Sioux City-Terra Industries Inc. expects its idled Donaldsonville, La., plant to start up in August, with between 10 days to two weeks required to get the plant up to normal rates. As a result, the plant is expected to contribute to at least two of the three months in the third quarter. Terra hopes to operate the plant at 450-500,000 st/y annual capacity. The 400,000 st would replace purchased material – any above that would be extra. Terra says the aggregate cost of the startup will be approximately $10-$13 million, half of which will be catalyst costs.
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Cause of Agrium fire may never be known
Lynchburg, Va.-Authorities apparently are nearly finished with their investigation of the fire last January that destroyed Agrium Inc.’s Lynchburg distribution terminal (GM Jan. 21, p. 1), and with an estimated $2 million in losses, Agrium isn’t sure at this point that the former Royster-Clark fertilizer plant will be rebuilt. Lynchburg Fire Marshal Greg Wormser said the cause may never be known. “There was so much destruction and so much damage that it was very dangerous to put investigators inside,” he said. “The other thing is that it burned so incredibly hot that the cause probably won’t be determined.” Agrium spokeswoman Lisa Parker agreed that it was a pretty spectacular fire for this community. “It burned a lot longer than we figured,” she added, indicating that Agrium hasn’t determined a final figure, but expects that it will be in the millions. “We haven’t made a decision at this point. Although we’ve cleared up the site we still don’t know if we are going to rebuild.”
Scotts dealing with recalls, faces fed probe
Marysville, Ohio-Scotts Miracle-Gro Co., hit by product registration and recall troubles (GM April 28, p. 13) on several fronts and facing a criminal investigation by two federal agencies, disclosed April 24 that it had dismissed an unnamed employee responsible for “causing invalid product registration forms to be submitted to federal and state regulators.” It was not known if the dismissal was associated with the weed-and-feed product that was found to be improperly registered and is being removed from retailer locations along with notices going out to consumers, or the apparent voluntary recall of two lawn fertilizer products from retail customers and consumers – or both. Nor were there any details regarding what Scotts reported as learning on April 10 that a federal criminal investigation is being carried out and is believed being led by the U.S. Justice Department and EPA. Scotts noted only that the company “has been cooperating with the government since it learned of the investigation and will continue to do so.” And in the midst of it all, Scott’s officials decided that, because of distractions caused by the recall turmoil, the release of second-quarter financial results would be delayed for nearly a week, or until May 5. Chairman and CEO Jim Hagedom personally reported that in addition to terminating the employee for improper conduct, Scotts had hired an independent consulting firm to review its regulatory compliance processes and procedures. “Over the last several days, we learned that one of our former employees deliberately circumvented company policies, caused invalid product registration forms to be submitted to federal and state regulators, and then hid those actions from co-workers and managers,” Hagedom stated. “We sincerely apologize to the EPA, our retail partners, our consumers and our shareholders. As I have stated, compliance with government regulation is not optional, and we are taking aggressive steps to better understand how this action occurred and to seek to avoid any re-occurrences.” He added that Dr. Richard Shank, who joined the company earlier this year as its new chief environmental officer, will assist this effort. Shank is former director of the Ohio Environmental Protection Agency, as well as former director of the Nature Conservancy in Ohio. At the same time, Scotts announced that as part of the “proactive steps aimed at strengthening its product registration practices and procedures with state and federal regulatory agencies actions,” it was working with EPA on a recall of Bonus S Max and Turf Builder Plus 2 Max lawn fertilizer products from retail customers and consumers. The company explained that Bonus S Max was developed for use only on St. Augustine grass grown in the southeastern states, and Turf Builder Plus 2 Max was briefly tested but is no longer produced or distributed and is not related to the popular Turf Builder Plus 2. All recalled products are reported to represent less than one percent of total sales. But Scotts spokesman Jim King was quoted in the press as saying the recalls, which started with Miracle-Gro Shake ‘n Feed With Weed Preventer All Purpose Plant Food with its unregistered herbicide, could cost the company $20 million, not including legal and consultant fees.
Indiana town jolted by ammonia release
Bargersville, Ind.-Local farm supplier Roy Umbarger & Sons Inc. is beefing up its security following an incident late on April 21. Two anhydrous ammonia nurse tanks located separately on company property were tampered with, and the contents of one of the tanks was nearly fully released on this small rural community. Authorities report that there were no serious injuries, and only a few residents voluntarily left their homes. Assistant Police Chief Todd Bertram said a paramedic on the scene and a motorist driving by were treated at nearby hospitals. He said a lot of others were unharmed when they drove through the vapor cloud, which was controlled by a Franklin hazmat crew called in to spray down the area. “This was no theft (by meth-makers) because they wouldn’t be opening the tank valve three turns as was the case here,” Bertram suggested. “It almost emptied a whole tank.” He said a couple of days earlier a liquid clay tank was hit in the same manner, indicating both were targets of vandalism. Rowana Umbarger, wife of one of the owners, said from now on Umbargers will be keeping the tanks outside of town at the filling location and brought into town only for weighing. Surveillance cameras also will be installed. She said the fact that her husband, R. Martin Umbarger, is a National Guard major general and state adjutant general is a coincidence and had nothing to do with the incident. The possibility was suggested by a local newspaper columnist who wrote that “for the conspiracy theorists in the audience, (Umbarger’s military position) means that there could easily be a political connection to this vandalism.”
Farm incident releases 2,000 lbs of ammonia
Pecatonica, Ill.-About 2,000 pounds of anhydrous ammonia were released from a nurse tank when a trailer hitch broke off from its tow vehicle and the applicator hose snapped April 30 about 2 p.m. in a farm field near U.S. Route 20, according to the Winnebago County sheriff’s office. There were no injuries, no road closures, and no evacuations, reported Sheriff’s Sgt. Brian Harrison. Harrison told Green Markets that farmers down wind were notified and the fumes were kept away from the highway by favorable winds. “We issued an advisory for about three hours, but that’s all,” Harrison said. “It was not on a highway and not in a populated area and if it had to happen this was a good place for it.” Pecatonica firefighters closed the valves on the ammonia trailer and declared the area to be safe, and Winnebago County emergency services disaster agency remained on alert for the short time. The incident did recall last April, when more than 38,000 pounds of anhydrous ammonia leaked from a semi trailer truck in Seward, forcing the evacuation of the small town of less than 300 people.
Tiny leak spreads ammonia at Oregon plant
St. Helens, Ore.-A tiny leak in a safety relief valve atop a 500-ton tank at the Dyno Nobel nitrogen fertilizer plant here released between 300 and 700 pounds of anhydrous ammonia over nearly five days without causing any serious problems, according to Plant Manager Greg Godfrey. There were no injuries, no plant or community evacuations, and no interruptions in the operation because of the leak, which took place between April 23 and April 28. A truck driver noticed the odor and alerted emergency responders. “We’re still calculating the amount,” Godfrey told Green Markets. “But data from our instrumentation indicate that the leak began on that Wednesday at 11 a.m. and wasn’t detected until 2 a.m. Monday.” Godfrey said it was in one of two safety valves that are part of the overpressure system, which was reconditioned by a certified service shop just two weeks prior to the leak. He described the leak as so small that it didn’t trigger the alarm system and was not obvious to plant service personnel, who are on duty around the clock. Godfrey figures the fumes dispersed on their own until a change occurred in the weather, when a truck driver passing by smelled ammonia reported it to the Columbia River Fire and Rescue. The plant night supervisor shut off the leak before the emergency crews arrived. Godfrey said that once a week an operator goes several stories up to the top of the tank to perform a routine inspection, but wasn’t scheduled to make the climb until after the leak was found. Several employees who live less than a half mile away detected nothing, and the same was true for those at a utility office and quarry just across the street. Godfrey said the ammonia is used primarily to produce UAN, but some is sold directly to farmers from the plant, which employs seven. The leak also was reported to the Oregon Dept. of Environmental Quality, where a spokeswoman said that because the incident was accidental the department will not take action against the company.
Yara sells chemical supply activities to Brenntag
Oslo-Yara International ASA has reached agreement with the Brenntag Group to sell certain chemical supply activities at its Köping and Tertre sites as part of the commitments agreed to with the European Union for approval of its acquisition of Kemira GrowHow Oyj. One of the commitments concerned the divestment by Yara of its AN solution, aqueous ammonia, and weak nitric acid supply activities conducted from the Köping production site in Sweden, and the AN solution, aqueous ammonia, weak nitric acid, and concentrated nitric acid supply activities conducted from the Kemira GrowHow production site at Tertre, Belgium. In each case, related production and distribution assets form part of the sales package. Yara has reached agreement with the Brenntag Group to sell the Köping supply activities to Brenntag Nordic AB and the Tertre supply activities to Brenntag NV. The European Commission has approved Brenntag as a purchaser and the form of the agreements. As a result, a major step has been taken towards the fulfillment of the commitments to the European Union related to the approval of Yara’s acquisition of Kemira GrowHow Oyj. Closing is conditional on regulatory approvals and is expected to occur during the second quarter of 2008. The sale will result in a gain of EUR 11 million, which will be booked in Yara’s second quarter results.
Marsulex tabbed to build desulfurization plant in PA
Toronto-Marsulex Inc. said April 22 that its Marsulex Environmental Technologies (MET) has been awarded a contract by Sunbury Generation LP to design, supply, and install a wet flue gas desulfurization system at its 400 megawatt Sunbury Power Plant complex in Shamokin Dam, Penn. The contract value is over $60 million. Start-up of the new system is slated for January 2010.
Management Briefs
Bruce Waterman, Agrium Inc. senior vice president, finance, and chief financial officer (CFO) has been chosen as Canada’s CFO of the Year?äó for 2008. Waterman joined Agrium in 2000, and has more than 25 years of experience as a financial executive. He will be honored at a gala dinner in Toronto May 29. The award is presented annually by Financial Executives International Canada (FEI Canada), PricewaterhouseCoopers LLP, and The Caldwell Partners International. The award, which recognizes the quality, insight, direction, and leadership of Canada’s senior financial executives, was begun in 2003. Waterman is the first fertilizer company CFO to win the award.
Lateegra Gold Corp. has engaged Stephen Butrenchuk, P.Geol., to review and author a mineral project resource disclosure and provide consulting services involving the recently acquired Fernie Formation phosphate claims (GM April 28, p. 12). Lateegra describes Butrenchuk as one of the leading authorities on phosphate deposits in British Columbia. He began his career with Cominco Ltd., where he spent 16 years as an exploration geologist. He has been contracted to complete a detailed NI 43-101 technical report on the company’s current claim holdings, which will include re-evaluation of historical drilling completed in the area by Cominco, Imperial Oil, Formosa Resources, and First Nuclear Energy.
Viterra Inc. has announced that its board of directors has elected Thomas Birks as chairman. He has been a Viterra director for three years. Birks is president of Birinco Inc., a small merchant bank, and previously served as president of Henry Birks and Sons Ltd. in Montreal. He graduated from McGill University with a Bachelor of Arts and holds an MBA from the Harvard Business School.
Birks replaces Terry Baker as Viterra’s chair. Baker will remain on the board as a director.
Market Watch
AMMONIA
AMMONIA
U.S. Gulf/Tampa: The import and NOLA markets were quiet last week. Most of the attention in the ammonia market was overseas or inland U.S. In the Black Sea, buyers were anxiously awaiting news of a drop. And in the inland U.S., sellers appeared determined to keep prices up as the prices of urea and UAN soared.
Natural Gas: The final May closing price, which was recorded April 28, was $11.280/mmBtu. It was reported as the highest contract expiration price since the January 2006 contract.
Correction: The closing NYMEX natural gas price for April should have read in Green Markets as $9.578/mmBtu, not $9.572/mmBtu. This was the April close on March 27, and it first appeared in the issue dated March 31. The May price posted on March 27 was $9.687/mmBtu, not $9.680/mmBtu.
Eastern Cornbelt: The region continued to experience fieldwork delays related to wet conditions, but some planting progress was reported last week. Lots of preplant ammonia reportedly still needs to be applied in Illinois and Indiana.
The spot market for ammonia continued to be quoted at $715-$730/st FOB regional terminals, although postings were higher. One supplier moved its reference levels last week to $755-$760/st FOB terminals in Illinois and Indiana for prompt tons, and there were reports of another offering fall prepay for as high as $815/st FOB. Still another was offering forward contract ammonia for June at $760-$770/st FOB in the region.
Western Cornbelt: The anhydrous ammonia market was tagged at $700-$730/st FOB regional terminals for spot market tons last week, with one supplier referenced at $740/st FOB in Nebraska, $745/st FOB in Iowa, and $750/st FOB in Missouri. Agrium’s April 28 ammonia postings included $700/st FOB Hoag, Neb., and $705/st FOB Early, Garner, and Whiting, Iowa; Mankato, Minn.; and Greenwood, Neb. Agrium’s ammonia postings in the Leal, Beulah, Velva, and Grand Forks sales area in North Dakota firmed on May 1 to $860/st FOB and $880/st DEL.
Southern Plains: The ammonia market was up from last report as well. Sources quoted ammonia pricing in a broad range at $600-$675/st FOB, with the low out of Oklahoma production points and the upper end to dealers FOB Kansas pipeline terminals. One Kansas source said the next big fertilizer push in his territory would be ammonia on the grain sorghum crop.
Agrium’s anhydrous ammonia postings firmed on April 28 to $675/st FOB Clay Center, Kan.; $670/st FOB Conway, Kan.; $665/st FOB Mocane, Okla.; and $645/st FOB Borger, Texas. The company’s delivered postings from the Borger location moved on that date to $670/st in Texas north of Interstate 40, and $675/st in Texas and Oklahoma south of Interstate 40.
South Central: The anhydrous ammonia market was pegged at $610-$660/st FOB regional terminals, with the low for spot tons FOB Memphis and the upper end for fall prepay.
Western U.S.: Agrium’s anhydrous ammonia postings firmed on May 1 to $925/st rail-DEL in Oregon, Washington, and northern Idaho; $945/st truck-DEL in Oregon and Washington east of the Cascades, and in northern Idaho; and $950/st truck-DEL in Montana and northern Wyoming. Agrium’s aqua ammonia postings firmed on May 1 to $236/st FOB Central Ferry and Finley, Wash.
Black Sea: Asian sources report prices quoted by traders as low as $430/mt FOB, but no one could confirm any business done at that level. The problem with nailing down the new lower price levels, said one trader, is that the Ukrainian government has not yet lowered the KIP. The current official lowest price was still at $480/mt FOB, as most of the world got ready to take a long international Labor Day holiday break.