Savage Services Corp., Salt Lake City, said Nov. 10 that it has entered into definitive agreements to acquire the assets, terminals, and services of Safe Handling Inc., Auburn, Maine. The transaction is expected to close Nov. 30.

Savage said the deal will greatly increase its market presence in the Northeast and will mark its entry into the state of Maine.

After the closing, Safe Handling will be rebranded as Savage Safe Handling and will continue to be based in Auburn, Maine. Bradley Crist has been named general manager and Savage vice president. He has been with Savage for eight years, most recently as vice president and business manager of Savage’s refinery and sulfur services group. He and his family will relocate from Salt Lake City to Auburn. He is a graduate of Brigham Young University and holds an MBA from the University of Pennsylvania, Wharton School of Business.

John Wolanski, formerly vice president of sales and marketing of Safe Handling, will be Savage Safe Handling’s vice president-business development. He is a graduate of the University of Vermont.

Bob Drake, of Safe Handling, will continue as vice president in the role of operational support and sales. He is a graduate of Boston University.

Savage called Safe Handling an industry leader and pioneer in providing full-service, bulk product, chemical, toll processing, transportation, warehousing, and transloading services to customers though its two primary locations in Auburn, Maine, and New Stanton, Penn. The company also operates a fleet of tank trucks dedicated to special services, as well as manufacturing facilities where materials are blended for regional deliveries, including an 80,000 square foot toll processing facility specializing in bulk chemical mixing, dispersing, slurrying, dissolving, blending, and diluting for Fortune 500 chemical producers.

Savage provides services to customers in several industries, including oil refining, chemicals, coal production, electric power generation, and Class I railroads. It owns and/or operates large bulk terminals for various products, including sulfur, as well as system-based transportation – truck, rail, barge and vessel – moving over 50 million tons annually of sulfur, coal, coke, waste coal, and waste ash. In addition, Savage provides on-site operations and management services for large power plants and oil refiners. Savage has over 140 operations in 35 U.S. states and five Canadian provinces.

An 87 percent drop in income before taxes from CHS Inc.’s Ag Business segment for the fiscal year 2009 ending Aug. 31 was the pivotal factor in dropping company-wide net income by 55.5 percent. Ag Business earnings were down to $73.1 million on sales of $17.2 billion from 2008’s $568.3 million and $19.7 billion, respectively.

CHS said the performance varied widely in the Ag Business, which includes crop nutrients, grain marketing, and retail operations. CHS said a dramatic drop in crop nutrient prices, combined with weather-driven lower demand, resulted in significant losses due to reduced inventory values. Grain marketing and local retail operations both achieved strong performance due to continued global grain demand and successful use of market risk management tools.

CHS said that earnings from its wholesale crop nutrient business for the year were $235.8 million less than for FY 2008. The company took an inventory write-down during the year of $92 million, of which $8.6 million remained as of Aug. 31. In addition, reduced performance by Agriliance LLC, partially offset by a net gain on the sale of a Canadian agronomy equity investment, resulted in a $10.6 million net decrease in earnings from these investments, net of allocated internal expenses.

Wholesale crop nutrient revenues were $2 billion, down from the year-ago $2.7 billion. This $648.6 million decrease was due to $676.7 million attributable to decreased volumes, partially offset by $28.1 million due to increased average fertilizer selling prices during fiscal 2009 compared to fiscal 2008. This slightly favorable price variance was created by high-priced sales contracts with customers before the collapse in crop nutrient prices in the fall of 2008. The average sale price of all fertilizers sold reflected an increase of $6 per ton (1 percent) compared with fiscal 2008. However, volumes decreased 25 percent, mainly due to higher and volatile fertilizer prices and adverse weather conditions during the fall of 2008 that continued into the spring of 2009.

Retail crop nutrients, crop protection, seed, feed, and processed sunflowers products all saw increased revenues in fiscal 2009, with the revenues driven by incremental volumes sold through facilities acquired during the year.

Company-wide, FY 2009 net income was down 52.5 percent, to $381.4 million on sales of $25.7 billion, versus the year-ago $803 million and $32.2 billion. It was still the company’s fourth-highest earnings in its 80-year history. Fourth-quarter net income was off 33 percent, to $97.3 million on sales of $6.7 billion, versus the year-ago $145.4 million and $9.4 billion.

“Given the overall weak global economy and the extreme volatility many of our businesses experienced during fiscal 2009, we are very pleased with these results,” said John Johnson, CHS president and CEO. “Many of our businesses achieved near-record performance in 2009.” Earnings were led by the Energy segment, which saw strong refining margins and a growing retail presence. FY 2009 Energy earnings were $359.5 million, up from the year-ago $299.7 million.

During the fiscal year, CHS reflected a $74.3 million loss on its investment in VeraSun, an ethanol producer that declared bankruptcy in October 2008. The write-off eliminated the company’s remaining investment in VeraSun. A $71.7 million impairment in VeraSun had been reflected in fiscal 2008.

Based on 2009 earnings, CHS is expected to return about $220 million to owners in the form of patronage in fiscal 2010, the fourth-highest return in CHS history. In 2009, based on 2008 earnings, CHS paid record patronage of $347.2 million.

The U.S. House of Representatives on Nov. 6 passed the Chemical and Water Security Act of 2009 (HR 2868) by a vote of 230 to 193. The bill, identified during committee debate as the Chemical Facility Anti-Terrorism Act of 2009, included an Inherently Safer Technologies (IST) provision, which would require chemical facilities to assess the viability of switching to safer chemical alternatives. The IST provision remained in the final bill despite efforts by industry and certain lawmakers to strike the requirements during the committee and House floor votes (GM Oct. 26, p. 13).

A citizen suit provision, which would have allowed citizens to sue chemical companies and the Department of Homeland Security (DHS) for failure to enforce the act, was reportedly replaced with a petition process through which citizens may request the government to investigate a specific facility. Under the current bill, however, citizens may still sue the government for failing to implement the law.

The bill also grants the DHS secretary and the EPA administrator discretion to conceal facility compliance information should they deem that the information places the facility in danger.

The Fertilizer Institute (TFI) on Nov. 9 released a statement voicing its strong opposition to the legislation, which it said would impose “an increased regulatory burden” on U.S. agriculture. “The fertilizer industry considers homeland security to be a top priority and has a long-standing record of promoting safety and security of its products through their production, storage, transport and use,” said TFI President Ford B. West. “However, TFI objects to the provisions concerning Inherently Safer Technology (IST) included in the legislation. If the IST mandate and assessments as contained in this legislation are made law, they could well jeopardize the availability of widely used, lower-cost sources of essential plant nutrient products used by America’s farmers and ranchers.” Anhydrous ammonia and ammonium nitrate are normally cited as the fertilizer products most vulnerable to an IST provision.

The Agricultural Retailers Association (ARA) also criticized what it referred to as the “new and stringent security standards” contained in the bill. Like TFI, ARA honed in on the IST provision, which it said would “push agricultural facilities and other chemical facilities to substitute safer products and processes in an alleged attempt to increase security.” ARA charged that the sponsors of the legislation “used security as a pretext to advance radical environmental policies advocated by groups such as Greenpeace and other anti-chemical groups.”

ARA said it continues to support a straightforward reauthorization of the current Chemical Facility Anti-Terrorism Standards (CFATS), which were set to expire this fall after taking effect in 2007. “We are grateful to all House members that opposed HR 2868 since it will increase regulatory and insurance costs on agricultural facilities, jeopardize the availability of widely used low-cost sources of essential crop nutrient and crop protection products for farmers, and disrupt the cooperative relationship between DHS and industry to improve facility security,” ARA said.

The American Chemistry Council, while voicing support for the reworked citizen suit language and the provisions protecting sensitive facility information, said it also remains unable to endorse the bill “due primarily to concerns over the potential impact of the authority granted to DHS to mandate the implementation of IST.”

The bill will now go to the Senate, where the Senate Homeland Security Committee will most likely have primary jurisdiction of the legislation. Sens. Frank Lautenberg (D-N.J.) and Susan Collins (R-Maine) have both signaled their intentions to separately introduce chemical facility security legislation this session. “We don’t have to trade food security for chemical security, and TFI is optimistic that we can work with members of the Senate to craft chemical security legislation that takes into account our nation’s food production system,” said West. ARA said it, too, is eager to work with the Senate “on a more risk-based, tiered approach.”

Allana Resources Inc., Toronto, has completed its strategic investment with China Mineral United Management Ltd., a Chinese mining investment group closely associated with one of the largest fertilizer companies in China. The investment is by way of a private placement financing of common shares of the corporation for gross proceeds of $2 million through the issuance of 8 million common shares at a price of $.25 per common share. The net proceeds of the financing will be used to fund exploration and development of Allana’s potash project in Ethiopia and for general corporate and working capital purposes.

Allana has also agreed to negotiate an offtake/financing agreement with China Mineral in which China Mineral would acquire 20 percent of the project’s total potash production at a price discounted to the market price and equal to Allana’s full operating and shipping costs plus a profit margin for Allana. The potash pricing structure would continue until China Mineral completely covers its initial investment of construction costs. As consideration for the offtake/financing agreement, China Mineral would commit to finance 35 percent of the project’s required construction costs, which, based on current estimates, is US$280 million. Allana also believes that its strategic relationship with China Mineral will attract more debt financing as required.

“We are delighted to be forming a strategic relationship with China Mineral as this marks an important milestone in the development of our potash project,” said Allana President and CEO Farhad Abasov. “We believe that this approach will result in near-term value creation for Allana shareholders while at the same time, preserve long-term shareholder value going forward. China Mineral is a strong mining group and we were particularly impressed with the professionalism, enthusiasm and speed with which they pursued and concluded negotiations. We look forward to working with China Mineral in developing this outstanding potash project.”

Allana says its projects involve significant potash assets that are undervalued based on Allana’s current market capitalization, partially due to the financing risk associated with advancing the project to commercial operations.

Allana said in October that it has been receiving multiple unsolicited offers from various strategic counterparties to participate in the project. Financial analysts have also been discovering Allana, with two initiating coverage in November – Lowe, Ondaatje, McCutcheon Inc., and Dundee Capital Markets.

Allana’s project comprises three mineral concessions totaling 150 square kilometers in Ethiopia’s northeastern Danakil Depression. The concessions have an inferred resource estimate of 105.2 million mt of potash mineralization with a composite grade of 20.8 percent KC1 that is open along strike and to depth. Potash deposits there are unique due to their shallow depth and may be amenable to open pit or solution and solar evaporation. The project is some 100 km (approx. 62 miles) from the Red Sea Coast and the sea port of Mersa Fatma, Eritrea, and 600 km (approx. 373 miles) via road from the deep water port of Djibouti.