All posts by mickeybarb@charter.net

Compass to Sell South American Specialty Fertilizer Business to ICL for $418 M

Brazil, Featured, Israel, News, Southern Plains, Specialty

Compass Minerals, Overland Park, Kan., said on March 24 it has entered into a definitive agreement to divest its South America Plant Nutrition business (Compass Minerals América do Sul SA) to ICL Brasil Ltda., a subsidiary of ICL Group (ICL), Tel Aviv.

The transaction agreement provides for total potential gross cash proceeds of approximately $418 million based on current exchange rates. The deal is expected to be completed in third-quarter 2021, subject to customary closing conditions and required antitrust approval in Brazil.

“Over the past year, our board and senior management team have been conducting a detailed analysis of our company’s current asset portfolio, product mix, and core competencies with the aim of maximizing sustainable value creation for our shareholders, customers, and communities,” said Kevin S. Crutchfield, president and CEO. “Today’s announced transaction represents a significant step toward that goal as it will strengthen our balance sheet and enhance our ability to pursue strategic opportunities for growth as a leading essential minerals company.”

As recently announced (GM Feb. 19, p. 33), the company launched dual sales processes earlier this year for its plant nutrition and its water treatment/chemicals businesses in Brazil. The company’s South America chemicals business is not included in this transaction, and that sale process is ongoing.

“This transaction, together with our recent acquisition of Fertiláqua in Brazil (GM Jan. 8, p. 30) and our existing specialty plant nutrition business there, will position ICL as the leading specialty plant nutrition company in Brazil, one of the world’s fastest growing agriculture markets,” said Raviv Zoller, ICL President and CEO. “This important next step delivers on our stated strategy of achieving leadership positions in high-growth specialty plant nutrition markets, such as Brazil, and also accelerates our progress toward long-term global leadership for our Innovative Ag Solutions division.

“Also, this will significantly expand ICL’s product portfolio and profitability, while providing further seasonal balance between the Northern and Southern hemispheres,” added Zoller. “In addition, this acquisition is expected to generate significant commercial and operational synergy opportunities through the combined strengths of ICL, Fertiláqua, and the market leading South American Plant Nutrition business of Compass Minerals, and will also allow us to deliver the critical mass we have been seeking in Brazil. We look forward to welcoming the South American Plant Nutrition team and having them join our existing team in Brazil.”

ICL called the Compass assets the leading specialty plant nutrition business in Brazil, offering a broad range of solutions for plant nutrition and stimulation, soil treatment, seed treatment, and plant health, covering all key Brazilian crops. Its product portfolio includes enhanced efficiency fertilizers and controlled-release fertilizers, soil and foliar micronutrients, secondary nutrients, biostimulants, and adjuvants.

The business has an existing presence in 25 out of 26 Brazilian states. It serves more than 2,000 farms directly and more than 30,000 farms indirectly, with direct-to-farm sales accounting for approximately 50 percent of total sales. It also serves more than 250 ag-input retailers and co-operatives.

Founded in 1965 as Produquímica, the business is headquartered in São Paulo. It employs more than 1,000 people and operates six production sites and one research and development center.

ICL said the combined businesses will leverage a well-established asset base, with a total of eight production sites and a sizable salesforce providing full commercial coverage for all agricultural regions in Brazil.

Upon completion of the acquisition, ICL expects that it will be able to offer the broadest and most advanced portfolio of plant nutrition products covering the entire agricultural value chain. Its expanded customer base will span from B2B providers, such as plant nutrition manufacturers and bulk blenders, to B2C partners, such as ag-input retailers, co-operatives and large farms.

ICL apportioned the $418 million sales price as approximately R$2,207 million (US$402 million, based on a Brazilian real-to-U.S. dollar exchange rate of $5.4951/US$1.00). This amount includes the assumption of approximately R$600 million (US$109 million) of net debt and is subject to customary post-closing adjustments. In addition, the transaction includes an earnout of up to approximately R$88 million (US$16 million).

ICL said the unit’s full-year 2020 net revenue was approximately R$1,442 million (US$284 million), with EBITDA of approximately R$235 million (US$46 million), excluding the water treatment and chemicals businesses. It said these results demonstrate strong top-line growth and reflect a compounded annual growth rate of approximately 10 percent, since the business was acquired by Compass Mineral in 2015 and 2016 (GM Aug. 19, 2016). At the time that Compass acquired the entire business (fertilizer and chemicals), the price was put in the $426-$446 million range.

Compass said it intends to prioritize the use of proceeds to pay down debt in addition to other corporate purposes. Based upon the midpoint of its adjusted EBITDA guidance range for 2021, the company anticipates the pro forma 2021 year-end leverage ratio to be approximately 3.4 times net debt to adjusted EBITDA, which is significantly below the year-end 2020 leverage ratio of 4.3 times net debt to adjusted EBITDA.

Phase Two Trials Announced for Next Gen Fertilizer Challenge

News, News Briefs, Specialty

The organizations and products selected for Phase Two trials in the Next Gen Fertilizer Challenges were announced on March 23 by The Fertilizer Institute (TFI), the International Fertilizer Development Center (IFDC), The Nature Conservancy, and the National Corn Growers Association (NCGA).

The Next Gen Fertilizer Challenges were launched on Aug. 26, 2020 (GM Aug. 28, 2020), as a partnership between those four organizations, the U.S. Environmental Protection Agency (EPA), and the U.S. Department of Agriculture (USDA). The goal is to accelerate the development of innovative fertilizer product technologies and to increase the use of existing enhanced efficiency fertilizers (EEFs) that maintain or increase crop yields and reduce environmental impacts to air, land, and water.

Phase One included review and selection of product nominations by an expert judging panel. Phase Two will be initiated this spring and will include greenhouse trial evaluations of the winning products by researchers at IFDC. The products will be evaluated based on environmental, agronomic, and economic performance factors.

The companies and their products selected for this trial include AgroLiquid for Pro-Germinator; CHS Agronomy for Trivar; Corteva Agriscience for Optinyte; EuroChem Agro for ENTEC; Harrell’s for POLYON; Koch Company Services for both CENTURO and SUPERU; MicroSource for Hi-Test; Nutrien for ESN; Pursell Agri-Tech for PurYield; Renuvix for Renuvix CRFs; SABIC for BCRU; The Andersons for Struvite DG; Timac Agro USA for both Duo Maxx and Top-Phos; and Verdesian Life Sciences for AVAIL.

“For generations, we’ve seen how innovation has shaped modern U.S. agriculture into the most successful and efficient production system in the world,” said Corey Rosenbusch, TFI President and CEO. “This public-private partnership represents the next generation of fertilizer technologies that will produce results for farmers and the land. I am proud to see several TFI members selected here as industry leaders in adopting and promoting these new technologies.”

The first of two Next Gen Fertilizer Challenges – EEFs: Agronomic and Environmental Challenge – aims to identify existing EEFs currently on- or near-market that meet or exceed certain environmental and agro-economic criteria. The second component of the Next Gen Fertilizer Innovation Challenge will identify novel pre-market technologies for fertilizers that can reduce the environmental effects from modern agriculture while maintaining or increasing crop yields.

“I am pleased to see the Next Gen Fertilizer Challenge bridging the gap between good ideas and their implementation,” said Albin Hubscher, IFDC President and CEO. “Strategic partnerships such as this will continue to catalyze innovation in improving global soil health and closing the yield gap. IFDC anticipates exciting results from our evaluations of these products.”

“Corn farmers have a vested interest in using new technology that improves their operations and minimizes their environmental impact,” said NCGA President John Linder. “We are pleased to be a part of these Challenges and to work with these partners to promote sustainable farming practices that build up soil health, allowing farmers to improve productivity and profitability while also preserving natural resources for future generations.”

“The Nature Conservancy is excited to be part of the Next Gen Fertilizer Challenges as a way to drive new innovations that will help farmers better understand which enhanced efficiency fertilizers may work best on their farm,” said Carrie Vollmer-Sanders, Director of Strategic Engagement for Agriculture at The Nature Conservancy in North America. “We are strong advocates of the 4R approach to nutrient management and believe that the EPA and USDA’s science-based approach to the challenge will help farmers implement the 4Rs on their cropland.”

Mosaic, AgBiome to Collaborate on Biologicals

Featured, News, Specialty

The Mosaic Co., Tampa, said on March 23 it will collaborate with AgBiome, Research Triangle Park, N.C., with the aim of launching novel biological approaches to enhancing soil fertility. The collaboration will leverage AgBiome’s proprietary Genesis™ platform that comprises microbes coupled with product discovery technology. Mosaic will lend expertise in soil health and product development, as well as its global distribution and sales network. Together, the companies expect to find solutions that can be added to Mosaic’s soil health portfolio.

“Our collaboration with AgBiome is part of a larger, multi-partner effort at Mosaic to expand the company’s soil health offerings,” said Kim Nicholson, Mosaic Vice President-Ag Technology and Innovation. “Now more than ever, growers are interested in engaging with companies that recognize the need for soil conservation strategies. Our work with AgBiome is expected to expand our innovative products in that space.”

The announcement follows a growing list of recent Mosaic partnerships, including Anuvia Plant Nutrients, Bio-Consortia, and Sound Agriculture (GM March 19, p. 1).

“It’s exciting to collaborate with a global agriculture powerhouse like Mosaic,” said Tracy Raines, AgBiome Chief Innovation Officer. “Our work together, focused on soil health, demonstrates the grower’s demand for natural, biological solutions to enhance soil nutrition – leading to better crop quality and yield.”

AgBiome discovers and develops biological and trait products for crop protection. The proprietary Genesis platform captures microbes for agriculturally relevant applications and screens them for insect, disease, and nematode control.

Through its commercial subsidiary, AgBiome develops and sells proprietary crop protection solutions. The first of these, Howler®, is a fungicide for disease control in a broad variety of crops. AgBiome and Genective recently formed a strategic partnership to establish a new leader in insect traits. AgBiome has a global R&D collaboration with Elanco Animal Health Inc. to develop nutritional health products for swine.

Koch, Simplot Plants Win EPA Energy Star Certification

News, News Briefs, U.S.

The Fertilizer Institute (TFI) on March 22 announced that three nitrogenous fertilizer manufacturing plants in the U.S. have earned the U.S. EPA’s 2021 Energy Star certification for superior energy performance. These include Koch Fertilizer plants at Beatrice, Neb., and Enid, Okla., and a J.R. Simplot facility in Helm, Calif.

“We congratulate TFI members Koch Fertilizer and the J.R. Simplot Company for their recognition by the EPA for operating highly efficient plants,” said TFI President and CEO Corey Rosenbusch. “The fertilizer industry is essential to our modern way of life, and our members have made minimizing the environmental impact of crop nutrients a key pillar of how they operate. This certification by the EPA shows that when it comes to environmental stewardship, the fertilizer industry doesn’t just talk the talk, we walk the walk.”

TFI noted that Koch’s Beatrice facility and Simplot’s Helm facility earned Energy Star certification in 2020 as well. “Earning this designation from the EPA two years in a row shows that our industry is serious about the role we play in not only feeding the world but doing so in a sustainable way for the long-haul,” Rosenbush said.

Manufacturing plants that are verified to be among the most energy efficient within their sector are eligible to earn EPA’s Energy Star certification. To measure energy efficiency, EPA worked with the fertilizer industry to develop an Energy Performance Indicator (EPI) for nitrogenous fertilizer plants. Energy Star® is the government-backed symbol for energy efficiency, providing simple, credible, and unbiased information that consumers and businesses rely on to make well-informed decisions.

“Environmental issues play a large role in TFI’s recently released 2021 public policy priorities, specifically the important role that the fertilizer supply chain plays in being part of the solution to address the many challenges of a changing climate,” Rosenbusch added. “We are proud of the accomplishments of TFI members Koch and Simplot and will continue pushing for industry innovations that lessen environmental impacts and protect the communities in which we operate as we help to grow the food, fuel and fiber to feed our country and world.”

Trammo Partners in Transhydrogen Alliance

Ammonia, Europe, Featured, Middle East, News, Scandinavia

Trammo Inc.’s Dubai-based subsidiary, Trammo DMCC, along with Proton Ventures BV, an engineering and development company in the Netherlands, and VARO Energy, a European mid- and downstream energy company, have signed a Memorandum of Understanding to form a consortium – Transhydrogen Alliance – that entails a joint initiative and mutual cooperation on the production and import of green hydrogen and green ammonia into Europe via Rotterdam, as well as its export from selected locations worldwide.

The Transhydrogen Alliance intends to start its collaboration with an initial project for the production of green hydrogen produced from solar and wind rich areas and the import of the hydrogen in the form of green ammonia into Europe. The initial project is expected to be completed by 2024.

Following success of the initial project, Transhydrogen Alliance targets the import of up to 500,000 mt of green hydrogen equivalent to up to 2.5 million mt green ammonia per year via the Port of Rotterdam. The parties said the Port of Rotterdam Authority supports the consortium, especially in its efforts to set up an import terminal in Rotterdam for these new supply chains.

“Transhydrogen Alliance offers an integrated supply chain, with reduced costs for the import of green hydrogen and green ammonia into Europe,” said Hans Vrijenhoef, Proton Ventures CEO. “Through advanced technology we can make green energy available at an affordable cost.”

“Trammo is proud to participate in the project and to help advance the transition of the global ammonia supply chain, as well as the distribution of green energy carriers such as Hydrogen,” said Christophe Savi, Head of Trammo’s Ammonia Division. “We are excited to work with a stimulating and engaging group of partners who seek to progress rapidly in achieving our shared goal of producing and providing to the industry a safe, clean and economically sustainable product.”

Trammo and Proton Ventures signed a MOU for joint cooperation on green ammonia projects in January (GM Jan. 22, p. 1). Under that MOU, Proton Ventures would construct green ammonia production units, storage facilities, and import and export terminals (NFuel Projects), and subsequently supply the green ammonia produced through wind and solar energy to Trammo.

VARO, the other party in the new Transhydrogen Alliance, operates throughout the complete downstream fuel supply chain with refining, storage, blending, distribution, sales, and marketing assets. It owns a refinery in Cressier, Switzerland, a majority share in the Bayernoil refinery, Southern Germany, as well as storage facilities, distribution and marketing businesses in Benelux, France, Germany and Switzerland.

VARO’s shareholders include Carlyle International Energy Partners, an advisory fund that is part of the global alternative asset manager The Carlyle Group, and international energy and commodities company Vitol.

KBR Awarded Two Acron NH3 Plant Revamps, Another Commissioned

Ammonia, Houston, TX, News, News Briefs, Russia

KBR, Houston, announced on March 24 that it has been awarded contracts for revamping two ammonia plants by PJSC Acron Group, Novgorod, Russia. KBR will supply the process technology license, basic engineering design package, and proprietary equipment for the ammonia plants to increase production capacity by over 30 percent to 2,300 Mt/d each. The original plants were commissioned in the 1970s.

The key revamp measures will include KBR’s KRES™ technology, KBR’s Horizontal Ammonia Convertor, and other advanced features that enable KBR to increase output and overall energy efficiency, as well as reduce greenhouse gas emissions per ton of ammonia. The completion of the first revamp project including commissioning and start-up is expected in 2023.

On March 22, KBR announced that another revamp project for Acron had been successfully commissioned at the Dorogobuzh site in Russia. KBR said the plant performance post revamp has surpassed all guaranteed parameters. This plant was revamped to enhance the ammonia production capacity from its original 1,360 mt/d to 2,100 mt/d and reduce energy consumption.

Gensource Completes Technical Report; Construction Could Start by Year’s End

News, News Briefs, Potash, Saskatchewan

Junior solutions miner Gensource Potash Corp., Saskatoon, said on March 22 it has completed its National Instrument (NI) 43-101 Technical Report, providing the most current technical and economic information for its first project, the Tugaske Project. It said the project is nearing completion of the non-recourse financing process with its debt and equity partners – aiming to move towards construction later this year.

“Since our last technical report, the company has grown rapidly and the project has progressed notably,” said Mike Ferguson, Gensource President and CEO. “Gensource and our partners remain confident that the Tugaske Project, as validated by our team of experts and disclosed in this 2021 Technical Report, is technically and economically robust – and as such, we continue to move as swiftly as possible to complete the financing process in order to see the project realized. We are pleased to share the updates on our first project, and look forward to more exciting announcements to come.”

Key milestones have already been achieved, including securing a customer, Helm Fertilizer Corp., for 100 percent of the intended production of 250,000 mt/y of granular potash. The company has adjusted its production for the U.S. market. The product will be pink or white and SGN 300 granular.

There will also be a 25,000 st storage facility at the project site, with a bulk railcar track with the ability to load and ship both by bulk rail or truck. Helm will take title to the product at the project site.

Other milestones include: additional resource confirmation drilling and geological studies focused on operational items; arranging for the senior debt facility; attracting potential equity partners; advancing engineering and design efforts; completing land control activities to enable the project to proceed into construction smoothly; selection of key vendors; advancing long-lead procurement; and completion of a FEED (Front End Engineering and Design) level study, ready for full execution.

Total capital expenditure for the project is put at US$261.9 million. Construction will take 24 months, with peak construction work force of approximately 150.

Operating expenses are put at US$47.48/mt KCI, with the major expense being natural gas. The all-in cost is put at $79.87/mt. The operating personnel count is 46 full time staff members.

The study puts proven and probable reserves of 14.5 million mt, which indicates a minimum expected mine life of at least 58 years based on annual production of 250,000 mt. However, Gensource said economic analysis only considers 40 years of full production.

TFI Intervenes in Phosphogypsum Appeal

Florida, News, News Briefs, Phosphate

The Fertilizer Institute on March 19 was granted permission to intervene in a case where several petitioners are contesting new phosphogypsum application rules that were approved by the U.S. EPA last October (GM Jan. 8, p. 29; Oct. 16, 2020). The intervention allows TFI to defend EPA’s decision in case the Biden administration does not.

“We are pleased that the court granted our motion to intervene, and we look forward to working with the EPA as this process moves forward,” said Kathy Mathers, TFI Vice President, Public Affairs.

At the request of TFI, EPA approved the limited use of phosphogypsum for government road projects. Phosphogypsum, normally stored in stacks, is waste from wet acid phosphate production and contains high concentrations of uranium and radon.

TFI estimated that use of the phosphogypsum would be uneconomical beyond a 200-mile radius of existing phosphogypsum stacks. However, the Florida-based plaintiffs argued the state has at least 25 phosphogypsum stacks and that the 200-mile radius would include virtually the entire state. There are estimated to be over 60 phosphogypsum stacks in the U.S. located in 13 different states.

The case is the Center for Biological Diversity et al. v. EPA and Andrew Wheeler, Administrator. It is before the U.S. Court of Appeals for the District of Columbia Circuit.