Minneapolis-Cargill Inc. on Oct. 13 reported net earnings of $525 million in the fiscal 2010 first quarter ended Aug. 31, down 65 percent from last year’s record $1.49 billion in the same period a year ago. The reduction included a sizable decline in earnings from Cargill’s majority investment in The Mosaic Co. (GM Oct. 12, p. 1). “Cargill posted a solid quarter, notwithstanding the comparison to last year’s all-time record,” said Greg Page, Cargill chairman and CEO. “Our business unit earnings were broad based, and they were up considerably from the final two quarters of fiscal 2009. We’ve stayed focused on delivering solutions to customers, which drives the continuing investment in our people, facilities, technologies and innovation. All of this makes us optimistic about Cargill’s ability to grow and to help our customers succeed in this still-fragile world economy.” Among Cargill’s five business segments, earnings in agriculture services and in food ingredients and applications were up from last year’s first quarter, due in part to lower raw material costs, reduced operating costs, and changes to product mix. Risk management and financial results rose significantly, reflecting a return to profitability by its financial investment subsidiaries and good performance among the energy businesses. Origination and processing earnings were solid, though down from last year’s record performance. Earnings in the industrial segment, which includes Cargill’s majority investment in Mosaic, declined substantially from the year-ago level. Cargill announced the opening of three new facilities in the first quarter: a glycerin refinery next to its biodiesel plant in Frankfurt, Germany; a feed mill that processes co-products from adjacent Cargill facilities in Efremov, Russia; and a specialty canola research and production center in Aberdeen, Sask. The center complements the recent doubling of processing capacity at Cargill’s canola crush plant in Clavet, Sask., and the upgrade of its canola seed facility in Idaho Falls, Idaho.
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Canada fertilizer plot kingpin pleads guilty
Ottawa-Zakaria Amara, the 23-year-old Canadian considered the mastermind of the Toronto 18 plot to explode fertilizer bombs in downtown Toronto, has entered an unexpected guilty plea to two counts of terrorism after maintaining a not-guilty plea for three years. Amara faces the prospect of life in prison. The Ontario Public Prosecution Service disclosed that the plea was entered Oct. 8 to one count of participating in or contributing to a terrorist group to carry out a terrorist activity and one count of committing an indictable offense in association with a terrorist group, namely with the intent to cause an explosion that would likely cause serious bodily harm or death or serious property damage. Amara has been in custody since his arrest on June 2, 2006. Canadians consider Amara, at the time of his arrest a 20-year-old gas station attendant and married father, the prime actor in the bomb plot. Federal agents hired an undercover agent at an unprecedented expense ?Çô $4 million ?Çô to gather evidence in the probe. Before the roundups in June 2006, police infiltrated the plot and engineered a “sting” operation ?Çô the shipment of three tons of fake ammonium-nitrate fertilizer that suspects hoped to make into bombs. The Public Prosecution Service also announced plans to appeal the sentencing of Saad Khalid, who was given seven years last month for his connection with the Toronto 18. Khalid, 23, supposedly never knew of the full intentions of the plot, but was directed to acquire fertilizer and start building bombs.
No explosion at Omni Agri plant in Texas
Cactus, Tex.-Reports of a fertilizer tank explosion at the Omni Agri Trade Group plant here were greatly exaggerated (GM Oct. 12, p. 11), according to Mark Moore, Omni Group owner and CEO. “It actually amounted to a very small fire of what was probably fertilizer residue in a tank that had not been in use for some time,” Moore told Green Markets. “As near as we can tell it was an exothermic reaction. But it remains somewhat of a mystery that we are investigating.” Still, reports of an explosion came out in the local press, which actually never visited the site. Moore said state environmental inspectors did visit the plant to take a look at the liquid urea storage tank. They found nothing to be concerned about or even to report, so they left. Moore said the tank involved was actually a 1,000 gallon fiberglass structure, which he believed was the big part of the problem. The fiberglass started to burn when the residue in the bottom heated up from some type of internal combustion. He said the fiberglass mostly smoldered, but there was never much in the way of flames. The result was a small hole in the bottom of the tank and lots of smoke, Moore noted. He said the tank was part of the property acquired from North Plains Fertilizer and Chemical LLC in December 2007, after most of the buildings and equipment had been destroyed in a tornado. The site of the fire is next to two other facilities: Omni Agri’s wholesale dry fertilizer blending plant, which they rebuilt upon acquisition, and its sulfur bentonite manufacturing plant across the street. The blending plant is where Omni Agri produces its Greensun line of degradable sulfur fertilizers and micronutrients.
MBH Trucking fined for 920-lb ammonia release
Chicago-U.S. Environmental Protection Agency Region 5 recently settled for a civil penalty of $42,137, plus another $22,500 for training, in a case against MBH Trucking LLC, Webberville, Mich., for failure to provide required reporting on a 920 pound anhydrous ammonia release. EPA reports that an MBH truck driver failed to provide immediate notification to the National Response Center and state and local emergency response commissions of the release while making a delivery to a farm. Releases of anhydrous ammonia greater than 100 pounds must be immediately reported. MBH also failed to provide state and local authorities with chemical information about the diesel fuel that was onsite at the company’s transport facility. The diesel fuel has been removed from the site. The training will be provided to the trucking and agricultural industries in Michigan.
Stakeouts nab six anhydrous thieves
Keenes and Harrisburg, Ill., and Winfield, Kan.-Stakeouts at farm input locations in Illinois and Kansas, one of which resulted in a highway smashup and another in a deputy firing a shot while chasing two suspects, have resulted in the arrests of six persons for theft or attempted theft of anhydrous ammonia. The stakeout at George Smith Ag Service near Keenes, Ill., late on Oct. 9 led to a high-speed chase by a Wayne County sheriff’s deputy. The pursuit ended when the suspect crashed his car into a police cruiser at a roadblock. The Salem man is now in jail on preliminary charges of anhydrous ammonia tampering and aggravated fleeing and eluding. In Harrisburg, Ill., a Saline County deputy is on administrative leave after firing his gun while chasing a couple fleeing an aborted anhydrous ammonia theft. Officers on the stakeout at a farm input store near Eldorado said the two tried to get away after deputies confronted them. Both are now in the Saline County jail. An ongoing investigation at the Hackney branch of Valley Co-op, Winfield, Kan., resulted in the arrest of two men and a woman for theft, transporting anhydrous ammonia in an unauthorized container, possession of drug-manufacturing paraphernalia, and conspiracy to manufacture methamphetamine. They were nabbed late on Oct. 9 by a sheriff’s deputy and a highway patrol trooper after fleeing the co-op, where they tapped an ammonia nurse tank. Sheriff Don Read said that his office has been monitoring the co-op for some time with the assistance of the highway patrol, the Kansas Bureau of Investigations, and the Cowley County Drug Task Force.
Sandwell to acquire MBAC
Vancouver-Sandwell Mining Ltd. has agreed to acquire all of the issued and outstanding shares of MBAC Opportunities & Financing Inc. MBAC is a private Canadian company that is focused on becoming a significant integrated producer of phosphate and potash fertilizer in the Brazilian market. MBAC will be a wholly-owned subsidiary of Sandwell. Following completion of the transaction, Sandwell intends to change its name to MBAC Fertilizer Corp. Concurrent with the closing of the transaction, current Sandwell management and directors Edward Farrauto, Blair Murdoch, and Ryan King will resign from the board and as officers. The new board will consist of up to eight directors, each of which will be a nominee of MBAC. The new senior management team will consist of Antenor Silva, president and CEO; Anthony Cina, vice president, finance and CFO; Carlos Braga, vice president, operations; Luiz Bizzi, vice president, exploration; and Steve Burleton, vice president, corporate development. In October 2008, MBAC indirectly acquired all of the quotas of Itafos Mineracao Ltda, which holds a 100 percent interest in the Itafos phosphate mine and related infrastructure (Campos Belos Project), for approximately US$35 million, paid in cash and shares of MBAC. MBAC has also recently expanded its property portfolio in Brazil with the acquisition of two potash exploration projects and one additional phosphate exploration project. MBAC is continuing to search for additional fertilizer opportunities in the Brazilian and other Latin American markets. In 2007 and 2008, Itafos sold approximately 50,000 mt and 70,000 mt of phosphate rock, respectively. In order to maximize near-term cash flow, improvements are currently being made to increase the production of P2O5 to 100,000 mt/y of phosphate rock. Over the next couple of years, the mining of a lower grade ore (6 percent P2O5) will be concentrated to 29-30 percent P2O5 and used in the production of SSP. MBAC is evaluating the expansion of capacity of the facilities to 330,000 mt/y of phosphate concentrate, facilitating the production of approximately 550,000 mt/y of SSP for sale to local markets by the second half of 2012. MBAC expects to spend up to US$200 million over the next two years to upgrade the Campos Belos Project and build the required infrastructure needed to produce SSP. MBAC is targeting commercial production of SSP to begin in the first quarter of 2012, which is expected to significantly increase operating cash flows.
Westway acquires Cincinnati terminal
New Orleans-Westway Group Inc. said Oct. 16 that its wholly-owned subsidiary, Westway Terminal Cincinnati LLC, had completed the acquisition of the storage assets, contractual relationships, and property of Southside River-Rail Terminal Inc., located in Cincinnati, Ohio. The purchase price for this acquisition was approximately $20 million in cash. Southside River-Rail Terminal, Inc. has been one of the largest independent, full-service bulk liquid handling facilities in the Midwest. The facility does a significant amount of UAN business, according to a company source. The terminal is immediately west of downtown Cincinnati just off U.S. Route 50, between the Ohio River and CSX rail lines, with immediate access to I-75, I-71, and I-74. This facility is immediately adjacent to an existing Westway-owned liquid animal feed supplement operation, which will provide some synergies for both the terminal and feed operations. The acquired terminal handles barge, rail, and truck operations, and has over 35 million gallons of bulk liquid storage capacity, consisting of over 45 tanks designed to meet the specialized storage, handling, and transportation requirements of most types of liquid products. This terminal is located within 600 miles of 50 major metropolitan areas containing 53 percent of U.S. manufacturing and 54 percent of the U.S. population. “We are excited about the addition of Southside River-Rail to our portfolio, which brings Westway’s total storage capacity to over 350 million gallons,” said Wayne Driggers, Westway chief operating officer. “This acquisition continues Westway’s strategy of increasing its footprint in the U.S., and it further strengthens our overall global network to support the growing needs of our customer base. Additionally, we are well on track with our plans for expanding capacity over the next three year period.”
AGCO to pay over $20 M to resolve SEC violations
Washington-Major agricultural equipment manufacturer AGCO Corp., Duluth, Ga., has agreed to pay more than $20 million to settle charges brought by the U.S. Securities and Exchange Commission. The charges cite violations of the books and records and internal controls provisions of the Foreign Corrupt Practices Act (FCPA), alleging that certain subsidiaries made approximately $5.9 million in kickback payments related to their sales of humanitarian goods to Iraq under the United Nations Oil for Food Program. The violations pertained to sales of farm equipment between 2001-2003. “AGCO paid kickbacks to win business illegally, and attempted to hide them by creating a fictional account on their books,” said Cheryl Scarboro, associate director in the SEC’s Division of Enforcement. AGCO, without admitting or denying the allegations in the Commission’s complaint, consented to the entry of a final judgment permanently enjoining AGCO from future violations of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934 and ordering AGCO to disgorge $13.9 million in profits, plus $2 million in pre-judgment interest and a penalty of $2.4 million. AGCO will also pay a $1.6 million penalty pursuant to a deferred prosecution agreement with the U.S. Department of Justice, Fraud Section. In addition, AGCO will enter into a criminal disposition in which the Danish State Prosecutor for Serious Economic Crime will confiscate more than $600,000. The SEC considered remedial acts promptly undertaken by AGCO and the cooperation the company afforded the SEC staff in its investigation. To date, the SEC has brought 12 Oil for Food-related cases, with more than $150 million in monetary relief obtained.
Rentech raises $20 M in stock sale
Los Angeles-Rentech Inc. said Sept. 23 that it signed a definitive subscription agreement to sell to institutional investors an aggregate of 11,111,000 shares of its common stock at a price of $1.80 per share, for gross proceeds of approximately $20.0 million. The net proceeds of the financing will be used for general corporate purposes, including funding a portion of the development costs related to Rentech’s recently announced renewable synthetic fuels and power project in Rialto, Calif. The sale of the common stock was expected to close Sept. 28, 2009.
Ford touts new diesel pickup that uses DEF
Detroit-Diesel Exhaust Fluid (DEF) is not just for large freight trucks. Ford Motor Co. is touting its new 6.7-litre Power Stroke V-8 turbocharged diesel, which delivers a more than 80 percent reduction in nitrogen oxide levels from the aftertreatment system utilizing DEF injection. The engine debuts early next year in Ford’s revamped line of Super Duty pickups.