Arden Hills and St. Paul, Minn.-Land O’Lakes Inc. and CHS Inc. pumped $190 million into their jointly-owned Agriliance LLC retail operation in October and November of this year. LOL reports that it and CHS each contributed $75 million and $20 million in cash to Agriliance in October and November, respectively, to support ongoing working capital requirements. In late summer it appeared that a sale of the retail operations to a management-led group was imminent, most likely occurring in September; however, word is that negotiations continue. LOL indicated that the Agriliance retail business saw a $16.7 million decrease in pretax earnings for the third quarter ending Sept. 30, 2007, versus the year-ago quarter, mainly due to impairment and restructuring charges.
All posts by traceybg@gmail.com
Agriliance crop nutrient sales put at $1.9 B
St. Paul-CHS Inc., which obtained Agriliance LLC’s crop nutrient business Sept. 1, 2007, puts that unit’s sales at $1.9 billion for the year ending Aug. 31, 2007. It said about 6 percent of those sales were made to its own country operations business. It also says the unit represents about 9 percent of the U.S. fertilizer market. Primary suppliers to Agriliance were listed as CF Industries Holdings Inc., Potash Corp. of Saskatchewan Inc., The Mosaic Co., Koch Nitrogen Co., Yara International, and PIC. CF was the largest supplier to Agriliance during the past year, and CHS expects it to remain so in the future. CHS has provided more details on the repositioning of the crop nutrient and crop protection assets of Agriliance. It said at the closing of the distribution transaction Sept. 1, 2007, LOL owed CHS $133.5 million. LOL paid CHS $32.6 million in cash; in order to maintain equal capital accounts in Agriliance, it paid down certain portions of Agriliance’s debt on the behalf of CHS in the amount of $100.9 million. Values of the distributed assets were determined after the closing, and in October 2007 CHS made an estimated value true-up payment to LOL in the amount of $45.7 million, plus interest.
The Andersons upgrade guidance
Maumee, Ohio-The Andersons Inc. said Nov. 29 that it expects its full-year earnings per share to exceed previous projections. The current guidance range is between $3.40-$3.60 per diluted share, up from the previous guidance of $3.15-$3.35 per diluted share estimated in October. Further income improvements in the Plant Nutrient Group, continued increases in the grain business, and income from the investment in Lansing Trade Group have led to this unprecedented performance. The company’s earnings per diluted share for 2006 were $2.19. “We are very excited about the way this year is shaping up for us, it is a tremendous performance by our team,” says CEO Mike Anderson. “There are many factors contributing to this outstanding year, which we detailed in our recent conference call. Also, as noted in the call, some of these items are unlikely to be repeated, which may limit our ability to perform at this record level next year.”
Southern States reports good year
Richmond-Southern States Cooperative reported one of its best years in its 84 year history at its recent shareholders meeting. For fiscal 2007, ending June 30, the cooperative reported earnings before non-customary items of $13.4 million on sales of $1.7 billion, up from the prior year’s $5.5 million and $1.6 billion, respectively. However, net income was actually down, at $4.4 million versus the prior year’s $6.4 million, though operating income was $48 million, up from the year-ago $36.9 million. The company attributed improved results to serving commercial agriculture and the co-op’s core competency in helping farmers grow things. Citing the booming biofuels market and higher grain prices, the co-op said it was well positioned to capture opportunities of a favorable agricultural market place – and it paid off. The co-op touted its customer retention rate, with 95 percent of the top 10,000 patrons buying products and services on an annual basis. It also noted initiatives to upgrade each of its ag retail locations every 7 to ten years, with expectations that 12-20 will be done in 2008. Another initiative was the introduction of three new fertilizer enhancement products exclusive to the co-op in its operating territory – Avail, NutriSphere, and Wolf Trax are new technology products to enhance a plant’s ability to use the nutrients in the soil. The co-op expects a positive outlook for fiscal 2008 based on favorable conditions for agriculture, though it is concerned that a warm winter may bite into its petroleum business. However, it has been aggressively seeking to boost its propane business so as to offset the impact of warm winters.
New CRF producer locates in S.C.
Charleston, S.C.-X-Calibur Plant Health Co. – formed solely for producing, under license from a German company, a controlled-release nitrogen for commercial growers – is opening headquarters and manufacturing facilities right away in the Charleston region, according to company officials. Technical Services Director Chuck Elstrodt told Green Markets that all equipment, including the coater, is in place and checked out for producing Plantacote CRT, which has been marketed in the U.S. since 1999 by the German developer Aglukon. Elstrodt didn’t have any production estimates, but said the Plantacote will be sold by distributors throughout the U.S., primarily in the southern states. Container nurseries and greenhouses are expected to be the primary users. Elstrodt said X-Calibur will be providing a product using state-of-the-art coating technology, developed in Germany, which produces a tougher membrane with a high degree of elasticity that resists damage by mechanical abrasion or under extreme cold conditions. He said X-Calibur will be obtaining its supplies of a special nitrogen prill for coating from Belgium and Germany since the product can’t be made in the U.S. Plantacote will be available in 50-pound bags and 1,000 and 2,000 bulk quantities. X-Calibur officials also looked at locations in Pennsylvania, North Carolina, and Georgia before settling on the Charleston area, where the plant will employ 25 local residents.
Oklahoma AG wants use of poultry litter halted
Oklahoma City-Agriculture interests are incensed and warn of serious consequences if Oklahoma Attorney General Drew Edmondson succeeds in his attempt to obtain a court order to stop the use of poultry litter as fertilizer in the Illinois River watershed. “We don’t like this one bit,” said Marla Peek, Oklahoma Farm Bureau director of regulatory affairs. “Poultry growers in the watershed are abiding by state law, but that’s not good enough for the attorney general. If there’s a water quality problem why aren’t the appropriate federal or state agencies taking action?” Poultry Partners Manager Bev Saunders warned, “While this action would have a serious impact on the poultry producers, it will also have a huge impact on beef, hay and grass producers in the area. The landscape of northwest Arkansas and northeast Oklahoma has changed throughout the year to the credit of poultry litter. What used to be sage grass fields are now green pastures. Barren lands that in the past would have caused soil runoffs are now seeded and growing in grasses.” Citing imminent danger to public health, Edmondson has filed a motion asking a federal judge in Tulsa to prohibit the application of poultry waste within the 1,640 square mile watershed. It was his latest move in a lawsuit against Tyson Foods and other integrated poultry producers based in northwestern Arkansas, accusing the companies of knowingly violating state and federal environmental laws with their careless waste-dumping methods. “We can show that fecal bacteria in poultry waste is reaching the surface water and groundwater,” Edmondson said in a media release. “Scientists found areas where the bacterial counts in runoff water from poultry waste disposal fields were similar to those found in raw, untreated human sewage.” Environmental groups applauded the injunction request. Save the Illinois River President Kurt Robinson said he has been calling for similar measures for some time. “I think it’s an excellent move and long overdue,” Robinson said. “A large part of the recorded data suggests most of the pollution in the Illinois River is coming from runoff, and the fact that poultry waste is being used as fertilizer in the basin has been a huge concern due to its high phosphorus content.” Poultry Partners’ Saunder responded that Edmondson is ignoring the fact that BMPS, the entity that administers a poultry litter hauling program, recently reported to the Oklahoma Scenic Rivers Commission that it tracked the transfer of just over 74,000 tons out of the watershed in the past 12 months.
Hanfeng enters JV for new SCU plant
Toronto-Hanfeng Evergreen Inc. said Nov. 26 that it has entered into a 50-50 joint venture agreement with Anhui Linquan Industry Chemical Co. Ltd. to build and operate a sulfur coated urea (SCU) plant in Fuyang city, Anhui province, in China. The plant will be constructed at Linquan’s facility, and construction will commence once all permits and licenses have been obtained. Phase I calls for the construction of a 50,000 mt/y SCU plant at a gross cost of approximately C$6.6 million, which will be paid equally by the partners. The plant can be expanded upon successful commissioning and operations to accommodate further demand in the local market. “Anhui is one of the largest agricultural provinces in China and an excellent geographic choice for our second SCU joint venture” stated Xinduo Yu, Hanfeng’s president and CEO. “Additionally, our partner Linquan is one of the most profitable chemical producers in Anhui province, with more than 30 years of industry operating history and a well established customer base and distribution network.” The SCU facility will be constructed immediately next to Linquan’s urea finish line at its Anhui facility, significantly reducing the capital costs associated with the construction and installation of required infrastructure such as buildings, warehouses, underground connections, and heating systems, which are already in place. Linquan will supply urea for the joint venture using their leading coal gasification technology, which was developed with government support. The SCU produced by the facility will be marketed primarily in Anhui province and will provide an exceptional market for SCU as the primary crops include wheat, corn, and cotton, which are all high fertilizer consumption crops. “Slow release fertilizer is the future of the China agriculture sector,” said Mr. Zhang Zhaozhen, president of Linquan, “SCU is a perfect fit for the local market in Anhui province. In addition, SCU blended fertilizers can provide upgrades to our conventional fertilizers. We are very pleased to joint venture with Hanfeng, the leader in slow release fertilizer of China, and believe we will have a great future together.”
Invista to build new nitric acid plant in Singapore
Wichita, Kan.-Invista Intermediates announced Nov. 13 that it will build a nitric acid plant on Jurong Island in Singapore. Nitric acid is one of the feed stocks for adipic acid, which is used in the manufacture of nylon, polyurethane, and other products. Ground breaking for the nitric acid plant was held Nov. 13. The new facility will be built on Invista’s Sakra site adjacent to the company’s existing adipic acid plant, which will improve the energy efficiency of the unit. Construction will begin immediately and is expected to be complete by mid-2009. The facility has been designed to meet 100 percent of the adipic acid plant’s needs for nitric acid. “This new nitric acid facility will strengthen our long term supply situation for nitric acid, helping us to better meet our customers’ needs and to significantly strengthen the competitiveness of our Intermediates business in the region,” said Warren Primeaux, president, Invista Intermediates. “The new plant also underscores Invista’s continuing growth in Singapore and Asia as a whole.”
California reels from wildfires, water shortages
Sacramento-Red-flag fire warnings were issued at midweek for parts of Southern California due to tinder dry conditions and a new round of Santa Ana winds. The warnings came just days after another Malibu blaze scorched nearly 5,000 acres and destroyed more than 50 homes over the Thanksgiving weekend. The destructive fires underscore just how parched much of the state is, as do the water emergencies declared in several Southern California cities in recent weeks. Local reports said Shasta Lake, at the head of the Sacramento River system near Redding, currently holds just 1.8 million acre-feet of water, well below its 4.6 million capacity. Lake Oroville is holding little more than a third of its 3.5 million acre-feet capacity, and Folsom Lake is barely one-quarter full. On Nov. 26, the California Department of Water Resources told the water agencies that serve two-thirds of the state that they can expect just 25 percent of their normal allocations next year, reportedly down from 60 percent this year. One Central Valley source said the water cutbacks could take some 250,000 farm acres out of production next year, and a court order curtailing water deliveries to the San Joaquin Valley and Southern California from the Sacramento-San Joaquin Delta to save endangered delta smelt could conceivably take more than 80,000 acres out of cultivation in 2008.
Management Briefs
The Mosaic Co. has announced that Doug Hoadley, currently head of investor relations, has accepted a new position as director of marketing for Global Specialty Products. His responsibilities include the marketing of Mosaic’s MicroEssentials product line. Brande Hook recently joined Mosaic as senior marketing and communications analyst for Specialty Products, and will be reporting to Hoadley in his new role. Christine Battist has been named as Mosaic’s new director of investor relations. She has worked for Mosaic for the past three years in the finance department.
Viterra announces the appointment of Steven Berger as senior vice president of human resources and transformation. He replaces Gerry Valois, who retired earlier this year. Berger will reside in Calgary, Alberta, and work with operations across Western Canada. He comes to Viterra with an extensive background in merger integration, transformation, and change leadership. Prior to joining the company, he was a senior executive (partner) with Accenture, a global management consulting, technology services, and outsourcing company, in their corporate strategy practice.
Over the past six months, Berger worked closely with Viterra executives to successfully plan and manage the integration of Saskatchewan Wheat Pool Inc. and Agricore United to create Viterra. This included assisting with the design of the newly merged company’s operating model and identifying and tracking synergy savings, currently estimated at $92 million. Before working for Accenture, Berger, who has M.B.A. and B.S. degrees, held increasingly responsible positions with A.T. Kearney, an international management consulting firm.