All posts by mickeybarb@charter.net

Univar Starts Construction on New B.C. Facility

News, News Briefs, Specialty

Univar Solutions Inc., Downers Grove, Ill., announced on Aug. 2 that it has begun construction on a new custom-designed facility in Abbotsford, B.C. The SAP-ready facility will have larger chemical and ingredient storage, as well as rail capacity and specially-designed blending rooms for solvents, corrosives, and oxidizers.

The new site will also feature a whole-site tank telemetry system for real-time product inventory, and a state-of-the-art containment strategy to help minimize impacts to the environment while increasing safety. Univar expects the facility to open during the first half of 2023, which the company said aligns with its long-term sustainability commitment to achieve net-zero emissions by 2050.

“Central to our Growing Together strategy is our customer, and the new Abbotsford facility will improve our ability to quickly and safely deliver products when and where they are needed with minimal carbon footprint, making us easier to do business with and helping us fulfill our purpose to keep communities healthy, fed, clean, and safe,” said Chris Halberg, Vice President of Local Chemical Distribution for Univar Solutions in Canada.

“We’re excited to build-on our leading position in the British Columbia market with more growth opportunities for our suppliers to meet local customer needs.” Halberg added. “In addition to the many customer, supplier, and sustainability benefits, employees will appreciate the efficient design and digital investments at the Abbotsford facility that will make it easier for them to do their jobs with safety top of mind at every step.”

PhosAgro Posts Strong 2Q/IH Earnings; Nears Decision on Ammonia, Urea Complex

Ammonia, Earnings, News, Phosphate, Russia, Urea

PhosAgro, Moscow, reported a 45 percent rise in second-quarter IFRS net profit, to RUB30.31 billion (approximately $411 million at current exchange rates) on revenue of RUB88.68 billion ($1.2 billion), up from the year-ago RUB20.88 billion and $59.94 billion, respectively.

Net profit adjusted for foreign exchange gain/loss more than trebled, totaling RUB24.1 billion ($325 million), up from the previous year’s RUB5.65 billion. EBITDA doubled to RUB38.79 billion ($523 million) from the year-ago RUB19.13 billion.

The group cited upgrades to production assets, improved efficiency at its main production lines, and an increase in self-sufficiency of key feedstocks, notably sulfuric acid, as driving an EBITDA margin increase for the quarter, to 43.7 percent versus 31.9 percent a year ago.

“In the context of a favorable global market environment for agricultural products and fertilizers, this enabled us to increase profitability considerably,” said PhosAgro CEO Andrey Guryev.

Second-quarter revenue increased by 48 percent, with the group citing the rise in global prices for phosphate- and nitrogen-based fertilizers amid the depreciation of the rouble against the U.S. dollar. The group’s nitrogen-based fertilizers sales volumes also increased by 3 percent in the quarter versus a year-ago, reaching 623,300 mt (GM Aug. 6, p. 32).

However, phosphate fertilizer sales volumes fell 7 percent, to 1.67 million mt. The group blamed a delay in the start of seasonal demand in India, and said this has had postponed some sales to the third quarter.

PhosAgro’s Phosphate fertilizers segment posted a second-quarter EBITDA of RUB29.7 billion ($400 million), which the group said was “a nearly two-fold increase” year-over-year on the back of higher profits for all key products. The Nitrogen-based fertilizer business posted EBITDA of RUB9.1 billion ($122 million) for the second quarter, “twice the result for 2Q 2020.”

For the first half of 2021, PhosAgro saw a significant boost in IFRS net profit, to RUB48.65 billion, up from the year ago RUB5.29 billion. Net profit adjusted for foreign exchange gain/loss doubled to RUB45.34 billion ($610 million) versus the year-earlier RUB22.24 billion.

Six-month EBITDA increased by 83 percent to RUB73.09 billion ($984 million), up from RUB39.86 billion, while revenue grew by 42 percent to RUB176.3 billion ($2.4 billion), up from the year-ago RUB124 billion.

PhosAgro cited the revenue growth was largely as a result of implementation of the group’s long-term development strategy, which has enabled the launch of new production capacities and improved the efficiency of existing facilities. The rise, it said, was also driven by an improvement in the group’s sales structure in favor of high-margin fertilizers at a time of higher average sales prices in global markets.

In terms of outlook, the group believes the expected seasonal activity in the main fertilizer markets in Brazil and India in the third quarter, coupled with the projected decrease in exports from China in order to supply its domestic market, will help support prices.

As of June 30, 2021, PhosAgro’s net debt had decreased by RUB30.5 billion since the end of 2020, and amounted to RUB126.3 billion ($1.7 billion). The net debt/EBITDA ratio had dropped to 1.07x as at the end of the second quarter of 2021.

The group’s Board has recommended that an extraordinary general meeting of shareholders be held on Sept.13 for shareholders to approve the payment of dividends in the amount of RUB20.2 billion, or RUB 156 per share (RUB52 per global depositary receipt) from retained net profit as of June 30, 2021.

PhosAgro said it was nearing a decision on the construction of new ammonia and urea plants, which forms part of its development strategy to 2025. The group in June confirmed that it was studying the construction of a complex for the production of ammonia and urea and is considering two sites for the project – either at Cherepovets, some 600 km north of Moscow, or at Volkhov in Russia’s Leningrad region (GM June 4, p. 1).

The group plans to provide investors with an update on the project decision as part of its revised strategy to 2025, with an announcement later this year or in early 2022 after the strategy has been reviewed and approved by the group’s Board of Directors.

PhosAgro first of all wants to improve its self-sufficiency in ammonia, but is also thinking about other raw materials, such as sulfuric acid and ammonium sulfate, and said it is adjusting its development strategy through to 2025 to incorporate these ambitions.

Ma’aden 2Q/1H Swings to Plus Column, Ammonia-3 on Track

Ammonia, Earnings, News, Saudi Arabia

Saudi Arabian Mining Co. (Ma’aden), Riyadh, swung to the positive column for the second quarter ending June 30, 2021, reporting a net profit after Zakat and tax of SAR1.104 billion (approximately $294 million at current exchange rates), against a net loss of SAR434.15 million a year ago, the company reported in a statement to the Saudi bourse. Revenue rose by 52 percent to SAR6.101 billion, up from SAR4.016 billion.

The company cited higher average realized price of all products except industrial minerals, despite a decrease in the sales volumes of ammonia, alumina, and gold. The company also saw an increase in net profit attributable to Ma’aden’s share of joint ventures and an increase in other income.

For the half year, Ma’aden posted a net profit after Zakat and tax of SAR1.865 billion, against a loss of SAR787.4 million a year ago, according to Saudi financial news portal, Argaam, citing a phone interview with Ma’aden’s CEO Abdulaziz Al Harbi.

Al Harbi expects demand for fertilizers to remain strong and production as likely to continue at the same high levels.

According to the Argaam report, Ma’aden’s new 1.1 million mt/y ammonia at Ras Al-Khair Industrial City on Saudi Arabia’s East Coast remains on track for completion in the fourth quarter of 2021, with operations to begin in the first quarter of 2022  (GM June 18, p. 1).

The “Ammonia-3” plant is the first unit under construction as part of Ma’aden’s ambitious plans for a third large-scale phosphate complex, “Phosphate 3,” which, upon completion, will add a further 3 million mt/y of phosphate fertilizer production capacity to Ma’aden’s portfolio.

However, ammonia from Ammonia-3 looks likely to be sold initially on the market. In February, local media, citing Ma’aden, reported output from the new plant would add 1.1 million mt to the Saudi producer’s sales (GM Feb. 12, p. 37).

Acron Becomes Largest Urea Producer in Europe with Urea-6+ Project on Stream

Featured, News, Russia, Urea

Acron Group, Moscow, said on Aug. 11 it had completed the overhaul of its Urea-6 unit at its Veliky Novgorod site in northwest Russia. The so-named “Urea-6+” upgrade has increased the unit’s capacity to 730,000 mt/y from 210,000 mt/y previously (GM April 23, p. 30).

The completion of the project has taken the group’s total urea production capacity to 1.975 million mt/y, making Acron the largest urea producer in Europe, the Russian group said.

Early last month, upgrade work began on the Urea 1 to 4 units at Veliky Novgorod , which is scheduled for completion in 2024 (GM July 9, p. 1). The completion of the work will add another 390,000 mt/y of urea production capacity.

Acron in May 2020 added granular urea capability to its production portfolio, commissioning a new 700,000 mt/y urea granulation unit at the Veliky Novgorod site (GM May 22, 2020). Hitherto, the group had only produced urea that was prilled or rotoform.

The Russian group is also increasing its ammonia production capacity at the site to support the increased urea production capability, as well to support other nitrogen fertilizer expansion. It is overhauling its Ammonia-2 and Ammonia-3 units, which on completion will increase ammonia output by 375,000 mt/y.  Acron puts its current total ammonia production capacity at Veliky Novgorod at 2.19 million mt/y (GM April 30, p. 32).

Uralchem Sees Uptick in 1H Output, AdBlue Volumes Increase

News, News Briefs, Russia

Uralchem, Moscow, reported a 1 percent increase in first-half production of commercial products to 3.32 million mt, up from the year-ago 3.29 million mt.

At Voskresensk Mineral Fertilizers, six-month output was up 11 percent on the year due to the commissioning of a new MAP production line. Commercial ammonia production at Uralchem’s Azot operation in Berezniki increased 6 percent year-over-year.

At Uralchem’s KCKK operation in Kirovo-Cheptesk, commercial output of ammonium nitrate was 2 percent higher in the first half of the year compared with a year-ago, while CAN production increased by 25 percent

Uralchem recently launched the production of AdBlue at Yartsevo in Russia’s Smolensk region (GM July 16, p. 33). In its output statement this week, it said it had produced more than 4,000 mt of AdBlue by the end of June.

Production capacity of AdBlue at the Yartsevo site is about 1,250 mt per month, with the possibility of raising this to up to 2,500 mt per month, according to Uralchem. The producer said in early July it plans to ship two-to-three 25-ton tanker truck loads per month to different customers.

IFFCO Seeks Green Light to Export Nano Urea Liquid

India, News, News Briefs, Specialty, Urea

Indian Farmers Fertiliser Cooperative Ltd. (IFFCO) is seeking permission from India’s government to export its recently launched Nano Urea Liquid product, according to Indian media reports.

The fertilizer cooperative began production of the new product in June at its facility in Kalol in Gujarat state, and by July 25 had produced 828,000 500 ml bottles of Nano Urea Liquid, according to a report by Outlook India news magazine, citing India’s Minister of Chemicals and Fertilisers Mansukh Mandaviya (GM July 30, p. 33; June 4, p. 32).

It is unclear which export markets IFFCO is targeting for the new product.

IFFCO in June signed MOUs with cooperatives in Brazil (GM June 18, p. 31), and Argentina (GM June 25, p. 32) to study the feasibility of setting up a Nano Urea Liquid production unit in each country. The Indian cooperative last month also inked MOUs with Indian companies National Fertilizers Ltd. (NFL) and RCF for the “transfer of technology” of Nano Urea Liquid in order that the two could establish production units for the product.

IFFCO has said the new product could cut conventional urea use by at least 50 percent.

ARA Applauds Senate Infrastructure Bill

News, News Briefs, U.S.

The U.S. Senate on Aug. 9 approved a $1 trillion bipartisan infrastructure deal that includes nearly $550 billion in new spending. The bill, which passed with a 69-30 vote and now goes to the House of Representatives, was applauded by the Agricultural Retailers Association (ARA).

“The Senate’s passage of the Infrastructure Investment and Jobs Act (IIJA) is a step in the right direction for rural America and U.S. ag retailers,” said ARA President and CEO Daren Coppock. “The investments included in the IIJA are long overdue and safeguard the ability of the agriculture industry to continue to do its job to bring a safe, plentiful, and consistent supply of food, fiber, and fuel to the American people and the world.”

According to ARA, the bill incorporates the Surface Transportation Reauthorization Act of 2021, which passed the Senate Committee on Environment and Public Works unanimously, and the Surface Transportation Investment Act, passed by the Senate Committee on Commerce, Science, and Transportation with bipartisan support. It also includes the Senate-passed Drinking Water and Wastewater Infrastructure Act and the Energy Infrastructure Act, which received bipartisan support in the Senate Committee on Energy and Natural Resources.

Coppock said ARA supported numerous provisions that were included in the bill, including reforms to the Farm-Related Restricted Commercial Drivers License Program, as well as an apprenticeship-type program for commercial drivers aged 18-20 years to help address the industry’s growing driver shortage.

Other ARA-supported provisions include authorization of $303.5 billion from the Highway Trust Fund for roads and bridges over five years; creation of a competitive grant program to address the surface transportation infrastructure of rural communities; codification of the One Federal Decision policy, which establishes a two-year goal for completion of environmental reviews for infrastructure projects; authorization of the Rural Opportunities to Use Transportation for Economic Success (ROUTES) initiative, which was created under the Trump administration to support the transportation needs of rural communities; and authorization of $42.5 billion to carry out a new grant program administered by the Commerce Department to provide grants to states to expand broadband to unserved and underserved areas and help bridge the digital divide.

“We applaud the bipartisanship that went into the passage of this bill and urge the U.S. House of Representatives to do the same, and in short order,” said Coppock. “The need for investment in infrastructure has long been a priority for ARA, and we will continue to work to ensure the needs of ag retailers, their farmer customers, and all of rural America are met.”

FCL Completes Brandon Upgrade; Launches Joint Venture with Blair’s

Canada, Featured, News

Federated Co-operatives Limited (FCL), Saskatoon, Sask., reported that it has completed a C$5 million upgrade to its Brandon, Man., fertilizer terminal. The cooperative also confirmed that its joint venture with Blair’s Family of Companies, a family-owned retail business in Saskatchewan, began operations on July 31 after receiving regulatory approval from Canada’s Competition Bureau.

First announced in November 2020 (GM Dec. 4, 2020), the Brandon upgrade increased storage capacity at the site by 9,000 mt, or 30 percent, to a total of 36,500 mt. Construction began in late October last year, barely three years after the Brandon facility became operational (GM Sept. 22, 2017).

“We went from having four bays with 27,500 mt storage to seven bays with 36,500 mt storage,” Matt Conacher, Senior Manager Fertilizer for FCL, told Green Markets. “This expansion will help us better serve local co-ops as we can increase our product offerings while having more available inventory on hand. We move a lot of tonnes through Brandon and feel like this expansion was needed to help alleviate some of the spring supply chain pressures.”

The Brandon site is used to warehouse, blend, and distribute a complete suite of crop nutrition products for FCL locations and agricultural producers in Manitoba and eastern Saskatchewan. The terminal also offers warehouse storage for liquid micronutrients and nitrogen stabilizers.

The Brandon facility is one of three fertilizer terminals operated by FCL. The company in 2016 announced an investment of C$75 million to build both the Brandon facility and a second, 45,000 mt fertilizer terminal in Hanley, Sask. (GM July 29, 2016). FCL opened a third fertilizer terminal last fall at Grassy Lake, Alta., which cost C$42.8 million and has 34,400 mt of storage capacity (GM Oct. 9, 2020). With the Brandon expansion completed, FCL said the three fertilizer terminals now have a combined storage capacity of 115,900 mt.

The joint venture with Blair’s was first announced in February of this year (GM Feb. 5, p. 1). The Competition Bureau announced in early July that it would not challenge the deal, provided that certain actions were taken pursuant to a consent agreement filed with the Competition Tribunal. The transaction closed on July 31.

The joint venture acquired seven Blair’s ag retail locations in Saskatchewan, providing crop inputs, animal nutrition products, and agronomic services to farmers near Lanigan, Liberty, Lipton, McLean, Nokomis, Rosthern, and Watrous. As a condition of regulatory approval and in accordance with the consent agreement, the joint venture will sell its interest in the Lipton location and anhydrous ammonia assets in Lipton and Balcarres after closing.

“Both Co-op and Blair’s have such deep roots in our communities and we are very excited with the opportunity to continue serving our valued farm customers through this new joint venture partnership in the years ahead,” said Ron Healey, FCL’s Vice-President of Ag and Consumer Business. “Blair’s farm customers will still work with the same experienced and knowledgeable teams they have trusted for years and will now have access to industry-leading services and a broad portfolio, including high-quality products exclusively manufactured or distributed by Co-op.”

Blair’s staff will continue to manage the day-to-day operations of the retail locations under the Blair’s banner, with the Blair’s management team reporting to the joint venture’s board of directors. Eight Capital acted as financial advisors to Blair’s in connection with the joint venture and will act as financial advisor to the joint venture for the sale of the Lipton location.

“For over 73 years, our business has been committed to providing innovative solutions to advance the business of our farm customers,” said Kevin Blair, CEO of Blair’s Family of Companies. “We are excited to be working with FCL as part of the new joint venture as they share our core values and commitment to our customers, employees, and communities.”

Bayer Loses Appeal in Earlier Roundup Case; Fourth Trial Begins in California

News, News Briefs

Bayer AG on Aug. 9 lost another round in the ongoing litigation over its Roundup herbicide when a California appeals court in San Francisco refused to overturn a 2019 verdict that awarded  $86.7 million to a couple who claimed the glyphosate-based herbicide caused their cancer.

The original jury award to Alva and Alberta Pilliod in Alameda County Superior Court in Oakland, Calif., was $2 billion in punitive damages and $55 million in compensatory relief (GM May 17, 2019), but the trial judge later reduced it to $86.7 million.

The ruling by the 1st Appellate District in the Court of Appeal for California stated that Monsanto Co., which Bayer acquired in 2018 for $63 billion, exhibited “reckless disregard” for the health and safety of Roundup customers “over a period of many years motivated by the desire for sales and profit.”

In its appeal, Bayer argued that the Pilliod claims were preempted by federal law and the jury’s causation findings were flawed. The company also argued that the damage award should be further reduced, and that the verdict was the product of “attorney misconduct” and the trial court should not have admitted certain evidence.

Two earlier Roundup trials yielded combined damages of $159 million against Bayer, including an August 2018 decision by a California jury (GM Aug. 17. 2018) awarding $289 million in damages to a groundskeeper who claimed Roundup gave him cancer, although that amount was later reduced to $78 million (GM Oct. 26, 2018). A U.S. jury awarded a second California man more than $80 million in March 2019 over a similar claim.

A fourth Roundup trial began on Aug. 5 in state court in San Bernardino, Calif. According to Bloomberg, lawyers for Donnetta Stephens began laying out their claims to a jury that the 70-year-old woman developed non-Hodgkin’s Lymphoma after using Roundup for more than 30 years in her yard.

Before the trial started, Bloomberg reported that Bayer’s lawyers persuaded California Superior Court Judge Gilbert Ochoa to throw out Stephens’ claims that the company hid Roundup’s health risks. This may make it easier for the manufacturer to win the case, said Richard Ausness, a University of Kentucky law professor who teaches about mass injury suits.

“Failure to warn in these product-liability cases is usually the strongest claim, so if that’s out, Bayer definitely has a better chance of winning the case,” Ausness told Bloomberg. “Sounds like they could really use a win.”

ARA Opposes UAN Antidumping Petition

Caribbean, Featured, News, Russia, U.S., UAN

The Agricultural Retailers Association (ARA) on Aug. 6 added its voice to the antidumping and countervailing duty (CVD) investigations launched by the U.S. Department of Commerce (DOC) into UAN imports from Russia and Trinidad and Tobago.

In two separate letters addressed to DOC Secretary Gina Raimondo, ARA President and CEO Daren Coppock expressed opposition to the CVD petition, while acknowledging that CF is an ARA member and that “manipulated markets for natural gas and other subsidies aid exporters in other countries.”

“ARA members and their farmer customers purchase UAN from both domestic and foreign manufacturers,” the letters state. “While ARA strongly supports the domestic fertilizer industry and policies that will make them more efficient and competitive globally, we also support reducing both domestic and international trade barriers. Our overriding priority is what will be best for farmers and the retailers who serve them. Limiting fertilizer supply options for America’s farmers and ranchers in today’s marketplace will without question increase prices to farmers and limit product availability.”

ARA noted that domestic UAN production is primarily in the center of the country, with much of the imported UAN used in markets on the U.S. West and East coasts. Coppock said approximately 75 percent of all UAN used in the coastal markets is presently imported.

“Therefore, the effect on farmers and retailers would be especially sharp on the U.S. East and West coasts,” Coppock said. “The threat of material injury occurring in this scenario is the prospect of losing access to 75 percent of current UAN supply in the coastal markets. That outcome would pose severe material injury to growers and retailers.”

ARA urged the DOC to instead consider abolishing the Jones Act requirements for domestic shipping between U.S. ports, which Coppock said would be a better remedy than imposing duties on imports.

“The original justification for the Jones Act was to support a U.S. merchant marine fleet that could be called upon in times of military need to transport materiel,” Coppock said. “This function has not been used in decades despite multiple deployments of U.S. military assets. Therefore, the fundamental justification of the Jones Act no longer exists.”

ARA also took aim at the U.S. rail industry, arguing that dramatically higher freight rates over the last 15 years have further hampered the domestic industry’s ability to supply UAN to coastal markets in a timely and cost-effective manner.

“High transportation costs due to noncompetitive rail service and Jones Act requirements for ocean shipping between U.S. ports serve to make the domestic industry less competitive in reaching these coastal markets,” Coppock said. “The single U.S.-flagged vessel owned by CF Industries cannot supply markets on both coasts in a timely manner.”

Coppock noted that ARA’s opposition to the current UAN petition mirrors its past positions in antidumping cases involving fertilizer imports. The trade association in 2004 and 2005, for example, urged the U.S. International Trade Commission to revoke antidumping duty orders on urea imports from Russia and Ukraine, citing domestic supply concerns and prohibitively high fertilizer prices (GM Dec. 9, 2005; Sept. 19, 2005).

“We write today to reiterate our support for unfettered global trade in these products and specifically in opposition to this CVD petition,” ARA said in the Aug. 6 letters. “Our policy position supporting fair and free trade of agricultural products is a top priority, set by our board of directors, and this includes foreign and domestic manufacturers alike. We ask that you deny the CVD petition.”