All posts by mickeybarb@charter.net

Gensource Seeks Listing on LSE’s AIM

News, News Briefs, Potash, Saskatchewan

Junior miner Gensource Potash Corp., Saskatoon, has announced its intention to apply for the admission to trading of the company’s common shares on the London Stock Exchange’s AIM market. The company is seeking admission to AIM in order to enhance its access to U.K. and European institutional investors.

Gensource said it has received significant interest given its business relationship with offtake partner Helm AG, lead debt arrangers KfW IPEX-Bank and Societe Generale SA, and its ESG-friendly approach to potash production.

“We see the potential admission to trading on AIM as a natural step for Gensource to support its next phase of growth as we transition to a sustainable potash producer with the Tugaske Project in Saskatchewan, Canada,” said Mike Ferguson, Gensource President and CEO.

“Gensource is a unique investment proposition in the potash sector, located in a Tier One mining jurisdiction, offering strong ESG credentials, a close relationship with off-take partner Helm AG, and a nimble pricing structure that allows us to deal straight with the retailer,” he continued. “The London market is known for its deep knowledge of the mining sector and as an investment destination for institutional capital from around the world and a dual listing would increase the company’s international profile and facilitate improved access to U.K. and international institutional investors.”

Gensource common shares will continue to be listed and traded on the TSX Venture Exchange.

Scotts Results Continue to Climb; Raises Prices as Commodities Move Up

Earnings, Eastern Cornbelt, News, Specialty

Scotts Miracle-Gro Co., Marysville, Ohio, reported net income of $310.2 million ($5.43 per diluted share) on sales of $1.83 billion for the second-quarter ending April 3, 2021, up from the year-ago $252.4 million ($4.47 per share) and $1.38 billion, respectively.

“The record level of consumer demand we have seen for our lawn and garden products is greater than we expected and may provide upside to the updated guidance we provided for our U.S. Consumer business in early April,” said Jim Hagedorn, Chairman and CEO. “Consumers told us entering the season that they intended to stay engaged with lawn and garden and, so far, that is exactly what they are doing. Retailer support for the category remains strong as we enter a period of challenging year-over-year comparisons.”

“The margin pressure we are experiencing from higher commodity and distribution costs is expected again in the third quarter and should begin to moderate with year-over-year pricing that takes effect in the fourth quarter,” said Cory Miller, Senior Vice President and Interim CFO. “Given cost pressures and other investments necessary to keep pace with recent growth trends, we have communicated to our retail partners our intention to increase prices of our consumer lawn and garden products by mid- to high-single digits effective in August. A similar price increase was implemented at Hawthorne in recent weeks.”

Six-month net income was $335.3 million ($5.87 per share) on net sales of $2.58 billion, up from the year-ago $181.1 million ($3.19 per share) and $1.75 billion, respectively.

NeuAg LLC – Management Brief

Management Briefs

Karin Nystrom is joining NeuAg LLC, Freeport, Texas, as Director of Industrial Sales reporting directly to Joe Newcomb, President. She will be responsible for sales to companies outside of the traditional agriculture sector.

Most recently, she has been an independent strategic business consultant to startups and Multinational Fortune 500 corporations in the fertilizer and the agtech sector, as well as related industries. Based in St. Louis, she has led consulting projects that have included domestic and international growth initiatives, finance, logistics, and distribution modeling.

Previously, she held various management and leadership positions with companies focused on production agriculture, including DuPont/Pioneer, Geosys Inc., Dyno Nobel, and Agrilliance.

Sollio Cooperative Group – Management Brief

Canada, Management Briefs

Montreal-based Sollio Cooperative Group, formerly known as La Coop fédérée, announced in late April that CEO Gaétan Desroches plans to retire and leave his position effective Sept. 10, 2021. Pascal Houle, the cooperative’s current COO since February 2021, will become the new CEO effective Sept. 11, 2021, as per the organizational succession plan.

“On behalf of the members of the board, our employees, and our cooperative members, I would like to extend my sincerest thanks to Gaétan Desroches for his outstanding work, not only during his tenure as CEO, but also throughout his 40-year career in our network,” said Ghislain Gervais, President of Sollio Cooperative Group. “Under Gaétan Desroches’ leadership, Sollio Cooperative Group maintained its growth and strengthened its position as a leader in the Canadian agri-food and retail chain, and its sales increased from $5 to $8 billion in six years.”

Houle joined the Sollio Cooperative Group network in 1998, and held several positions before being appointed General Manager of the cooperative in 2008. In 2013 he joined BMR Group as Retail Vice-President, and in 2015 he became CEO of BMR Group and Executive Vice-President of Sollio Cooperative Group. He holds a Bachelor of Business Administration and is a Chartered Management Accountant and Chartered Professional Accountant.

Three other appointments were also made to the management committee of Sollio Cooperative Group. These include Stéphanie Couturier, who will serve as Vice-President of Communications; Saad Chafki, who was named the new Senior Vice-President of Information Technology; and Marc Gauthier, who was appointed Vice-President of Human Resources.

Couturier was formerly Vice-President of Communications and Corporate Social Responsibility at BMR Group, and served as Strategic Communications Advisor at Sollio from 2012-2016. Chafki has served as Vice-President, Digital, Information Technology and Projects at Sollio Agriculture since 2016, and will continue in that role as he takes on his new position. Gauthier was previously Vice-President of Human Resources at BMR Group, and will continue in that role until a successor is appointed.

Bion Adds Lamb Farms Project

News, News Briefs, Specialty

Bion Environmental Technologies Inc., New York City, a developer of patented waste treatment technology, reported that it executed a Letter of Intent (LOI) with Lamb Farms Inc., Oakfield, N.Y., a large dairy operator in upstate New York. It said it expects the LOI to lead to an agreement within 60-90 days to develop a Bion third-generation (3G) treatment platform at Lamb Farms’ Oakfield, N.Y. dairy facility. The project will initially treat the waste from the 2,000-head milking herd at that location.

Bion said Lamb Farms is already involved in sustainability with an onsite anaerobic digester in place that will significantly speed up the timeline for system installation and startup. It is also one of a select number of facilities in the country that currently upgrades its methane to pipeline condition, allowing clean carbon dioxide to be recycled from the biogas waste stream to produce ammonium bicarbonate.  

Bion said the Oakfield location is approximately 30 miles from Buflovak, Bion’s prime engineering/ technology provider, so that any challenges associated with scaling up the platform can be conveniently and quickly dealt with.

As a part of this project, a demonstration “beef barn” that houses and produces a mix of sustainable and sustainable/organic beef cattle would be constructed onsite. The beef installation will allow Bion to demonstrate proof of concept of its beef opportunity, while also pursuing certification of a verified sustainable brand through the USDA’s Process Verified Program (PVP).

Bion’s patented third-generation technology was designed to substantially reduce the environmental impacts of large-scale livestock production and deliver a USDA-certified sustainable product to the consumer. The platform simultaneously recovers high-value co-products, including ammonium bicarbonate, a fertilizer product, and renewable energy.

Arianne Phosphate – Management Brief

Canada, Management Briefs, Phosphate

Junior producer Arianne Phosphate, Saguenay, Quebec, said Jeffrey Beck assumed the role of CEO on May 5. He will also join the Board of Directors. He was the founding Managing Partner and Chairman of Ocean Partners Holding Limited, a base and precious metal concentrate trading house, from 2004 through 2020. He is a graduate of Queen’s University (Mining) and the University of Tennessee (MBA).

“Jeff brings us 40 years of experience in mining and trading industries,” said Dominique Bouchard, Executive Chairman. “We look forward to his proven deal-making ability and leadership qualities helping to push the Lac à Paul project towards a resolution for all Arianne stakeholders. The timing is crucial given the actual improvement in the agriculture and fertilizer sectors.”

Brian Ostroff, formerly CEO, will become President of the company and will continue to manage investor relationships, as well as equity financing, business initiatives, and partnerships.

OCI, ADNOC Start Preparations for Fertiglobe IPO

ADNOC - Abu Dhabi, Ammonia, Europe, News, News Briefs, Urea

OCI NV, Amsterdam, said on May 5 following board approvals its Fertiglobe joint venture with Abu Dhabi National Oil Co. (ADNOC) has started preparations for a potential initial public offering (IPO) in Abu Dhabi, subject to market conditions, but provided little in the way of further details in its first-quarter earnings statement.

OCI and ADNOC confirmed last month that an IPO of the nitrogen joint venture, headquartered in Abu Dhabi, was being considered (GM April 16, p. 1).

OCI NV CFO and Executive Director Hassan Badrawi told analysts and investors at a company earnings call on May 5 that the IPO is in the early stages of the process, and he could provide little comment on the rationale for the offering at this juncture. However, he said Fertiglobe will become “our vehicle for future growth outside North America and Europe, given the strategic location of the assets and its competitive cost structure, which becomes more evident when gas prices are higher across the globe.”

The IPO will help “crystallize” the value of Fertiglobe’s underlying business in the future, said Badrawi.

Fertiglobe was established in September 2019 following the two companies’ agreement to combine ADNOC’s fertilizer business into OCI’s Middle East and North Africa (MENA) nitrogen fertilizer platform (GM Oct. 4, 2019). The jv has a production capacity of 5 million mt/y of urea and 1.5 million mt/y of merchant ammonia, with OCI currently holding a 58 percent stake and ADNOC a 42 percent stake.

Bloomberg reported last month that Morgan Stanley, Citigroup Inc., HSBC Holdings Plc, and First Abu Dhabi Bank Plc have been appointed as advisers for the IPO.

The business is expected to be next in line for a listing, after ADNOC completes an IPO of its drilling business, according to a Reuters report last month, citing unnamed sources. Media sources this week, citing sources familiar with the deal, reported Fertiglobe could be valued between $5 and $5.5 billion.

Responding to an analyst’s question about Nigeria’s newer urea production facilities coming online, OCI NV CEO Ahmed El-Hoshy said Fertiglobe could “potentially” be a distributor for some of the producers as they build up their output capabilities.

Yara Launches Agoro Carbon Alliance

News, News Briefs, Scandinavia

Yara International ASA, Oslo, on May 7 announced the commercial launch of Agoro Carbon Alliance, a global business created for farmers to earn additional revenue from positive climate action. Yara said that by adopting climate-positive practices farmers can produce Farm Carbon Credits or climate-smart certified crops and help to decarbonize food supply chains.

Agoro Carbon will support farmers with the agronomical expertise and practical support to successfully sequester carbon in the soil and reduce emissions from the field. This will in turn generate third-party certified carbon credits and increase farmers’ income.  

“With the Agoro Carbon Alliance, our goal is to build a new global business that combines Yara’s unique market position with an alliance approach that actively invites others to choose a more climate-positive food future,” said Terje Knutsen, EVP Farming Solutions. “The farmer is at the center of everything we do at Yara. So we’ve designed Agoro Carbon to fit farmers’ needs, and how we can best support them as a trusted partner.”

Agoro Carbon Alliance launches commercial operations with a 30-person team and multiple partnerships across regions on four continents (Europe, Brazil, India, and the U.S.). It currently has employees in the four regions. U.S. farmers are already working with Agoro Carbon to produce the first Farm Carbon Credits in 2021.

OCI Plans Beaumont Blue NH3; Clean Fuels Unit Formed, Methanol Divestment Off Table

Ammonia, Featured, News

OCI NV reported that it continues to expand its offering of low carbon products to its customers, and will be able to produce blue ammonia at OCI Beaumont, Texas, up to the full ammonia production capacity of 365,000 mt/y, starting in the second half of 2021, according to its first-quarter financial report released on May 5.

It said it recently signed one agreement and one Letter of Intent (LOI) with two major industrial gases companies for the supply of low carbon hydrogen to the plant.

Decarbonizing the feedstock supply will allow OCI Beaumont to reduce its carbon footprint and offer both blue ammonia and bio-methanol to OCI’s downstream customers.

“This is even more pertinent at OCI Beaumont, which is strategically located in Texas in the center of one of the largest hubs for potential blue and green ammonia customers in the U.S.,” OCI NV CEO Ahmed El-Hoshy told analysts and investors at a company first-quarter earnings call on May 5.

“It has a large customer base that is not only an industrial feedstock space, but also fertilizers, where Texas is also a major producer. There is also future marine demand, as Beaumont is in close proximity to Houston, one of the four major global bunkering hubs for shipping,” said the CEO.

OCI already produces green ammonia at OCI Nitrogen in the Netherlands.

The company sees the use of ammonia or methanol as a shipping fuel as “particularly promising,” and in March signed two agreements to commercialize ammonia and methanol as shipping fuels by 2023/24 (GM March 5, p. 1).

OCI signed the agreements with two major shipping companies and an engine manufacturer. One Memorandum of Understanding (MOU) was inked with Man Energy Solutions (MAN) and Hartmann Gas Carriers Germany GmbH & Co., and a separate MOU with MAN and Eastern Pacific Shipping (EPS).

In a separate development, OCI has established a new Clean Fuels business unit, which focuses on sustainable fuels, and adding low carbon products including ammonia to its current and “fast-growing” biofuels offering of products such as bio-methanol and bio-MTBE.

The company said it established the unit as it sees its fuel business has “large-scale potential” for maritime and road transport in the future.

OCI said on May 5 it has taken the decision that any potential strategic action for its methanol business will be in the form of a partnership rather than a full divestment “given synergies with ammonia, and our leading positions in methanol and bio-methanol.”

“The exciting momentum around our ammonia and methanol business as enablers of the hydrogen economy has influenced our strategic review of our methanol business. Along with the accelerated strengthening of our balance sheet, market conditions for methanol have improved considerably since last year and the outlook remains positive,” said El-Hoshy.

He said a partnership, rather than a full divestment of the business, would facilitate “an acceleration” of the growth for OCI’s Clean Fuels business overall.

The CEO declined to comment on the stage of any negotiations for a potential partnership for the methanol business, but reiterated the company does not see it as “a financial sponsor type investment,” and that it would be “a strategic partnership” that could help “accelerate the growth trajectory” and add value.

Incitec Pivot Inks Urea Offtake with Perdaman; Project Moves on Financing

Australia, Featured, News, Urea

Australia’s Incitec Pivot Ltd. (IPL) said on May 5 its wholly-owned subsidiary, Incitec Fertilizers Pty Ltd. (IPF) has entered into a 20-year off-take agreement with junior producer Perdaman Chemicals and Fertilisers Pty Ltd. with a commitment to take up to 2.3 million mt/y of granular urea from Perdaman’s proposed urea plant at Karratha on Western Australia’s Burrup Peninsula.

The deal is subject to certain conditions precedent, with a primary one relating to Perdaman obtaining financing for construction of the new plant, which in turn depends on the junior producer finalizing gas supply arrangements and obtaining various environmental and other regulatory approvals for the plant.

In its statement, IPL said the conditions precedent must be satisfied within 18 months of the agreement.

IPL Managing Director and CEO Jeanne Johns said the offtake agreement provides IPF with the opportunity to secure a competitive long-term domestic supply of urea for its Australian customers and to expand sales into growing global markets.

The terms of the deal remain confidential to the parties.

In news confirming the offtake deal  on its website, Perdaman Chemicals and Fertilisers’ Chairman Vikas Rambal said the signing of the offtake agreement represented a major step forward in the development of the plant. He said regulatory and other approvals are well advanced. The company is targeting first production in the fourth quarter of 2025.

IPL currently is Australia’s sole urea producer with a plant at Gibson Island plant in Brisbane, Queensland, on Australia’s East Coast. The plant has capacity to produce 340,000 mt/y of urea, according to Green Markets data. However, the producer has been dogged with gas supply issues to the Gibson Island production site, which also includes ammonia and ammonium sulfate production capacity.

Australia’s urea demand has been growing strongly in recent years, with consumption in 2019 at around 2.1 million mt, according to IFA data. Green Markets estimates consumption reached about 2.5 million mt last year. But with rising input (energy) costs hitting domestic production, the country’s urea demand has been increasingly met by imports, with 2.4 million mt imported last year, up from 1.93 million in 2019, according to Trade Monitor Data (TDM).

Perth-based Perdaman’s plans to establish a 2.14 million mt/y granular urea project have been more than a decade under development. The company signed a 20-year natural gas supply agreement with Woodside Energy for the project in November 2018 (GM Nov. 21, 2018), and inked an engineering, supply of equipment and materials, construction, pre-commissioning, and commissioning contract for the execution of the urea plant in December last year with Clough Group, Perth, and Italy’s Saipem SpA (GM Dec. 31, 2020).

Perdaman and IPL back in 2010 had agreed to a urea offtake deal for Perdaman’s then-proposed coal-gasification Collie urea plant, also in Western Australia (GM Oct. 18, 2010). Perdaman subsequently shelved the project at the location, taking it north to Karratha.

Perdaman’s Karratha project is one of a handful of urea production projects at various stages of development in Australia (GM April 16, p. 35).

Perdaman this week is reported to have drafted in corporate finance consultants EY to help put together more than $1 billion in equity to finance the construction of its planned $4.5 billion Karratha urea plant in Western Australia, according to an Australian Financial Review report citing Street Talk.

According to sources cited, EY has begun “soft sounding” investors about the $1 billion-plus equity funding. It is reported that an equity position in the planned urea plant is being offered rather than an equity stake in Perdaman itself.

The 20-year urea offtake deal with Incitec Pivot Ltd. (IPL) subsidiary, Incitec Fertilizers Pty Ltd. (IPF), announced by IPL on May 5, was the final component to be in place before the hunt for finance could begin in earnest, according to the report.

In news on its website, Perdaman said following the offtake agreement, it will now progress towards finalization of the project financing. The company confirmed that it was being advised by E&Y and Société Générale S.A, and represented by Australia’s White & Case LLP.