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Union objects to PotashCorp letter to employees, considers charge of bad faith bargaining

Featured, News

The United Steelworkers (USW) said Oct. 10 that it is considering filing a charge of bad faith bargaining under the Saskatchewan Trade Union Act against PotashCorp, following a direct communication sent to the homes of striking USW members at three of PotashCorp’s mines in Saskatchewan. Some 500 USW members have been striking at PotashCorp’s Allan, Cory, and Patience Lake facilities since Aug. 7.

“This is another attempt by the company to circumvent the bargaining process and try to influence our members. The content of the letter contains another pitch for the only offer made by the company, which was soundly rejected by our membership,” said USW Representative Lee Edwards.

“We believe PotashCorp’s actions are in violation of Saskatchewan law,” said Edwards. “Beyond the legality issue, the letter insinuates that our members are stupid and would have made a different decision if only they listened to the ‘wisdom’ of the company. It’s outrageous.”

PotashCorp acknowledged that it sent the letter; however, a company spokesman said it was not a violation of the act.

Edwards said the only way to resolve the dispute is to return to the bargaining table with an open mind and discuss the outstanding issues in a mature and intelligent way, instead of end-running the union and ignoring the bargaining process.

“The company is deliberately attempting to confuse and muddle the issues around the strike, while steadfastly refusing to talk to us. It’s just plain wrong.”

PotashCorp says it is willing to return to the bargaining table, but that it will not discuss the commodity-based bonus sought by the USW (GM Oct. 13, p. 11). It is willing to discuss less substantive issues. In addition, the company says that due to the global financial crisis, it can no longer assure that the current financial offer can remain on the table indefinitely.

Yara 3Q income doubles; company upbeat despite global financial turmoil

News

Yara International ASA reported third-quarter net income after minority interest of US$619.9 million (NOK 3,360 million) and earnings per share of $2.13 (NOK 11.55 per share), compared with $257.3 million (NOK 1,487 million) and $.88 per share (NOK 5.10 per share) last year. EBITDA for the quarter was $1.17 billion (NOK 6,345 million) compared with the year-ago $328.9 million (NOK 1,901 million). Third-quarter sales were $4.6 billion (NOK 25,000 million), versus the year-ago $2.2 billion (NOK 12,828 million).

“Yara delivered strong earnings in the third quarter, as higher fertilizer prices more than offset increased raw material costs,” says Jørgen Ole Haslestad, Yara president and CEO.

Yara cited a good start to the European season, and lower nitrate stocks. Downstream segment sales were in line with last year. Excluding the effect of the Kemira GrowHow acquisition, underlying sales volumes declined due to lower sales in Brazil and Southeast Asia. Fertilizer margins continued to expand as prices more than doubled for Yara’s main fertilizer products. Underlying earnings in the industrial segment were in line with last year as continued growth in technical ammonium nitrate for the mining industry and environmental products more than offset increased sourcing costs due to higher global nitrogen prices. The upstream segment benefited from increased fertilizer prices, more than compensating for energy costs, which increased less than previously guided due to a drop in spot natural gas prices.

Fertilizer tons sold were off slightly in the third quarter, to 4.74 million mt from the year-ago 4.76 million. Industrial tonnage of 1 million, up from 817,000 mt, helped boost overall company sales tonnage to 5.76 million mt, up from the year-ago 5.58 million mt. Fert tonnage was still up for the nine-month period at 17 million mt versus 15.2 million. Total nine-month tonnage was 20 million mt versus 17.5 million mt.

Yara said the long-term fundamentals for fertilizer demand remain strong, with grain inventories still at historical low levels. New fertilizer capacity continues to be delayed, and Yara’s energy costs will benefit from lower global energy prices. Going forward, Yara will benefit from the takeover of Saskferco effective Oct. 1.

“No industry can expect to be unaffected by the ongoing financial turmoil, and we are currently seeing a slow-down in some of our fertilizer deliveries following the credit crunch. However, since food demand is relatively inelastic to lower economic growth, fertilizer demand needs to rebound to avoid insufficient food supply. Yara’s business model, combining a unique distribution system and own production with third-party purchasing, gives us flexibility to handle demand volatility better than most,” said Haslestad.

Nine-month net income after minority interest was $1.95 billion (NOK 10,584 million), with EPS at $6.70 (NOK 36.32) on sales of $12.9 billion (NOK 69,818 million), versus the year-ago $690.8 million (NOK 3,993 million), EPS of $2.35 (NOK 13.60), and sales of $6.94 billion (NOK 40,097 million). Nine-month EBITDA was $3.1 billion (NOK 16,633 million), up from the year-ago $1.02 billion (NOK 5,910 million).

LSB to move to NYSE, gets Forbes nod

News Briefs, Southern Plains

Oklahoma City-LSB Industries Inc. said Oct. 14 that it has filed an application to list its common stock on the New York Stock Exchange and expects to begin trading on NYSE Oct. 28, 2008, under the symbol LXU. Until that time, shares will continue to trade on the NYSE Alternext US: LXU, the successor to the AMEX. “We are pleased to be making the move to the Big Board,” said Jack Golsen, LSB chairman and CEO. “We believe that our listing on the NYSE will broaden the visibility of the company.” On Oct. 15, LSB announced that it had been named one of “America’s 200 Best Small Companies” by Forbes magazine, ranking #27. To make the list, companies must have sales between $5-$750 million and a stock price of $5.00 as of Sept. 29, 2008. The ranking is based on return on equity, sales growth, and profit growth over the past 12 months, as well as over the past 5 years. Forbes also compared the candidates’ stock performance with that of their industry peers. The entire list appears in the Oct. 27, 2008 issue of Forbes.

Cargill reports Q1 earnings up 62 percent

News Briefs, Northern Plains

Minneapolis-Cargill Inc. reported net earnings of $1.49 billion for the first quarter ending Aug. 31, 2008, up 62 percent from the year-ago $917 million. Cargill said the results received a substantial boost from its investment in The Mosaic Co. “Cargill realized a strong start to our new fiscal year in a continuing environment of outsized volatility in agricultural and energy markets and severe turbulence in financial markets,” said Greg Page, Cargill chairman and CEO. “Our team’s attention to measuring and managing risk, and exercising fiscal discipline allowed the company to respond to supply-and-demand fundamentals in fast moving markets.” Among Cargill’s five business segments, it said the increase in first quarter earnings was led by the industrial segment, which reflected continued demand for crop nutrients in response to the world’s increased need for higher crop yields.

Simplot Partners adds organic fertilizer line

News Briefs, Northeast

Boston, Mass.-Converted Organics Inc. has announced the formation of a strategic relationship with Simplot Partners for the marketing of its all-natural liquid and granular fertilizers and liquid soil amendment product to the professional turf market throughout the western United States. Converted Organics President Edward J. Gildea said the agreement provides the opportunity to reach a large customer base of approximately 2,500 golf courses through “a well-established distributor known for providing high-quality products.” Simplot Partners General Manager John Maggiore said he expects Converted Organics’ products will be “very well received by our customers.” Converted Organics already supplies products to Simplot Grower Solutions, the agricultural division of J. R. Simplot Co.

Sinkhole continues to plague Silvinit

News Briefs, Russia

Moscow-A one-meter-wide crack is now spreading from the sinkhole near the rail line in Berezneki, again threatening Silvinit’s movement of potash out of the Perm Region, according to The Moscow Times. This time the crack is spreading toward the rail line. The most recent report had the sinkhole growing in the opposite direction. A company spokesman was quoted as saying the company was not panicking and shipments continue. A new rail line is expected to be in operation in fourth quarter 2009.

Questions raised at old Royster Clark site

Great Lakes, News Briefs

Madison, Wisc.-Concerns about soil contamination on the property may delay Agrium Inc.’s plans to demolish and sell the old Royster Clark fertilizer plant located on Madison’s east side, according to city officials. Agrium, which has no plans to locate at the site, closed the facility in the summer of 2005 and recently applied to the city for a demolition permit to help with the sale of the property. The 26.7 acres where Royster Clark manufactured fertilizer for more than 50 years has attracted interest from developers, and state officials have been coordinating such an effort since 2002. But Agrium’s permit application prompted warnings from the state that removal of the structure could expose nitrogen-contaminated soil to rain and snow, which could result in groundwater contamination. Alderman Larry Palm, whose district includes the property, told the local press he had been in favor of tearing down the building, but indicated that the soil problem “certainly changes some opinions that I have,” and that he would not support demolition if it led to further environmental problems. However, Dept. of Agriculture, Trade and Consumer Protection Hydrolist Richard Graham, who raised the question, said he would approve of the demolition if Agrium removed the building’s floor and any contaminated soil underneath. The city planning commission is expected to decide on the permit at its regular meeting on Nov. 3. In the meantime, Agrium spokeswoman Lisa Parker told Green Markets she didn’t know anything about the soil contamination, but said the company would work with city officials to address this question or any other issues. “We’ll get a better idea Nov. 3 about which direction we’ll be going,” Parker added.

N.M. residents file suit against Helena

News Briefs

Mesquite, N.M.-Helena Chemical Co.’s outreach efforts apparently haven’t reached everyone in the community where it operates a fertilizer storage and distribution warehouse. On the same day Helena opened its facility for plant tours and held a community information meeting, a news conference was held nearby to announce that nearly two dozen residents of Mesquite and nearby towns were suing the company for air and groundwater contamination. Helena officials explained that the tour, which was joined by an estimated 20 individuals, and the community meeting were held to dispel the notion that Helena operates a chemical manufacturing facility instead of warehousing and distributing agriculture products. At the gathering that followed in a local church, some 45 attendees were given results of independent air and water studies that show the plant is well within state and federal requirements. Louis Rodrigue, vice president of Helena’s southern business unit, who was on the scene for the two events, declined to discuss the pending litigation, but emphasized that the Mesquite facility is safe as shown by the two recently completed studies, which found that neither the community’s air or the drinking water has been impacted. “It’s important to note that while the New Mexico Environmental Department has recently alleged violations against Helena, we were not cited for exceeding the emission limits of our air quality permit,” Rodrigue stated. “We will continue our efforts to ensure the community has access to this information and intend to do all we can to dispel misinformation.” The suit, filed by 23 residents of Mesquite, LaMesa, and Las Cruces claiming personal injury and property damage, cites air quality violations, including release of hazardous dust, fumes, and other contaminants, and results from groundwater tests that showed nitrate, total dissolved solids, fluoride, and sulfate concentration in ground water in excess of state standards. “Specifically,” the suit claims, “nitrate has been tested at nearly four times the New Mexico State standard, fluoride at three times and TDS at twice the standard.”

Judge refuses to ban chicken litter use

News Briefs, Southern Plains

Oklahoma City, Okla.-Hundreds of farmers in northeast Oklahoma growing hay and grass for cattle feed are still cheering a recent federal court judge’s refusal to ban use of chicken litter for fertilizer. “They just wouldn’t have been able to fertilize at all because of higher costs,” Oklahoma Farm Bureau official Marla Peek told Green Markets. Jackie Cunningham, spokeswoman for the Poultry Community Council, added, “The injunction would have completely stopped the land application of poultry litter in the entire one million acre Illinois River watershed. The outcome recognizes what we have been saying that the science simply does not support claims against the hard working farmers.” Farmers in northwest Arkansas also are affected by this latest development in a suit by Oklahoma Atty. Gen. Drew Edmonson against 13 poultry companies, claiming contamination of the watershed. Edmondson is seeking restoration of the watershed and millions of dollars in court costs. The ruling Sept. 29 by Judge Gregory Frizzell of the U.S. Northern District Court of Oklahoma, however, served as a setback, asserting that “at this juncture in the action, the state has failed to meet the applicable standard of showing that the bacteria levels in the IRW can be traced to the application of poultry litter.” He maintained that the evidence indicated that “fecal bacteria come from a number of sources, including cattle manure and human waste from growing numbers of human septic systems.” Peek, OKFB’s director of regulatory affairs, said this maintains the status quo for farmers, who are already tightly regulated under state law, which prescribes both rate of application and amount of nutrient. Had the injunction been granted, she suggested, it might have paved the way for further restrictions on the use of manure and other organic fertilizer products.

Sask anhydrous spill routs 100 residents

News Briefs, Saskatchewan

Wilkie, Sask-Failure of a pump seal and valve is being blamed for an anhydrous ammonia tanker truck spilling nearly all of its load Monday afternoon Oct. 13 on the outskirts of Wilkie, forcing the evacuation of 100 or more residents. Wilkie Mayor Wally Lorenz told Green Markets that the tanker had just entered the town limits when the ammonia leak was noticed. He said the driver reported he was on his way to the Viterra grain and farm services about three miles west of Wilkie. Lorenz didn’t know how much ammonia had been released, but he said when emergency crews finished pumping it off “there was not a whole lot left.” Royal Canadian Mounted Police and the Wilkie fire department evacuated three streets in Wilkie’s southwest corner, and a portion of nearby Highway 14 was closed. Residents returned to their homes about 7:10 p.m. after the cloud of gas dissipated, but the highway remained closed for an hour and half while the site was cleaned up by a hazardous materials team, which was joined by a crew from Viterra. “It took until 2 a.m., but as far as I’m concerned the situation was handled very well,” the mayor commented. He said the truck was moved to a safe storage area, and there were no reports of injuries.