to a group investor presentation last month, the launch of the Talitsky mine remains on track for 2025.

In the presentation, the group put the remaining capex for the project with an initial design capacity of 2 million mt/y of potassium chloride at $1.3 billion, with a further $0.3 billion required for expansion to 2.6 million mt.

The group currently anticipates using at least 600,000 mt/y of the potash output from the project for in-house consumption, including for NPK fertilizer production.

The Acron Group owns a 50 percent plus one share stake in the Acron subsidiary –Verknekamsk Potash Co. (VPC) – developing Talitsky, with Russian banks holding the remaining interests.

In addition to advancing the Talitsky potash project, Popov said the group’s chemical division has an investment program through 2023 that includes “highly effective” brownfield projects.

He added the group already is exploring both brownfield and greenfield projects for the next investment cycle based on their anticipated impact on the group’s ESG agenda and carbon footprint.

Most of the current projects underway listed in the group’s presentation have been announced previously by the group (GM Aug. 13, p. 1). However, it now is adding a second urea granulation unit at the Acron Veliky Novgorod production site in northwest Russia as part of the upgrade of urea 1-4 units. It commissioned the first urea granulation unit in May 2020, also with a facility of 700,000 mt/y (GM May 22, 2020). Hitherto, the group had only produced urea that was prilled or rotoform.

According to its own calculations, The Acron Group became the largest urea producer in Europe, with total urea production capacity of 1.975 million mt/y, following the completion of its “Urea-6+” upgrade in August.

The group announced the launch of the CN project in March this year (GM March 19, p. 1), and it will be its first CN unit. Production is expected to start in 2022 and the group has said it plans to produce different calcium nitrate brands for both agricultural and industrial needs (GM May 7, p. 44).

Current Main Expansion Projects

  Timeline Output increase (‘000 mt/y) Capex $m
Site: Acron, Veliky Novgorod      
Construction of a CN unit 2020-2022 +100 22
Increase of Ammonia-3 unit capacity 2020-2023 +200 95
Increase of Ammonia-2 unit capacity 2021-2023 +175 95
Increase of capacity for urea units 1 to 4 and construction of a urea granulation unit 2021-2024 Urea: +390 Granulation: +700 92
       
Site: Dorogobuzh, Smolensk region      
Construction of nitric acid unit and increase of capacity of AN units 2020-2021 AN: +180  

In its nine-month earnings statement on Nov. 29, Acron Group Chairman Alexander Popov said the group is taking advantage of the lower debt burden to gradually accelerate capital expenditures (see Earnings story).

Borealis Partners With EDF Subsidiary for Low-Carbon Ammonia Project

Ammonia, Europe, News, News Briefs

Polyolefins and fertilizers major Borealis AG, Vienna, has inked a Memorandum of Understanding with Hynamics, a subsidiary of Paris-based EDF group specializing in decarbonized hydrogen, to explore the development of a project for low-carbon ammonia production at Borealis’ fertilizer production site in Ottmarsheim, near Mulhouse, France.

Borealis said the project could deliver the installation of a 30 megawatt (MW) electrolysis station for the production of 4,300 mt/y of low-carbon hydrogen to the Ottmarsheim site for the production of 24,000 mt/y of low-carbon ammonia by 2025-2026.

The ammonia produced at the site is mainly used for the production of fertilizers, but other uses for low-carbon ammonia will be studied, including for industry and shipping, the company said in a Nov. 30 statement announcing the partnership.

The first phase of the project, for which the Borealis and Hynamics teams have already been mobilized, consists of consolidating technical and economic approaches while requesting French and European funding.

K+S Says No Adjustments Needed to Valuations After DPR Reports Final Findings

Earnings, Germany, News

K+S Group, Kassel (K+S), said on Nov. 25 it believes the final examination findings by the German Financial Reporting Enforcement Panel (FREP-DPR) from the examination of the company’s full-year 2019 and first-half 2020 financial statements will not result in valuation adjustments.

According to K+S, the final findings do not result in any adjustment requirements for the valuations of the Potash and Magnesium Products cash-generating unit (CGU Potash) in the financial statements as of Dec. 31, 2019, and the subsequent statement of 2020.

In the preliminary findings regarding the consolidated financial statements as of Dec. 31, 2019, issued by DPR in November, the financial watchdog said the value in use of the CGU Potash “had not been reliably determined” and “was significantly overstated,” and “therefore that recoverability had not been demonstrated” (GM Nov. 12, p. 30). These preliminary findings are no longer included in the final findings issued by the DPR on Nov. 25, K+S said.

“We consider this to be confirmation that a valuation adjustment was not required as of Dec. 31, 2019. This was also made clear to the DPR in our extensive written and verbal statements,” said K+S CFO Thorsten Boeckers.

The DPR’s final findings on the financial statements as of Dec. 31, 2019, are now limited to the fact that material assumptions, changes in assumptions, discretionary decisions, and estimation uncertainties in connection with the impairment test of the CGU Potash had not been adequately reported, he said. The company noted this is a breach of the German Securities Trading Act.

Regarding the abbreviated consolidated financial statements as of June 30, 2020, the DPR said K+S did not perform an impairment test on the CGU Potash despite indications of impairment, and that significant events and their effects on the financial position had not been presented with sufficient clarity in the interim management report. That is also a breach of financial disclosure rules.

The company was requested by the DPR to indicate whether it agrees or disagrees with the findings by Dec. 9. On Dec. 2, K+S reported it notified the DPR that it agrees with the findings.

Once the DPR has forwarded the examination findings and K+S has given its consent to the German Federal Financial Supervisory Authority (BaFin), the proceedings at the DPR are terminated.

BaFin had requested this past February for the K+S financial statements to be examined by the DPR, citing the reason for the probe as assets reported in the financial statements – in particular non-current assets – may be overstated (GM Feb. 19, p. 35).

K+S Secures Regulatory Clearance for REKS JV; Ups FY2021 EBITDA Guidance

Earnings, Germany, News

K+S Group, Kassel, said it has secured final clearance from the German Federal Cartel Office, Bunkeskartellamt, for the merger of the new REKS waste management joint venture with Germany’s Remex GmbH. The closing of the transaction is now expected before the end of 2021.

As a result of the contribution of the K+S stakes to REKS, K+S will generate a one-off gain of about €200 million in the fourth quarter. At the same time, a total cash inflow of about €90 million before taxes will be generated, the company said in a Dec. 1 statement.

Therefore, K+S now expects operating earnings EBITDA of the K+S Group for full-year 2021 of about €830 million (previous guidance: about €630 million excluding the REKS transaction), and a slightly positive free cash flow. Full-year 2020 EBITDA was €267 million.

The company in late October warned that the completion of the REKS transaction likely would be delayed into 2022 after the E.U. Commission referred the antitrust clearance procedure to the German Federal Cartel Office (GM Oct. 29, p. 28).

The regulatory clearance came after Remex – owned by Germany’s Rethmann Group – sold its share in competitor Minex GmbH, and the two jv parties agreed to further contractual arrangements, according to a Bloomberg report, citing a statement on Bunkeskartellamt’s website.

The further contractual arrangements include that the Stassfurt waste incineration plant belonging to the Rethmann Group will in future channel its waste flows through Minex and not the REKS jv.

In addition, K+S is required to continue to offer intermediaries of hazardous fly ashes disposal capacities in its sites for 10 years so distributors still will be able to deliver waste to these sites in the future. Finally, for a period of 15 years, K+S is required to accept waste from waste producers in the event of short-term unscheduled disruptions to alternative disposal channels – i.e., the so-called “redundancy commitment.”

K+S and Remex GmbH reached an agreement in December 2020 to partner up to bundle their respective waste management activities in a new jv, REKS GmbH & Co. KG, in which both companies would be equal partners, each with 50 percent participation (GM Dec. 31, 2020).

K+S said the jv is aimed “to open up the attractive and rapidly growing European market for the recovery and disposal to waste as well as the realization of sustainable waste management solutions.”

ICL Boulby Secures Approval for Another 25 Years

England, News, News Briefs, Polyhalite, Specialty

ICL Boulby said it has secured approval for its application for the continuation of polyhalite and salt production at its Boulby mining operation in northeast England for a further 25 years from 2023 when the current planning permission expires.

As part of the approval by the North York Moors Park Authority Planning Committee, the company will undertake a program to improve the visual aspects of the mine, including the removal of some building structures, ICL Boulby said in a Dec. 2 statement.

In addition, in line with the company’s responsibilities to the community, ICL Boulby will support a range of measures, including almost £9 million (approximately $12 million at current exchange rates) for landscape enhancements and a contribution of almost £5 million towards tourism activities.

ICL Boulby began lobbying for the extension of mining at Boulby in 2017 (GM March 31, 2017). Production of potash ceased at Boulby at the end of the second quarter of 2018 as part of the planned full transition to polyhalite production, in addition to continuing to produce salt at the site.