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Yara 2Q income more than triples

News

Yara International ASA reported net income after non-controlling interests for the second quarter ending June 30 was NOK 3,716 million (US$598 million; NOK 12.86 per share, US$2.07 per share), compared with the year-ago NOK 1,122 million (US$180.5 million, NOK 3.88 per share). Excluding net foreign exchange gain/loss and special items, the result was approximately NOK 5.22 per share (US$.84) compared with NOK 1.19 per share (US$.19) in the second quarter of 2009. EBITDA for the quarter was NOK 6,587 million (US$1.06 billion), compared with the year-ago NOK 1,259 million (US$202.5 million).

“Yara reports strong second quarter results as fertilizer margins improved and production ran at close to optimal capacity utilization. The second-quarter result benefits further from the NOK 2.6 billion (US$418 million) after-tax gain on the sale of Yara’s shares in the Brazilian phosphate producer Fosfértil,” said Jørgen Ole Haslestad, Yara president and CEO.

“The new fertilizer season has had a promising start. Global nitrogen prices have increased as demand has picked up, and European nitrate prices have started substantially higher than at the beginning of the previous season, supported by low inventories. Fertilizer demand is backed by strong consumption growth for agricultural products and concerns that last years’ record yields following favorable weather may not be repeated.”

Fertilizer margins improved as realized nitrate prices were up 13 percent compared with last year, and NPK sales to core markets replaced lower-margin tender sales. Yara’s fertilizer deliveries ended 9 percent below last year, mainly due to high nitrate sales last year when prices were reduced to cut stocks, while NPK deliveries were up 5 percent from last year. Industrial segment sales continued to rebound and were up 21 percent, with strong growth for technical nitrates to the mining industry and nitrogen chemicals to the process industry. Fertilizer production increased 17 percent from last year, when significant NPK curtailments were needed. Yara said its fertilizer stocks ended in line with last year.

Fire kills two at Lifeco site in Libya

News

Two people have been killed and two injured in a tragic accident at the Libyan Norwegian Fertiliser Co. (Lifeco), Yara International ASA’s 50-50 joint venture in Libya. Fire broke out Sunday, July 11, while production was stopped for maintenance.

“We deeply regret the loss of lives. Our thoughts go out to the relatives of the deceased and the ones who were injured,” says President and CEO Jørgen Ole Haslestad. Yara has a 50 percent stake in Lifeco, which was established in 2009 (GM Feb. 16, 2009).

Sunday’s fire broke out in a heat exchanger while scheduled maintenance work was taking place. Yara said its head of production traveled to the site immediately and will assist the investigation team from Libya’s National Oil Corporation (NOC), one of Yara’s partners in the jv. Yara said safeguarding health and security is a high priority and a thorough investigation will aim to prevent similar accidents in the future.

Apart from the loss of lives and injuries, Yara said the material damage to the plant itself was limited. The scheduled stop in production at the affected plant will be prolonged – probably for a few weeks – while other production lines at the site will run normally.

Yara handles all urea and ammonia exports from Lifeco. As of the 2009 completion of the joint venture, urea capacity was put at 900,000 mt/y and merchant ammonia at 150,000 mt/y. The facilities are located at Marsa El Brega at the Mediterranean coast, some 700 km east of the Libyan capital of Tripoli, with approximately 1,200 employees.

USDA updates estimates for corn/soybean stocks

News

USDA’s World Agricultural Supply and Demand Estimates, released July 9, said beginning U.S. corn stocks for 2010/11 are down 125 million bushels due to increased feed and residual use, which more than offset a reduction for ethanol. USDA pegged 2009-2010 U.S. corn ending stocks at 1.478 million bushels, down 128 million bushels from its June estimate of 1.603 billion bushels.

With the forecast for harvested area down, corn production was lowered 125 million bushels, leaving supplies down 250 million bushels, 60 million below the 2009/10 record.

USDA projected a 50 million bushel drop in corn exports for 2010/11 as tighter domestic supplies, strong demand from ethanol production, and rising prices reduce the export competitiveness of U.S. corn.

Corn use for ethanol was lowered 50 million bushels, reflecting the latest ethanol production data from the Energy Information Administration, which suggested that June production, while up from April, will not reach March’s record pace. Ending corn stocks for 2010/11 are projected down 200 million bushels at 1,373 million bushels, 105 million below the 2009/10 projection.

The season-average farm price for corn is projected 15 cents higher on both ends of the range, to $3.45 to $4.05 per bushel, the report said.

As for soybeans, U.S. oilseed production for 2010/11 was projected at 100.8 million tons, up 1.7 million tons from last month, with increased soybean production accounting for most of the change. Soybean production is projected at 3.345 billion bushels, up 35 million due to increased harvested area, which was estimated at a record 78 million acres in the June 30 Acreage report (GM July 4, p. 14).

The soybean yield is projected at 42.9 bushels/acre, unchanged from last month.

Increased exports and crush offset increased supplies, leaving projected 2010/11 ending stocks at 360 million bushels, unchanged from last month. The report said higher soybean exports reflect increased import projections for China for 2010/11.

The U.S. season-average soybean price for 2010/11 is projected at $8.10 to $9.60 per bushel, up 10 cents on both ends of the range.

U.S. soybean exports for 2009/10 are projected at a record 1.46 billion bushels, up 5 million from last month, in part reflecting additional sales to China. Soybean ending stocks for 2009/10 are projected at 175 million bushels, down 10 million.

Micronutrient industry forms association

News

Leading micronutrient manufacturers and formulators have formed the Micronutrient Manufacturers Association (MMA) to promote, educate, and sponsor research on the agronomic use of micronutrients. The MMA will also engage in legislative and regulatory activities and facilitate industry communications.

Richard Camp, Kronos Micronutrients LP, Moxee, Wash., has been elected chairman.

“The formation of the MMA will serve as a vehicle to facilitate agronomic education, sponsor peer reviewed research, and publish peer reviewed articles that deal with micronutrient fertilizers,” said Camp. “By focusing on these joint industry issues, our membership and the greater agricultural marketplace will benefit.”

Ron Restum, Agrium Advanced Technologies (U.S.) Inc., Loveland, Colo., will serve as vice chairman, and Mike Dieker, Tetra Micronutrients, The Woodlands, Texas, is secretary/treasurer. Other directors of MMA are Dick Lowry, Nulex, Sioux City, Iowa, and Joel Bzura, Old Bridge Chemicals Inc., Old Bridge, N.J. Additional members of the MMA include Cameron Chemical, Virginia Beach, Va.; Omni Agri Trade Group, Arroyo Grande, Calif.; QC Corp., Baltimore, Md.; Winfield Solutions, Shoreview, Minn.; and Wolf Trax Inc., Winnipeg, Manitoba.

Steven Beckley of S. Beckley and Associates, Woodland, Calif., will serve as executive director and manage the association.

Active membership is open to firms that are micronutrient manufacturers and/or formulators. Associate membership is available to individuals and businesses that do not qualify for active membership but support the purposes of the association.

More information on the MMA can be obtained by calling Beckley at 916-539-4107, or emailing him at micronutrientassociation@gmail.com. The mailing address for MMA is P.O. Box 8563, Woodland, CA 95776.

Senators urge CFATS reauthorization

News Briefs

Washington-In a July 15 letter to Sen. Joe Lieberman (I-Conn.), a bipartisan group of lawmakers urged the Senate Homeland Security & Government Affairs Committee, of which Lieberman is chairman, to schedule a vote on S. 2996, the Chemical Facility Anti-Terrorism Standards (CFATS) reauthorization bill introduced earlier this year. S. 2996 reauthorizes CFATS in its current form for five years, and is supported by a broad coalition of chemical industry groups, including the Agricultural Retailers Association (ARA), which called it a “clean extension of the CFATS rules” that are enforced by the Department of Homeland Security (DHS). In the letter to Lieberman, Sens. Susan Collins (R-Maine), Mark Pryor (D-Ark.), George Voinovitch (R-Ohio), Mary Landrieu (D-La.), Tom Coburn (R-Okla.), Scott Brown (R-Mass.), John McCain (R-Ariz.), John Ensign (R-Nev.), and Lindsey Graham (R-S.C.) said security at the nation’s chemical facilities “is much stronger, and improving” as a result of CFATS. “It is critical that this program be extended and that Congress provides an additional period of regulatory stability for DHS and for America’s chemical industry,” the letter said. “Year-by-year extensions or fundamental changes to the program will undermine the long-term success of the collaborative security effort. Moreover, for an industry that is vital to America’s economy and standard of living, significant changes to the program could put crucial products and jobs at risk.” The letter criticizes a competing bill introduced in the House last fall, H.R. 2868, the Chemical and Water Security Act of 2009, which contains an inherently safer technologies (IST) provision that the industry strongly opposes. The letter says H.R. 2868 would “fundamentally change the character of the CFATS program,” and that it was opposed by 21 Democrats and 172 Republicans. “Because S. 2996 would allow DHS to continue to improve the security of our nation’s chemical facilities in a risk-based manner and not disrupt the current CFATS program, we urge you to place it on the Committee’s July markup in lieu of other bills that lack this level of bipartisan support and would fundamentally alter the successful CFATS program,” the letter said. The legislative authorization for CFATS will expire on Oct. 4, 2010. ARA said an industry coalition letter in support of S. 2996 will be sent to Senate offices later this month prior to any committee markup.

Koch breaks ground on Enid upgrade

News Briefs

Enid, Okla.-Koch Nitrogen Co. LLC said July 14 that it has broken ground on a multi-million dollar control center at its nitrogen plant here. This is the first of several planned capital projects at the largest fertilizer plant owned by Koch. “Today is a very exciting day for our company, as this new control center will allow us to take a more streamlined approach to our business,” said Steve Packebush, Koch Nitrogen president. “However, it is important to note that this new control center is a cornerstone for our future plans, a first step to lead the way for an additional $20 million-plus in capital expenditures in coming years.” Koch says the new center will allow the various plant units and employees to better communicate by combining three separate control rooms into one. The new control room, which is expected to be fully operational in 2012, will allow the plant facility to be fully automated. The control center will account for approximately $4 million of the $20 million in expenditures, according to the Enid News and Eagle. “By adding this control center, we will not only reduce energy and water use, we will also enhance overall plant reliability while simultaneously increasing its efficiency,” said Mike Kleis, plant manager. “We are thrilled to move forward on this project and to improve the plant’s long-term competitiveness.” The center will be housed in a new 10,000 square foot building, with construction to begin later in July. Koch’s Enid plant employs 100.

OCI to buy ammonia terminal

Calcium Ammonium Nitrate
Cairo-Orascom Construction Industries (OCI) said July 14 that OCI Fertilizer International B.V., a subsidiary, has signed an agreement to acquire 100 percent of the shares in MICRO Chemie B.V. MICRO Chemie B.V. owns and operates ammonia storage tanks with a combined storage capacity of 30,000 mt and has a lease for a terminal located at the port of Rotterdam in the Netherlands for a period of 25 years, starting from 2002 and extendable for another 25 years upon expiration of the lease contract. The terminal has a permit to receive up to 600,000 mt/y of ammonia and to deliver up to 550,000 mt/y. The terminal has waterway access comprising two jetties, which can accommodate both large tankers and smaller barges. These waterways provide access to the Rhine River, through which the majority of European inland shipping is routed, allowing delivery to France, Germany, and the Netherlands. In addition, the terminal is also accessible by a 160 km railway network running from the south and the east of Rotterdam up to, respectively, the Belgian and German borders. “The acquisition of MICRO Chemie B.V. offers significant synergies to the Group,” said OCI Nitrogen CEO Renso Zwiers. “It will, in the future, allow us to receive ammonia from the Group’s other production sources with a connection to a critical in-land transportation hub. The ammonia supply will also ensure additional security of ammonia supply to the Group’s Geleen production complex in the Netherlands, where ammonia is also produced and consumed in the manufacture of Calcium Ammonium Nitrate, and by neighboring third party chemical producers.”