Tel Aviv-The country’s Antitrust Authority is now looking into the potash pricing dispute between buyer Haifa Chemicals and supplier ICL Fertilizers (GM April 27, p. 12), according to the Israeli press. Israel’s Ministry of Industry, Trade and Labor is also reportedly reviewing potash prices.
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Three injured at CF complex
Deerfield, Ill.-CF Industries Holdings Inc. reported April 27 that its Plant City, Florida, Phosphate Complex experienced an accident resulting in three non-life-threatening injuries to contract employees when a steel plate they were working on fell approximately eight feet. “Unfortunately, we had injuries to three contract employees, but the injuries appear to be non-life-threatening,” said Herschel Morris, vice president, Phosphate Operations. “Those employees are receiving appropriate treatment for their injuries at local area hospitals, and we offer our thoughts and prayers to them and their families for a quick recovery.” Morris went on to note that there were no reports of injuries or other impacts outside the facility, no chemicals were released, and there were no environmental impacts. He explained that the situation was quickly resolved by facility personnel. At the same time, appropriate state and local emergency response officials were notified of the incident, and they provided back-up to facility emergency responders. The incident was also reported immediately to local and state regulatory authorities. Facility officials would not speculate as to the cause of the incident, which took place while the equipment they were working on was shut down. An investigation began immediately to determine what happened. “Our concern right now is for the recovery of our contract employees who were injured,” commented Morris, adding that, “We are going to give to them and their families the support they need to hasten their return to good health.” On April 30, CF told Green Markets that one of the three had been released from the hospital. The accident took place in a converter in a sulfuric acid plant, with no damage to the facility. CF had just reported on April 23 that it had zero lost-time accidents (LTA) at its facilities during the first quarter ending March 31, 2009. It also noted that its Donaldsonville, La., Nitrogen Complex reached 3.7 million safe work hours (nearly 6.5 years) without an LTA. The Medicine Hat, Alberta, Nitrogen Complex had gone 20 months without an LTA, which ended in April with a minor accident. CF’s St. Louis Warehouse achieved 10,000 consecutive days – or more than 27 years – without an LTA.
Viterra confirms talks with ABB Grain
Regina-Canadian agribusiness Viterra Inc. has confirmed reports that it is in discussions regarding a possible strategic transaction with ABB Grain Ltd., a leading Australian agribusiness. Viterra said these discussions are ongoing, and the parties are engaged in continuing negotiations and due diligence activities. No transaction has been agreed to at this time, the current discussions are non-binding, and no assurance can be given that any agreement on a transaction will be reached. While both Viterra and ABB are major grain companies, they are also involved in fertilizer and other ag inputs.
Yara 1Q sales down, sales volumes off 22 percent
Oslo-Yara International ASA reported net income of US$131.7 million ($.45 per share) on sales of $2.5 billion for the first quarter ending March 31, 2009, versus the year-ago $535.2 million ($1.81 per share) and $3.9 billion, respectively. First-quarter EBITDA and operating income were $297.2 million and $174.5 million, versus the year-ago $751.0 million and $538.6 million, respectively. “Yara’s first quarter fertilizer sales were up significantly from the fourth quarter, and the pace of sales increased during the quarter,” said Jorgen Ole Haslestad, Yara president and CEO. “By the end of the quarter deliveries were running closer to last year and Yara defended its market share in Europe, even as imports increased. Our strong cash flow generation is the result of competing well for deliveries to customers, cutting production and thereby reducing inventories.” Yara fertilizer sales were 4.88 million mt in the quarter, down from the year-ago 6.3 million mt. Total volumes sold were 5.76 million mt, down from 7.25 million mt. Ammonia production was 1.4 million mt, down from 1.75 million mt. Total production was 5.16 million mt, down from 6.24 million mt. Yara predicted that a drop in use will lead to renewed demand, citing USDA estimates that corn production will be down 14 percent in Brazil and 39 percent in Argentina. Yara said there is no drop in food consumption to counter-balance the production cuts. In the meantime, Yara is benefiting from lower energy costs, its third party sourcing is minimized, and it is halving NPK production in the second quarter.
Prices help offset big drop in Compass SOP sales
Overland Park, Kan.-Potassium sulfate prices helped Compass Minerals achieve a first-quarter earnings record for its specialty fertilizer segment, offsetting a 70 percent drop in fertilizer sales volumes during the first quarter ending March 31, 2009. Fertilizer operating earnings were $26.8 million on sales of $38.2 million (37,000 st volumes), versus the year-ago $17.1 million and $47.7 million (123,000 st volumes). The first quarter average sales price was $1,020/st, versus the year-ago $388/st. “We believe many of our customers will continue to draw down their existing inventories and delay or forgo sulfate of potash purchases until sentiment improves in the global agriculture industry,” said Dr. Angelo Brisimitzakis, Compass Minerals president and CEO. “However, the long-term fundamentals of the sulfate of potash business remain compelling.” He said growers will be called upon to produce more and more nutritious fruit and vegetables and will need SOP to improve productivity. He said SOP prices should continue to be well above year-ago levels, and that he expects the second half to be stronger than the first half. While a milder-than-normal winter impacted salt sales, the unit also posted higher operating earnings. Compass-wide net earnings were $61.6 million ($1.85 per diluted share) on sales of $309.1 million, versus the year-ago $49.1 million ($1.48 per share) and $380.0 million, respectively.
Prices, potash help SQM 1Q income move up
Santiago-Sociedad Quimica y Minera de Chile SA (SQM) reported a 33 percent increase in net income for the first quarter ending March 31, 2009, to $86.3 million ($.33 per ADR) on sales of $320.9 million, compared to the year-ago $64.8 million ($.25 per ADR) and $326.3 million, respectively. Operating income was $119.5 million, versus the year-ago $86.2 million. “Considering the current global economy and the difficult circumstances of world markets in general, the increase in our quarterly operating income and net income is very good news,” said Patricio Contesse, SQM CEO. “The company’s different business lines prevent us from depending on a single product or market and provide us with diversified sources of revenue that allow us to deliver higher operating margins. Higher sales prices during the first quarter of the year compared to the same period of the previous year, combined with lower operating costs, have allowed us to offset the lower sales volumes in our SPN (specialty plant nutrition), iodine and lithium businesses, which have in general followed the downward trend, observed in different sectors of the economy during recent times. As anticipated, higher production levels of potassium chloride have translated into significantly higher sales volumes and have positively impacted our margins. We remain confident that the fertilizer and industrial markets that use our products should recover by the second semester, increasing results in the second half of the year compared to the first half of this year.” SQM noted that SPN sales were down during the quarter to $145.7 million from the year-ago $170.5 million; however, the company was able to expand its potassium chloride sales by 366 percent to $72.1 million, up from the year-ago $15.5 million. SQM said year-ago sales in this segment were mainly in Chile, and the company has since moved into other markets.
Scotts 2Q net income up 33 percent
Marysville, Ohio-The Scotts Miracle-Gro Co. reported a 33 percent increase in net income for the second quarter ending March 28, 2009, to $77.4 million ($1.18 per diluted share) on sales of $960.1 million, versus the year-ago $58 million ($.88 per share) and $958.0 million. While overall sales were about flat, those for Scotts’s largest unit, global consumer, were up 4 percent. “In the face of a deteriorating economy, the lawn and garden category continues to show its resiliency, and we continue to see the power of our brands,” said Jim Hagedorn, Scotts president and CEO. “The strong level of consumer demand in the category now gives us confidence that adjusted earnings will be in the upper half of our guidance of $2.10-$2.30 per share. While it’s still early, we could see upside to our projections if current trends in the core business continue throughout the balance of the lawn and garden season. The results so far in April are encouraging, as the past two weeks have each resulted in record levels of consumer purchases of our products at our major retail partners in the U.S.” Six-month net income was $20.4 million ($.31 per share) on sales of $1.28 billion, up from the year-ago $1.2 million ($.02 per share) and $1.27 billion.
PotashCorp offering $1 B in notes
Saskatoon-PotashCorp on April 28 announced that it has priced an offering of US$500 million aggregate principal amount of 5.25 percent notes due May 15, 2014, and US$500 million aggregate principal amount of 6.5 percent notes due May 15, 2019. PotashCorp intends to use the net proceeds from the offering to repay outstanding indebtedness under its revolving credit facilities and for general corporate purposes. The offering is expected to close on May 1, 2009, subject to customary closing conditions.
Mosaic declares dividend
Plymouth, Minn.-The Mosaic Co. said on April 27 that its board of directors declared a quarterly dividend of $0.05 per share on the company’s common stock. The dividend will be paid on May 21, 2009, to stockholders of record as of the close of business on May 7, 2009.
EPA, state to do testing of suspect sludge
Cameron, Mo.-The U.S. Environmental Protection Agency and state investigators will be doing testing to help determine the validity of claims that fertilizer produced from wastes at a tanning company contained high levels of hexavalent chromium in an area with a high incidence of brain tumors. The fertilizer, provided to farmers in at least four counties for free for years from Prime Tanning Corp. in St. Joseph, is the object of a suit filed against Prime Tanning and National Beef Leathers, its present owner. Kansas City-based National Beef Packing Co. acquired the Prime Tanning property in St. Joseph and renamed it National Beef Leathers in March of this year. Spokesman Keith Welty said that the due diligence performed prior to the acquisition did not indicate any irregularities with the application of sludge as fertilizer. “National Beef takes this matter very seriously. We care deeply about the health and safety of all the employees of National Beef as well as everyone that lives in the surrounding communities,” Welty stated. As such, he added, “National Beef is currently conducting a thorough review of this matter and in an abundance of caution has suspended land application of sludge pending the outcome of its investigation.” Prime Tanning also issued a statement saying that “based on our preliminary investigation we believe there is no basis for the claims made in the litigation. Applying the nutrients produced as a by-product of tanning as fertilizer to agricultural land is an environmentally responsible practice that is done in accordance with all Missouri laws and regulations. We look forward to cooperating fully with state and federal agencies in their review and investigation.” Meanwhile, EPA and the Missouri Dept. of Natural Resources plan to do testing of their own. EPA Region 7 reportedly was developing plans to sample the soil and some wells on farms that received the sludge, and also has asked the plaintiffs’ law firm to provide the samples it alleges contained chromium 6. The lawsuit was filed April 22 in Clinton County Circuit Court by the Kansas City law firm of Wagstaff & Cartmell.