PotashCorp said Aug. 7 that unionized employees at its Allan, Cory, and Patience Lake potash operations commenced strike action, effective 5:30 p.m. (CST) Thursday, Aug. 7. The 487 striking employees are members of United Steelworkers’ (USW) Local 7689 at Allan, USW Local 7458 at Cory, and USW Local 189 at Patience Lake. They are responsible for underground mining operations, as well as milling and shipping activities on the surface. The strike action followed four days of mediation that was unable to resolve key contract issues, primarily centered on profit-sharing demands by the union. To date, PotashCorp said the union has refused to present the company’s final offer to its membership for a vote.

“While we are disappointed by the decision of union leadership to strike, we remain committed to operating with a long-term view,” said PotashCorp President and CEO Bill Doyle. “We will manage our assets responsibly and protect our future cost structure so that we remain competitive within the global arena. We have offered a top-end contract in the Saskatchewan market that will make our employees the highest-paid miners in the North American potash industry. We believe our offer rewards our workers’ important contributions, while protecting the future of our company for all stakeholders, including our employees.”

The bargaining units representing unionized employees at each facility provided strike notice to the company July 23, 2008, to which PotashCorp responded by immediately providing lockout notice. Provision of these notices enabled both sides to initiate strike action or lockout 48 hours after notices were served. Previous contracts expired April 30, 2008. PotashCorp says it has maintained continuous communication with the USW and the lines of communication remain open.

The Cory mine came back up from summer maintenance July 27 and Allan is due back up Aug. 10. Patience Lake, however, is down for maintenance through Oct. 4. Because of solution mining, Patience Lake can only produce during colder months – October-May.

PotashCorp said the three mines represent about 30 percent of its capacity. Production in 2007 at the three was .768 million mt KCL Cory, .257 million mt KCL Patience Lake, and 1.744 million mt KCL Allan. PotashCorp has invested C$1.11 billion for an expansion at Cory, due in 2012. Some C$210 million was spent to expand Allan in 2007; another C$350 million is being spent at the mine for an expansion to be completed in 2012. A C$110 million expansion at Patience Lake is slated to be complete by fourth quarter 2008.

PotashCorp says that over the three-year life of its proposed collective agreement, pay would increase to the workers by 27-35.6 percent. PotashCorp said the proposed journeyman’s earnings would go from $84,553 in 2007 to $113,160 in 2010.

For 2007, PotashCorp said the average earnings at the three mines for union hourly workers including is $72,665 at Patience Lake, $80,253 Cory, and $81,294 for Allan. Average hourly wages as of April 2008 at the three sites are $29.91, $28.91 and $29.17, respectively. Average overtime worked at the three in 2007 was 3.7 hours per week, 5.8 hours, and 6.5 hours, respectively.

Other features include an increased pension multiplier, enhanced contracting-out language, four hours of guaranteed, scheduled overtime under certain conditions, and for hourly workers increased shift premiums, clothing allowance, annual vacation bonus, and return-to-work bonus for weeks of layoff.

For more information, see www.PotashCorp.com.

Martin Midstream Partners LP (MMLP), Kilgore, Texas, reported net income of $4.3 million ($.25 per share) on sales of $308.1 million for the second quarter ending June 30, 2008, compared to the year-ago $5.9 million ($.41 per share) and $162.3 million, respectively. MMLP said the income decline was due to a $3.3 million non-cash derivative loss.

“Our overall business remains strong as we continue to benefit from our diversification,” said Ruben Martin, president and CEO of Martin Midstream GP LLC, the general partner of MMLP. “In our fourth segment, sulfur services, margins declined as expected due to pricing lags in certain contracts and a reduction in fertilizer volumes sold due to seasonality. Accordingly, we expect our third-quarter sulfur services margins to be substantially improved. For our other businesses, we expect continued improvement as organic growth projects come online through the end of the year and into the first half of 2009. We recently announced our seventh consecutive quarterly distribution increase, which represented a 12.1 percent increase over our distribution one year ago.”

MMLP six-month net income was $12.3 million ($.76 per share) on sales of $621.1 million, versus the year-ago $11.7 million ($.82 per share) on sales of $318.1 million.

Second-quarter sulfur services operating income was $2.94 million on revenues of $86.0 million, compared to the year-ago $1.86 million and $30.3 million. Second-quarter sulfur (molten and prilled) and fertilizer volumes were 289,800 lt versus the year-ago 355,200 lt. The sulfur services segment includes MMLP’s sulfur and fertilizer businesses.

MMLP told analysts it made a decision to defer some sulfur sales into the third quarter due to the anticipation that prices would go up in the third quarter – and they did, by $165/lt. Ruben Martin told analysts that sulfur and fertilizer prices may be near their peak, and that it boils down to managing inventories as things start back down and keeping them at minimum levels. He said most people are thinking prices will hold through the end of the year. Citing his experience in commodity markets, he said nobody is going to tell you what it’s going to do, but that managing inventories is a good option. “I think that it will actually be a positive for us if things come down or at least level off.”

Six-month sulfur services income was $10.05 million on sales of $156.2 million versus the year-ago $3.4 million and $59.7 million, respectively. Six-month sulfur and fertilizer volumes were 467,200 lt versus the year-ago 720,800 lt.

LSB Industries Inc. reported a 158 percent increase in operating profits in its chemical business for the second quarter ending June 30, 2008. Chemical operating profits were $20.5 million on sales of $113.4 million, compared to the year-ago $7.9 million and $79.4 million, respectively.

“While chemical business’s sales increased 43 percent due to significantly higher spot market prices for agricultural products, as well as higher selling prices for industrial acids and mining products related to increased raw material feedstock prices, operating income rose even more sharply, from $7.9 million to $20.5 million,” said Jack Golsen, LSB chairman and CEO. “Excluding the impact of $7.6 million (net of attorneys’ fees) from the previously noted litigation judgment, our chemical business’s operating income increased 63 percent to $12.9 million.” This involved the company’s successful lawsuit against Ingersoll Rand.

During the quarter, industrial acid sales were up 85 percent, ag products 17 percent, and mining products 43 percent. UAN tons were up 31 percent from a year ago, while UAN revenues were up 114 percent. LSB said UAN is its stronger gross profit product. Ammonium nitrate, which is a smaller market for LSB, saw volumes off 29 percent due to the cool, wet weather in the region served by the El Dorado, Ark., plant. However, AN revenues were down only 10 percent due to higher prices per ton.

LSB told analysts that it will continue to grow its non-seasonal industrial business, where it can more easily pass on higher raw material costs. It currently puts those sales at 60-65 percent and ag sales at 35-40 percent.

Six-month chemical income was $32.6 million on sales of $204.8 million, versus the year-ago $15.6 million and $153.1 million, respectively.

Company-wide, LSB reported third-quarter net income of $17.9 million ($.75 per diluted share) on sales of $198.0 million, versus the year-ago $13.2 million ($.58 per share) and $156.7 million, respectively.

“The favorable trend of the first quarter continued into the second quarter, producing the best first half in the history of LSB, with growth in net sales and profits of both our climate control and chemical businesses,” said Golsen. “It is especially gratifying that the bottom line gains were achieved despite the significant tax provision in the current periods versus a nominal tax for the 2007 reporting periods.”

LSB six-month net income was $28.8 million ($1.21 per share) on sales of $358.5 million, compared to the year-ago $24.0 million ($.87 per share) and $304.1 million, respectively.

Golsen told analysts that the company continues to study the startup of its idled Pryor, Okla., nitrogen plant. He said several potential strategic industry customers have indicated an interest in reaching an agreement for the offtake of product from the plant. Until an acceptable agreement is reached, there is no assurance that the plant will be restarted, said Golsen, adding that LSB is looking for as little downside risk to the company as possible.

The company expects to make a decision on the startup soon, sometime after environmental permits are issued, which is expected in October. The initial plan is to produce 325,000 st of UAN and an additional 50,000 st of anhydrous ammonia. LSB is mobilizing for the startup by ordering certain equipment. However, Golsen said this equipment can be used at its other plants should it decide not to proceed at Pryor. LSB expects the startup will take 6-12 months and cost $15-$20 million.

In other news, LSB reports that it has received a fully executed new labor contract signed by El Dorado Chemical Co., a subsidiary, and United Steel Workers of America International Union, AFL-CIO, and its Local 13-434. The agreement runs from Aug. 1, 2007-July 31, 2010.

The Andersons Inc.’s Plant Nutrient Group shone during the second quarter ending June 30, 2008, posting operating income of $47.4 million on revenues of $274 million, compared to the year-ago $17.1 million and $183 million, respectively. According to the company, these record results resulted from significant margin increases, primarily from inventory value appreciation stemming from the company’s plentiful storage space and unprecedented escalation in basic nutrient prices. The company said the escalation in nutrient prices, lower corn acres, and pre-season buying at the end of 2007 actually led to a reduced sales volume versus the year-ago period.

“Our second quarter and first half results are outstanding,” said The Andersons President and CEO Mike Anderson. “Both our Plant Nutrient and Grain and Ethanol Groups contributed significantly to our income during the period. I want to extend special thanks to our Plant Nutrient Group team. The team has worked tirelessly to serve customers and optimize their inventory position, while simultaneously exploring multiple growth opportunities and integrating Douglass Fertilizer into their business. It was truly a team effort and to see their results is rewarding. We are also excited by the addition of the three pelleted lime facilities yesterday, as this acquisition, like Douglass Fertilizer, is consistent with our strategic goal of growing our business to a national footprint.”

The company says it is now the largest pelleted lime manufacturer in North America.

First-half nutrient group income was $54.9 million on revenues of $379 million, versus the year-ago $17.5 million and $249 million, respectively.

Anderson noted that the company has raised its guidance for the year to $5.00-$5.40 per diluted share (GM Aug. 4, p. 10), with that being heavily influenced by unprecedented performance from the Plant Nutrient Group. Previous guidance had been $4.40-$4.80.

Anderson did a have a few words of caution to analysts. “I feel I should mention that although our margins continue to be strong as we move into the second half, based on inventory we own or have contracted to purchase, we do not believe that these margins are sustainable over the long, long term. Also, remember with the diversity of our business units there are numerous factors that could impact the full year results, both good and bad.”

As an example, operating income from the rail group was off somewhat during the second quarter, to $4.9 million on sales of $43 million versus the year-ago $6.9 million and $42 million, respectively. Anderson told analysts lumber being hauled for new homes is way down.

Company-wide second quarter net income was $45.6 million ($2.48 per share) on sales of $1.1 billion, compared to the year-ago $25.5 million ($1.40 per share) and $634.2 million, respectively. Six-month net income was $53.4 million ($2.91 per share) on sales of $1.8 billion versus the year-ago $34.7 million ($1.90 per share) and $1.04 billion, respectively.