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ICL profits, sales up in 2010; exec salaries draw Knesset attention

Israel Chemicals Ltd. (ICL) reported increased revenues and net profits in 2010. Sales rose by 25 percent to $5.692 billion, compared to $4.554 billion in 2009. Net profits were up by 33 percent, to $1.073 billion from $809 million in the previous year.

In the fourth quarter, ICL sales reached $1.421 billion, compared to $1.227 billion in the corresponding quarter a year earlier. Net profits totaled $293 million, versus $213 million in the fourth quarter of 2009. The company noted that increased quantities of potash, fertilizers, and other products compensated for lower potash prices and the weak dollar during the final quarter of the year.

ICL said that it was the second-best year on record and the best fourth quarter ever. It noted that sales to Asia primarily to China and India rose last year by 46 percent, to $1.680 billion.

ICL Fertilizers, the company’s largest division, accounted for $3.1 billion, or 51.7 percent of total revenues in 2010, up from 45 percent in the 2009. The increase was due to a sharp rise in the quantities of potash, phosphate fertilizers, and phosphate rock, which compensated for lower potash prices. Potash accounted for 66 percent of revenues. Potash revenues in 2010 totaled $2.141 billion, compared to $1.429 billion in 2009 and $2.7 billion in 2008. Fertilizer and rock sales totaled $1.056 billion, compared to $787.7 million in 2009 and $1.681 billion in 2008.

ICL Fertilizers sales to Asia rose by 46 percent to $1.102 billion, and to Latin American by 17 percent to $517 million. Asia (primarily India and China) accounted for 38 percent of total sales of ICL Fertilizers, with Europe 31 percent and South America 18 percent.

Potash production in 2010 totaled 4.251 million mt, compared to 4.109 million mt in 2009. Sales were 5.558 million mt, versus 2.709 million mt in 2009. Inventory dropped sharply, from 2.917 million mt in 2009 to 1.610 million mt in 2010. ICL said that the strike at Dead Sea Works in the first quarter of 2011 led to 450,000 mt of lost production at Sdom, but that the high level of inventories would enable the company to meet all commitments.

ICL said it is currently in the process of expanding the capacity of its Sdom operations by 500,000 mt/y. The additional capacity is due to come online by the end of 2014. This will raise total potash capacity to 6.5 million mt at its facilities in Israel, Spain, and England. ICL is also considering shutting down one of its two production facilities in Spain, and offsetting this by increasing production at the remaining facility.

ICL Fertilizers reported that it produced 3.135 million mt of phosphate rock in 2010, compared to 2.697 million in the previous year. Rock sales rose marginally, to 636,000 mt compared to 610,000 mt the previous year. Fertilizer production rose to 1.688 million mt, compared to 917,000 mt the year before. Fertilizer sales were up sharply, to 1.735 million mt from 1.061 million in 2009.

Meanwhile, Knesset Member Sheli Yechimovitz of Labor sharply criticized ICL for what she termed the outrageous salaries paid to its top officials. In its annual report ICL said that CEO Akiva Mozes received $5 million in compensation in 2010. Yechimovitz said that the salaries paid to the top management were indecent in light of the pressure put to bear on the Knesset Finance Committee last year to grant the company huge corporate tax breaks, arguing that at regular rates the company and its work force would be hurt. She added that ICL cannot pay its top management such huge salaries and at the same time pay such low royalties on natural resources that belong to the citizens of Israel.

Green Markets webinar focuses on DEF

The diesel exhaust fluid (DEF) market took center stage March 30 as three experts discussed the state of the industry at the Green Markets Diesel Exhaust Fluid Market: Opportunities and Challenges Ahead webinar. The event allowed registrants to listen via telephone or computer as the speakers presented up-to-date DEF information, augmented with numerous slides and graphs, and then answered questions at the event’s conclusion.

Speakers included Chad Dombroski, director of Yara North America Inc.’s Air1 division; Dave Michael, general manager of Mansfield Oil’s DeliveryONE national distribution system; and Tim Cheyne, director of emissions control at Integer Research. An interactive poll at the start of the event confirmed that 42% of listeners were either producers or marketers of DEF.

Dombroski said DEF demand in the U.S. will increase thirty-fold by 2015, with market demand reaching 1.2 billion gallons by 2020. He said DEF is a very competitive market, with more than 20 brands currently available.

Dombroski said the market faces a number of challenges, however, including the risk of contamination that hampers selective catalytic reduction (SCR) performance; effective distribution in North America; and infrastructure investments, which will require hundreds of millions of dollars for production and packaging plants, as well as distribution assets such as railcars, stainless steel trailers, and bulk storage tanks.

Michael discussed Mansfield Oil’s distribution system for DEF through their 170-plus warehouse stocking locations, which currently operate in 49 states in the U.S. He said a closed-loop delivery system is standard practice for Air1 and DeliveryONE, and is critical in maintaining purity throughout the DEF supply chain. Michael said experience with DEF distribution in Europe over the past 5 five years shows most contamination occurs in the field due to improperly sealed dispensing systems.

Michael also detailed the logistical obstacles to the DEF market in North America, including the need for stainless steel trailers; the cost of freight movement; maintaining quality control in transit; dedicated carrier capacity; and the lack of standardization in coupling componentry.

Cheyne compared European demand for DEF with expectations for the N American market. He said totes and drums are expected to be the most important delivery format for DEF in N. America at first, with truck stops and larger mini bulk/bulk dispensers growing in importance; the technology will likely see faster adaptation in agricultural markets for non-road mobile machinery.

He also detailed projected DEF demand in China and Brazil, noting that 1.5 million mt of urea will be used in the China DEF market by 2017.

Cheyne said DEF consumption worldwide will reach 10 million tons by 2020 according to low-side scenarios, while high-side projections show consumption potentially reaching nearly 25 million tons by 2020.

A CD audio recording of the webinar is available for $199. To order, visit http://greenmarkets.pf.com/DEFwebinar/#order. Recordings of other Green Markets audio conferences are available at “Related Products”, http://greenmarkets.pf.com.

Kugler announces new production facility

McCook, Neb.-Kugler Co., a family-owned manufacturer of fertilizer products for agriculture and turf care, has announced the establishment of a production facility in Rapid City, South Dakota. Kugler says the facility will focus on foliar and low-salt products such as KQ-XRN® 28-0-0 slow release nitrogen, which is in high demand due to its documented impact on yield and its unique adhesive qualities, making it the Perfect Delivery System for crop protection chemicals. In addition to a line of high-quality agricultural and turf fertilizers, the plant also has the capacity to manufacture products for industrial use. When operating at full capacity, the Rapid City plant will employ up to five people. The plant will not only increase the company’s manufacturing capacity, but will also enable Kugler to better serve its growing agriculture and turf market in the northern plains. According to the company, demand for Kugler fertilizers is growing in South Dakota, North Dakota, Montana, and Minnesota. The facility will allow Kugler Co. to be even more responsive to its customers throughout the upper Great Plains. Kugler has developed proprietary manufacturing processes that distinguish its products in terms of quality, ease of application, handling, and performance in the field. Established in 1924, Kugler is a third-generation firm headquartered in McCook, Neb. The company has fertilizer manufacturing operations in Culbertson, Neb.; Sterling, Colo.; and Ulysses, Kan.

Prairie Creek installing new packaging system

Elwood, Ill.-Prairie Creek Terminal Services, Elwood, Ill., announced that its wholesale fertilizer and ice melt packaging division has contracted with Chantland Material Handling Solutions Co., Humbolt, Iowa, to manufacture a new automated robotic packaging system to feed both of Prairie Creek’s bagging lines. Bob Pound, vice president of operations for Prairie Creek, said the new equipment will be installed by late May 2011, and will take the company’s total bagging capacity from its current 22,000 tons/year to more than 50,000 tons/year. The proposed cost of the upgrade is more than $300,000. Prairie Creek Terminal Services operates in a seven-state area surrounding Illinois, custom blending fertilizer and ice melt products for resellers and national account chains in all types of landscaping, horticultural, ornamental, golf course, and garden trades. The company has a 14,000-ton UAN-32 liquid storage tank, and its fertilizer storage areas are serviced by the UP Railroad with two lines capable of unloading twenty-five car sidings for both liquid and dry fertilizer products. Prairie Creek Terminal Services has eight full-time employees and annual fertilizer volumes of 55,000 tons. The Prairie Creek family of seven different companies has total annual sales volumes of more than $300 million.

Flooding concerns continue as thaw accelerates

St Louis, Mo.-Spring-like weather conditions gave some areas the green light for field activities last week, but also contributed to flooding concerns as rivers continued to rise. The Mississippi River was at or near flood stage through most of northeastern Missouri in late March, and flood warnings were posted at numerous locations along the river from St. Louis to St. Paul, Minn. The National Weather Service reported that minor flooding had occurred in Missouri locations at Hannibal, Louisiana, and Clarksville. River levels at St. Paul were nearly a foot higher than its spring peak in 2010, but levels were about two feet lower than had originally been predicted for that location. In Iowa, the Mississippi was expected to top flood stage at midweek in Davenport. Earlier in the week, moderate flooding was reported along the Cedar River in Cedar Falls and Waterloo, Iowa. In Illinois, the Mississippi River in the Quad-Cities area rose above the 15-foot flood stage at Lock and Dam No. 15 last week, on its way to an expected crest of 15.9 feet on April 2. The National Weather Service said river levels there may steady or continue to slowly rise through the first week of April, depending on weather conditions. Elevated flood risks remained in effect for areas of eastern South Dakota along the James and Big Sioux Rivers. Levels on the James River in Gillispie, S.D., in late March were approaching the 25.33 feet record set in 2001, but officials said they expected it to crest just shy of that level. Local reports said small tributaries were open and running in the Red River Valley in late March, but the Red River itself remains capped by ice from its headwaters at Breckenridge, Minn., up to the Canadian border. Once the ice starts breaking up, officials say there is a 45 percent chance that near-record levels will be reached on portions of the river. The U.S. Weather Service says major flooding is likely for all locations on the main stream of the Red River in North Dakota and parts of Minnesota. Both Moorhead, Minn., and Fargo, N.D., were planning to distribute sandbags to critical neighborhoods late in the week. In the Western Canada market, the latest flood forecast released on March 25 said Manitoba will see significant flooding this spring, with flood potential remaining high for the Interlake Region and the Red, Assiniboine, Winnipeg, Souris, Pembina, Saskatchewan, and Fisher Rivers. Flood forecasters say even average weather conditions will lead to flooding equal to 2009 along the Red River in many areas of Manitoba, while unfavorable weather could produce flooding of 1997 record proportions.

Nationwide NH3 safety training tour announced

Washington-Transportation Community Awareness and Emergency Response (TRANSCAER), a voluntary nationwide outreach effort that helps communities prepare for and respond to hazardous material transportation incidents, has launched a nationwide Anhydrous Ammonia Training Tour to educate and train officials in 27 states on emergency response to anhydrous ammonia incidents. The tour focuses on a number of safety training topics, including sessions on ammonia properties, which cover both the physical and chemical properties of the chemical; what steps need to be taken to ensure ammonia is transported safely; hands-on training on how to use transport equipment properly; and information on emergency response necessary in case of an ammonia release. Another segment of the program covers the types of ammonia releases that could occur, and addresses indoor and outdoor release scenarios, defensive and offensive approaches to ammonia release incidences, flammability concerns, where and when to use water in dealing with an ammonia release, and control/containment measures. The Fertilizer Institute (TFI) is one of TRANSCAER’s sponsors, along with the American Chemistry Council, the Association of American Railroads, CHEMTREC®, The Chlorine Institute Inc., the National Tank Truck Carriers Inc., the Renewable Fuels Association, and the National Association of Chemical Distributors. “The Fertilizer Institute is pleased to play a role in the development of this valuable training program for emergency responders,” said Ford West, TFI president. “Anhydrous ammonia plays a key role in U.S. food production, and this national initiative provides an excellent venue for amplifying our industry’s messages about the principles of safe ammonia handling and transportation.” The target audience for the tour events includes emergency responders, agricultural businesses, ammonia industry personnel, emergency management officials, public safety representatives, law enforcement agencies, and others involved in the transportation of anhydrous ammonia. The tour focuses on regions of the country where ammonia use in agriculture applications is prevalent. A listing of cities and states where the tour is taking place is available at www.TRANSCAER.com/events. More locations will be added throughout the year. In addition, training documents and videos will be available online at www.transcaer.com/aa-tour. “Effective emergency response begins with planning and preparation,” said Rollie Shook, chair of the National TRANSCAER Task Group and leader of emergency services and security for Dow Chemical Co. “Since anhydrous ammonia plays a large part in the agricultural, manufacturing, industrial, commercial, and transportation industries, emergency responders need the appropriate knowledge and skills to ensure protection of public health and the environment in the case of an accidental release incident.”

New load-outs completed at Agrium NH3 terminal

Marseilles, Ill.-Agrium Inc. announced in late March that new load-outs under construction since last fall at its Marseilles, Ill., ammonia terminal are now ready for use. The company issued a notice on March 29 alerting customers to certain changes in rules and policies for ammonia loading as a result. One of the biggest changes, Agrium said, is that drivers will now be responsible for connecting/disconnecting to the loading racks, while operators will continue controlling the starting/stopping of pumps and metering. Agrium said Marseilles staff plans to train and provide oversight for each driver three times “before turning them loose on their own. We are still evaluating the best way to address this and it will likely be a card that we punch after each training session or a roster where we track drivers and the number of times they have been trained,” the notice said. Another change, Agrium reported, is to the Personal Protective Equipment (PPE) requirements. The minimum PPE requirements for a driver to load ammonia at Marseilles now include long sleeved shirt and pants, hard hat, chemical gloves, chemical goggles, face shield, and leather boots. In addition, Agrium said the use of chemical aprons and respirators is also encouraged. “All drivers should have the required PPE with them prior to coming on-site,” the notice said. “We are expecting a busy spring season and will not be able to loan out equipment to those who don’t have it. The operators will strictly enforce the PPE requirements and will not make exceptions.” Agrium noted as well that it is discontinuing the use of hammers at the site, and has purchased several spanner wrenches and O-rings to be used in place of hammers. The Transportation Worker Identification Credential (TWIC) cards and the security passes at the site are unchanged. Agrium said the Marseilles terminal “is very interested in feedback as the season progresses,” and the company will track suggestions/comments and look for opportunities for improvement. The company said it is also making available photos of the new load-outs and scheduling site visits for drivers who are interested. Inquiries can be made to Bryce Currie, terminal supervisor.

RFA defends ethanol in wake of USDA reports

Washington-The Renewable Fuels Association (RFA) on March 31 weighed in on the USDA’s 2011 Prospective Plantings report. RFA noted that in the past 20 years, the prospective corn acreage estimate has varied from the final acreage estimate by an average of 1.14 million acres, with acreage estimates falling below the actual acreage eight times, and above 12 times. RFA Vice President Geoff Cooper said 2011 ethanol production is expected at 13.8-14 billion gallons, using about 5 billion bushels of corn. He noted that the ethanol industry’s share of U.S. corn supply is regularly overstated at 40 percent, when on a net basis ethanol will actually use only 23 percent of the 2010/11 corn supply, with the remaining 77 percent going to the feed and food markets. In response to the food versus fuel debate and concerns about rising food costs, RFA stated that corn is a minor cost component of most retail food items. RFA said a 50 percent increase in the corn farm price would be expected to raise the price of a box of corn flakes by just $0.02 per box, or about 0.5 percent of the total retail price, assuming no other cost increases. For products like meat and dairy where corn is a more important component, RFA said expected retail cost increases resulting from a 50 percent increase in the corn farm price are slight at just 2-3 percent of total retail cost. RFA also said just 12 cents of every retail food dollar pays for farm goods/raw ingredients; that U.S. corn exports have not declined as ethanol use has expanded; that U.S. ethanol uses just 3 percent of the world grain supply; and that grain is not being “diverted” for fuel use. On March 30, RFA called on President Obama to continue working with the ethanol industry and Congress to reshape ethanol tax policy while helping the sector expand and evolve. “The ethanol industry has stepped up to the plate and said we’re willing to reform our tax incentives so we can reduce costs,” said Bob Dinneen, RFA president and CEO. “I hope we’re looking more deeply at what we want our energy future to be. I hope we’re looking at all energy tax incentives – do we still need to be subsidizing petroleum, for example?”

Toyo picked for Indonesian N complex

Tokyo-Toyo Engineering Corp. and PT Inti Karya Persada Teknik have jointly received a notice of bidding award for a fertilizer project from the state-owned Indonesian fertilizer company PT Pupuk Kalimantan Timur (Kaltim). The plant will be constructed in Bontang, East Kalimantan, Indonesia. The contract is for engineering, procurement, and construction (EPC) services on a lump-sum turnkey basis. As Kaltim currently operates four plants in Indonesia, the new plant will be their fifth in that country. With a production capacity of 2,700 mt/d of ammonia and 3,500 mt/d of urea plus utilities facilities, the new plant is in the largest class in the world. The bidding started in September 2010. A total of five groups from Europe, Korea, and Japan bid for the project, with Toyo’s group overcoming the competition to receive the order. Toyo says the new plant will be the 100th urea plant using Toyo’s proprietary ACES21® urea synthesis technology and urea granulation technology that the company has built in areas spanning the globe.

Deepak eyes Aussie TAN plant

Mumbai-Deepak Fertilisers and Petrochemicals Corp. Ltd. (DFPCL) said March 30 that it is proposing to set up a 300,000 mt/y technical grade ammonium nitrate (TAN) plant in South Australia (SA). It would provide TAN to the local end users. DFPCL said the SA government has identified a site for the project and that it will undergo a feasibility study. The company said that the study, an environmental impact assessment, and other statutory clearances should take 12-15 months, with another 24 months needed for construction. The estimated cost is US$350 million. DFPCL says the project would give it a global footprint, adding that the company has two decades of experience making and marketing TAN in India. According to the Australian press, the proposed TAN site is at Port Boynthon. The project has already quickly drawn the opposition of local environmentalists concerned over its impact on the giant Australian cuttlefish.