Tessenderlo Kerley Inc.’s NovaSource crop protection business unit announced the establishment of two new sales regions and a new manufacturing position. The expansion is a result of the company’s recent acquisitions of the Sevin® brand agricultural insecticide (carbaryl) and Purshade® solar protectant. Keith Foster joins NovaSource as regional account manager for the Eastern U.S., and his responsibilities include managing the business in an eighteen state area. Foster was previously with Rotam North America as their territory manager in the Southeast. He also held earlier sales management positions with Helena Chemical and Terra International. Foster is in Sebring, Fla., and can be reached at kefoster@tkinet.com. Bernard Olsen represents NovaSource as the regional account manager for Southern California, Arizona, and New Mexico. Olsen was previously with Arysta LifeScience as their fumigant specialist in the western region. He held prior sales positions with Arysta, MGK, and Eden Bioscience. Olsen is in Paso Robles, Calif., and can be reached at bolsen@tkinet.com. Jim McNamara joins NovaSource as toll manufacturing manager. He was previously with Nufarm Americas as their supply chain and toll manufacturing manager, and also held prior manufacturing management positions with McIntyre Group, Owens Corning, and Mobil Oil.
All posts by webster@kennedyinfo.com
Yara International ASA – management brief
Yara International ASA on June 15 reported three executive management appointments. Alvin Rosvoll has been appointed head of supply and trade, Torgeir Kvidal has been appointed CFO, and Jan Duerloo has been appointed head of upstream. Rosvoll was formerly business unit manager North and East Europe, and has previously held several senior positions within the downstream and industrial commercial organizations.
Hallgeir Storvik and Tor Holba will continue to work for Yara as senior vice presidents with defined business development project responsibilities. Both agreed earlier to step down from their former positions as CFO and head of upstream, respectively, until the investigation by the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime is resolved (GM May 28, p. 10).
As part of ongoing effort to strengthen Yara’s compliance function, Tormod Tingstad has been appointed chief compliance officer, reporting directly to CEO Jørgen Haslestad.
MissPhos restarts plant after brief shutdown
Pascagoula — DAP production has resumed at Mississippi Phosphates in Pascagoula, Miss., after a brief shutdown following the deaths of two workers and injuries to two others in separate accidents that occurred on May 21 and June 1. The two explosions are being investigated by federal teams and the company, which has hired an outside engineering consultant. “Mississippi Phosphates began a phased startup last Friday (June 8) after receiving input from an outside expert – Engineering Systems Inc. – as well as the Occupational Safety and Health Administration (OSHA),” Miss Phos said in a statement. “DAP production has resumed with safety our top priority.” Earlier, the company stated that it had hired Engineering Systems (ESI) of Aurora, Ill. to participate in the safety inspection and assist the ongoing investigation. The plant’s phased startup was scheduled after the company received input from OSHA and ESI. OSHA at Atlanta, Ga., dispatched a second team to the Pascagoula plant immediately after the June 1 incident, which reportedly occurred during a maintenance procedure in the same area where the May 21 accident occurred. An OSHA spokesman said the inspection must be concluded within six months after it begins, and there will be no preliminary or interim report, which is agency policy. There was no word if the company would be releasing ESI’s findings. During the temporary shutdown, Miss Phos had all of the facility’s approximately 250 employees report for work performing routine functions, including terminal operations, monitoring, safety, maintenance, and other activities. Meanwhile, the two injured workers have been released from hospitals. The two were taken to nearby Singing River Hospital, but one suffered severe burns and was transferred to the burn center at the University of South Alabama Medical Center in Mobile. He was discharged from the burn center on June 13.
Injuries reported at Agrium and Simplot plants
Soda Springs, Idaho — Recent Southeast Idaho industrial accidents injured employees at Agrium’s Conda Phosphate Operations near Soda Springs and the J.R. Simplot Co.’s phosphate fertilizer complex near Pocatello within two weeks of each other. On June 8, a Western States Equipment employee was injured while working on a piece of heavy equipment at Agrium’s Rasmussen Ridge mine shop. The unidentified worker was taken to Caribou Memorial Hospital in Soda Springs for treatment and later flown by Life Flight to Portneuf Medical Center in Pocatello, where he subsequently was released. “Operations were halted at the mine for a period of time to assure the accident could be thoroughly investigated and measures implemented to prevent further risk to anyone working at our mine site,” Agrium spokesman John Tippets said. “Those measures have been taken, and operations have resumed at the mine.” Agrium’s primary concern, thoughts, and prayers continue to be for the well-being of the man injured and his family, Tippets said. “While we take pride in the work we do and its role in feeding a growing world population, safety is always our first priority as we recognize the tremendous impact that injuries can have on employees, their families, friends, and co-workers,” he said. “We wish him a speedy and full recovery.” On May 25, exactly two weeks prior to the Agrium accident, a Simplot employee was injured at the Don Plant west of Pocatello. The Pocatello Fire Department responded at about noon and took the victim to Portneuf Medical Center. “The employee who was injured at our Pocatello plant was treated at a local hospital and released the same day,” Simplot spokesman David Cuoio said. The nature and extent of injuries suffered by the two employees were not divulged.
Scotts lowers guidance after disappointing spring
Marysville, Ohio — The Scotts Miracle-Gro Company on June 12 said it expects to fall short of its previous guidance of 6 to 8 percent sales growth and adjusted earnings of $2.65 to $2.85 per share for fiscal 2012 due to lower-than-expected sales and an unfavorable product mix. The company said consumer purchases of its products at its largest retail partners in the U.S. are up 3 percent on a year-to-date basis, compared with 8 percent entering May. Scotts said the challenges this year are primarily an outcome of slowing consumer demand following a strong and early start to the lawn care season in the second quarter. The gardening season, which traditionally peaks in mid- to late-May, has not met expectations, the company said. Consumer purchases of Miracle-Gro branded soils and plant food are essentially in line with 2011, and appear to have been negatively impacted by an industry-wide slowdown in the sale of flower and vegetable plants, Scotts said. In addition, the company said poor weather and challenging economic conditions will also cause its European business to fall short of expectations. Gross margin rates are also likely to fall short, due primarily to unfavorable product mix, unplanned distribution costs associated with the strong performance of the controls and mulch businesses, and reduced leverage of fixed costs. “While we remain confident in the long-term growth opportunities in our business, it is clear that near-term category growth has become harder to achieve,” said Jim Hagedorn, chairman and CEO. “Over the balance of the fiscal year we will pressure test our assumptions and make any necessary adjustments as we plan for the 2013 lawn and garden season.” Hagedorn noted some positives for the company as well, including unit growth in consumer purchases of Scotts’ lawn fertilizer products for the first time in several years; growth in its controls business; and 25 percent growth in the company’s mulch business through the first seven months of the year. An updated outlook will be provided when Scotts issues its third-quarter financial results in early August.
PotashCorp still considers upping ICL stake
Saskatoon — Potash Corp of Saskatchewan is still considering increasing its stake in Israel Chemicals Ltd. (ICL). In a meeting with analysts, PotashCorp CEO William Doyle said his company has not given up attempts to buy a larger stake in ICL, but he stressed that this was contingent on getting the necessary backing from government regulatory agencies. PotashCorp currently holds a 13.9 percent stake in ICL, and last December requested permission from the state-owned Corporations Authority to increase the stake to 25 percent. On June 10 PotashCorp informed the authority that it was ceasing efforts to increase its stake, but only days later Doyle indicated otherwise. PotashCorp would require approval from the authority as well as Israel’s Anti Trust Authority for any such transaction. The Israel Corp. controls 52.3 percent of ICL, and the remainder is publicly traded. ICL is a cash cow for the holding company, which also controls a majority stake in Oil Refineries Ltd. and Zim Navigation Lines, both of which have witnessed a sharp drop in profitability in recent years. Last December several local agricultural organizations came out against allowing PotashCorp to increase its stake in ICL. The Plant, Citrus, Vegetable and Fruit Councils jointly issued a statement opposing the move, saying they feared it would enable ICL to further take advantage of its monopolistic position in Israel, and that this could have a detrimental impact on local foods prices as well as export prices for agricultural produce.
K+S places Ç500 million corporate bond
Kassel, Germany — German fertilizer company K+S AG on June 12 launched a corporate bond with a volume of €500 million and a maturity of ten years. With an interest coupon of 3 percent and an issue price of 99.422 percent, the yield is 3.068 percent. K+S said the proceeds will be used to refinance the outstanding corporate bond maturing in 2014, which, along with available liquidity and future cash flows, will serve to finance the Legacy Project in Canada and general corporate purposes. “The rapid and successful placing of the ten-year bond shows the capital market’s confidence in the sustainable earnings capacity of the K+S Group,” said Norbert Steiner, chairman of the K+S board of executive directors. “The issuance of the bond with a maturity up to 2022 optimizes our maturity profile, makes use of the capital market environment which is currently favorable for issuing investment-grade corporate bonds, and guarantees long-term financing security on extremely attractive terms.” Banco Santander, Barclays Bank, HSBC Bank, and Landesbank Baden-Württemberg served as joint managers and bookrunners for the transaction.
Low fert prices and volumes impact OCIÆs 1Q
Cairo — Orascom Construction Industries (OCI) released disappointing first-quarter results last week. Citing lower selling prices for ammonia and melamine and a drop in fertilizer sales volumes, OCI posted first-quarter EBITDA of US$255.8 million, down 23.6 percent from EBITDA of $334.8 for the first quarter of 2011. Net income for the quarter fell 54.4 percent to $94 million, compared with $206.3 million in last year’s first quarter, while consolidated revenues moved up 1.4 percent, to $1.28 billion from last year’s $1.26 billion. OCI said the income drop was due to lower operating margins and the elimination of investment income from the Gavilon Group LLC, since Gavilon was reclassified as an investment held for sale. OCI said the May 29 announcement of the sale of Gavilon to Japanese trading house Mrubeni Corporation (GM June 4, p. 1) valued the equity of the business at $3.6 billion. Subject to the completion of the transaction, OCI expects to receive cash proceeds in excess of $600 million for its 16.8 percent stake in Gavilon, which it acquired in 2008 for $340 million. OCI Chairman and CEO Nassef Sawiris said part of the proceeds will be paid as dividends to shareholders, and part will finance the company’s Fertilizer Group expansion in North America and potentially other opportunities. OCI said lower than targeted fertilizer sales volumes of ammonia, urea, and UAN during the first quarter, despite full operating rates, resulted in a favorable inventory position for OCI’s Fertilizer Group. Sawiris said this “should bode well for the Group, since fertilizer prices have recovered in the second quarter.” With increased production rates at its new fertilizer plants, Sawiris said OCI expects “a noticeable improvement in our financial results for the remainder of the year.” Since the first quarter, Sawiris said ammonia prices “have surged over 50 percent and urea prices have rebounded over 20 percent, and we expect prices for both commodities to remain firm for the second half of the year.” OCI said the Fertilizer Group has made significant progress on the commissioning of its capacity extensions in the U.S. and Algeria, and continues on track with its debottlenecking initiatives in Egypt and the Netherlands. In the U.S., OCI Beaumont sold 38,000 mt of ammonia during the first quarter, and is on track to produce at a rate of 250,000 mt/y. OCI Beaumont’s 750,000 mt/y methanol line is slated to start production in June. OCI noted that shareholders on May 17 approved the planned demerger of the company’s construction business from its fertilizer business. After remaining regulatory approvals are cleared, OCI said it expects the demerger to be completed during the third quarter.
Not all cheer in Illinois for possible OCI plant
Pekin, Ill. — Not everyone is eager about the possibility of Egypt-based Orascom Construction Industries (OCI) building a $1.6 billion fertilizer project in Illinois’ Peoria County. It’s far from a done deal since Iowa and possibly others have set out to capture the proposed plant, which would produce ammonia, urea, and other nitrogen fertilizers to sell to Midwestern farmers. Illinois has pitched an 1,800 acre location in Peoria as a good location, and to sweeten the deal, Illinois State Sen. Dave Koehler introduced legislation (GM June 4, p. 10) providing incentives to OCI. Last week Koehler’s bill was approved unanimously by the senate’s executive committee. Although the new project promises to bring 165 to 200 permanent jobs and 1,200 construction jobs to the area, the Illinois Heart of Sierra Club in Illinois has voiced some environmental concerns. “Orascom is looking at a specific site; however, no one really knows where it will end up,” Joyce Blumenshine, club chairwoman, told Green Markets. “We’re not really opposed to the new site, and we’re all for new jobs and opportunities. However, we want the issue to be included in early discussions about the plant. We hope that environmental impacts won’t be overlooked. We are hoping to raise public awareness.” Blumenshine said a key issue for the area is poor air quality. “The Peoria area has managed to avoid being in non-attainment for key pollutants,” she said. “However, at times we have come very close to ozone and other limits. Hopefully a plant like the Orascom project will not cause this county to jeopardize our air quality.” Air quality has been an issue for the Peoria area, which received a grade of “F” from the American Lung Association in 2009. It improved to a “D” in 2010, and was awarded an “A” in the latest report.
OCP forms joint venture with Toros Agri
Casablanca — Moroccan phosphate producer and exporter OCP on June 13 announced that it is forming a joint venture with Turkish fertilizer producer Toros Agri to export phosphate fertilizer to Eastern Europe, the Balkans, and Central Asia. State-owned OCP will hold a 70 percent stake in Black Sea Fertilizer Trading Co., with Toros Agri owning 30 percent. “This venture will enable us to serve our clients in this region in a shorter time, from a shorter distance,” said Mhamed Ibnabdeljalil, OCP executive vice president of sales, marketing, and raw materials procurement. “Together with Toros Agri, we aim to leverage our positioning in Turkey and extend our growth to new surrounding markets, while contributing to agricultural development and food security in this region.” Ibnabdeljalil said the jv’s mission will extend beyond trading activities, “as it will serve as a consulting vehicle to the cooperatives and farmer ecosystem in the region by providing them best-in-class agronomical services.” Some of the phosphate exported by the new company will be produced by Toros Agri’s Samsun plant on the Black Sea coast. Acquired by Toros Agri in 2005, the facility has two phosphoric acid plants, one compound production unit, and one DAP plant. “Our cooperation with OCP, which commands an important share of the world’s phosphate exports and is the biggest enterprise of Morocco, goes back a long way,” said Esin Mete, chairwoman of Toros Agri and CEO of its affiliate, Tekfen Agri-Industry Group. “Our goal is to carry our activities on a broader international scale. We especially target growth in the global fertilizer market through regional strategic partnerships. As an initial step, this joint venture with OCP is an important milestone.”