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K+S announces sale of nitrogen business

Breaking Industry News

Germany’s K+S Aktiengesellschaft has signed an agreement with EuroChem regarding the sale of K+S Nitrogen, one of the leading suppliers of nitrogenous fertilizers.

The transaction, with an enterprise value of EUR 140 million for K+S Nitrogen, is likely to be closed at the end of the second quarter of 2012. The effective economic date of the transfer is March 31, 2012. The sale is subject to a number of factors, including approval by the EU antitrust authority.

For K+S, the sale will generate a book profit of around EUR 70 to 80 million, depending on the net earnings of K+S Nitrogen generated by the time the transaction is closed together with other effects. From now on, K+S Nitrogen will be stated as a “discontinued operation”. In financial year 2011, K+S Nitrogen generated revenues of EUR 1,156.8 million and operating earnings EBIT I of EUR 69.4 million.

“We are pleased to have found a well-suited new owner for K+S Nitrogen in EuroChem. Against the backdrop of the recently concluded sale of the fertilizer activities of BASF in Antwerp, the sale to EuroChem is the best option from the perspective of K+S, but also of the employees of K+S Nitrogen,” says Norbert Steiner, Chairman of the Board of Executive Directors of K+S Aktiengesellschaft. “I would like to express my particular thanks to the employees of K+S Nitrogen for their extraordinary commitment in recent years,” Steiner continues.

EuroChem CEO Dmitry Strezhnev commented: “K+S Nitrogen is a natural extension to our recently acquired EuroChem Antwerpen operations. This acquisition provides us with a world-renowned platform while further securing our competitiveness in key markets worldwide. We welcome the highly skilled staff of K+S Nitrogen and our clients and partners may rest assured that the high level of service they have grown accustomed to with K+S Nitrogen will be maintained.”

The strategy of the K+S Group provides for growth in the Potash and Magnesium Products and the Salt business segments in particular and for focusing management resources and financial means on this accordingly. Against this background, K+S had sold the business activities of COMPO to the investment company Triton last year.

K+S Nitrogen markets nitrogenous fertilizers with a focus on major customers in agriculture and special crops such as fruits, vegetables and grapes. In addition to the fertilizers produced by EuroChem Antwerpen and delivered by BASF for it, K+S Nitrogen also markets the goods of other European fertilizer producers. The company is based in Mannheim, Germany, and employs about 180 people worldwide. More information is available at www.ks-nitrogen.com.

EuroChem is a leading global agrochemical company, producing primarily nitrogen and phosphate fertilizers, as well as certain organic synthesis products and iron ore. The Group is vertically integrated with activities spanning from mining and natural gas extraction to production, logistics, and distribution. EuroChem is currently developing two sizeable potash deposits in Russia with the Gremyachinskoe (4.6 mtpa) and Verkhnekamskoe (3.4 mtpa) greenfield projects. Please visit www.eurochem.ru for further information.

The K+S Group is one of the world’s leading suppliers of standard and speciality fertilizers. In the salt business, K+S is the world’s leading producer with sites in Europe as well as North and South America. K+S offers a comprehensive range of goods and services for agriculture, industry, and private consumers, which provides growth opportunities in virtually every sphere of daily life. The K+S Group employs more than 14,000 people. The K+S share – the commodities stock on the German DAX index – is listed on all German stock exchanges (ISIN: DE000KSAG888, symbol: SDF). More inform

Icahn wins majority stake in CVR

Breaking Industry News

Billionaire investor Carl Icahn today announced that, as of 11:59 p.m., New York City time, on May 4, 2012, 48,112,317 shares of common stock of CVR Energy Inc. were validly tendered pursuant to the offer by his affiliates to acquire CVR for $30 per share plus a contingent value right. As all of the terms and conditions of the offer have been satisfied, Icahn’s affiliates have accepted for payment all of the tendered shares, which represent approximately 63 percent of all CVR shares held by shareholders unaffiliated with Icahn. Upon the purchase of these shares, which will occur today, the Icahn group will own approximately 69 percent of CVR’s outstanding shares.

Icahn also announced today that the subsequent offering period for the offer has commenced and will expire at 11:59 p.m., New York City time, on May 18, 2012. During the subsequent offering period, holders of CVR common stock who did not tender their shares during the initial offer period may tender their shares and receive the same consideration of $30 per share plus a contingent value right that was offered during the initial offer period. Icahn’s affiliates will immediately accept and promptly pay, on a first-come, first-served basis, for all CVR shares as they are tendered during the subsequent offering period.

In accordance with the terms of the previously announced Transaction Agreement between Icahn and CVR, upon the purchase of the tendered shares today, seven members of CVR’s nine-member board of directors will be replaced automatically with seven individuals nominated by Icahn.

Icahn stated: "We are pleased with the results of our tender offer and are excited to have CVR join the Icahn Enterprises family. We look forward to working together with the CVR team."

Shareholders with questions about the tender offer may call D.F. King & Co., Inc., the Information Agent, toll-free at 800-347-4750 (banks and brokers call 212-269-5550).

CVR sends letter to shareholders

Breaking Industry News
CVR Energy Inc. today sent a letter to shareholders as a deadline for them to tender into an offer by Carl Icahn looms.
May 3, 2012
Dear Fellow Stockholders,
As you know, Carl Icahn’s tender offer to acquire all outstanding shares of our common stock for $30 per share in cash plus a contingent cash payment right ("CCP") expires at 11:59 p.m. New York City time tomorrow evening. As was disclosed in the company’s Solicitation / Recommendation Statement on Schedule 14D-9, CVR Energy’s Board of Directors is not recommending that stockholders tender their shares into Mr. Icahn’s offer because it believes that the company’s potential long-term value exceeds the tender offer price.
We are writing to let you know what happens next if Mr. Icahn either does or does not succeed in his tender offer. If at least 31,661,040 shares (which represents approximately 36 percent of the outstanding shares) are tendered prior to 11:59 p.m. tomorrow night, the Minimum Condition will have been satisfied. This means that the tendered shares plus the number of shares already owned by Mr. Icahn represent a majority of our outstanding shares.
If the Minimum Condition is Satisfied: In accordance with the Transaction Agreement previously entered into between the company and the Icahn Group, if the Minimum Condition and all other applicable conditions are satisfied, then:
  • Completion of the initial offering period: Mr. Icahn is required to close the tender offer and accept all tendered shares for payment.

  • Additional tender period: Mr. Icahn is then required to immediately provide all remaining stockholders not wishing to remain minority stockholders in a controlled company with an additional 10-business day period during which they may tender any remaining outstanding shares for the same $30 in cash plus a contingent cash payment right (the Subsequent Offering Period). During the Subsequent Offering Period, Mr. Icahn must immediately accept for payment and promptly pay for all shares tendered on an ongoing basis.

  • Short-form merger: If either at the conclusion of the initial tender period or the conclusion of the Subsequent Offering Period, the Icahn Group holds 90% or more of the outstanding shares, Mr. Icahn must cause a merger to take place in which all remaining outstanding shares will be converted into the right to receive the same consideration as in the tender offer ($30 per share in cash plus a CCP), unless such holder chooses to exercise statutory appraisal rights.

  • Untendered shares may remain outstanding: If the Icahn Group does not hold 90 percent or more of the outstanding shares at the conclusion of the Subsequent Offering Period, those shares which have not been tendered will remain outstanding.
If the Minimum Condition is Not Satisfied: If Mr. Icahn does not receive the required level of stockholder support as of 11:59 pm New York City time on May 4, pursuant to the Transaction Agreement he has agreed to terminate his tender offer and the pending proxy contest for control of our Board of Directors.
For additional detail regarding the foregoing mechanics and to review the complete recommendation of your Board of Directors, please refer to our Solicitation/Recommendation Statement on Schedule 14D-9 (as amended) on file with the Securities and Exchange Commission (and available free of charge at www.sec.gov), available on the company’s website www.cvrenergy.com through the Investor Relations link, and previously mailed to all stockholders.
As described in the company’s prior communications, the company and its advisors have contacted possible acquirers to determine their level of interest in a potential transaction with the company. If Mr. Icahn’s tender off

APF, BASF break ground on ammonium sulfate crystallizer project

Ammonium Sulfate, Featured, News, Southeast

Ground-breaking was held April 24 at BASF’s Freeport, Texas, chemical complex, where it was announced that BASF and customer American Plant Food Corp. (APF), Galena Park, Texas, will soon begin construction on a joint venture 160,000 st/y ammonium sulfate crystallizer system at BASF’s caprolactum plant.

Once completed, the crystallizer will refine ammonium sulfate, a by-product of the caprolactum manufacturing process. APF markets and sells all of BASF’s North American AS.
Freeport capacity is 710,000 st/y. The new crystallizer will not add extra overall AS capacity, but it will allow more of it to be converted to granular product, which is often priced at a premium.

Construction of the crystallizer is expected to take six months to complete and will cost about $8 million. The project will employ 20 construction personnel and will create 30 jobs off-site for local companies.

“We are excited that BASF sees the value in this project and is able to work with us to make our vision a reality,” said Don Ford, APF president, CEO, and chairman. “With our earlier crystallizer project being such a success, we look forward to what we will both be able to achieve with the new one.”

“BASF and American Plant Food have had a successful partnership for more than 45 years,” said Herman Althoff, BASF senior vice president of the company’s Polyamide and Intermediates global business unit. “This project shows our dedication to having one of the best quality ammonium sulfate products on the market.”

“This provides BASF and American Plant Food with a unique opportunity to gain significant benefits for both parties,” said Chris Witte, BASF senior vice president and general manager of the Freeport site. “It is an excellent example of finding innovative uses for by-products and reducing waste in our manufacturing processes – as well as helping our customers succeed.”

BASF is the world’s largest manufacturer of caprolactum, which is an intermediate for producing polyamide (PA) 6. PA 6 applications range from transparent and flexible food packaging, fishing lines and nets, cable sheathings, textile fibers for outdoor sportswear, and carpets, to lightweight components for cars.

Pryor UAN plant offline another 60 days; repairs underway on Dakota Gas NH3 plant

Ammonia, Featured, Midwest, News, UAN

LSB Industries Inc. said April 25, 2012, that its Pryor, Okla., UAN plant will be offline for repairs for at least another 60 days. The company said the repair period is being extended because it has determined that the damaged portion of the urea reactor, which is the reactor’s stainless steel liner, is non-repairable and the liner has to be replaced. The company will announce when UAN production resumes.

The Pryor facility shut down March 15 for unplanned maintenance at the ammonia plant (GM March 26, 2012). The ammonia plant resumed production March 22 and has produced approximately 600 st/d, which is being sold directly into the fertilizer market. The repair undertaken at the urea plant began Feb. 27. The urea plant is needed to produce UAN and uses ammonia as a feedstock. As a result, the Pryor facility has not produced UAN since Feb. 27. Annual UAN capacity at Pryor is approximately 416,000 st/y, or 34,666 st per month.

For the month of March, LSB estimates that the downtime resulting from the attempted repair of the urea reactor will result in approximately $4 million less operating income than otherwise would have been expected. In addition, in March the company accrued $3 million for probable losses for UAN tons that were pre-sold at firm sales prices, subject to make-whole terms, but not delivered due to the extended urea plant downtime.

Subsequent to March and until the urea plant is back in production, the company estimates the downtime will result in approximately $900,000 per week less operating income than if the urea plant was in production. The company has made a claim with its insurance carriers for repair costs and lost profits, less applicable deductible.
And in North Dakota, a spokesman for Dakota Gasification told Green Markets on April 26 that repairs are underway on the company’s anhydrous ammonia plant in Beulah, N.D., which went down April 14 due to a fire caused by a tube leak in the plant’s heater (GM April 23, 2012). The fire was quickly extinguished by an onsite fire crew, and no injuries or ammonia releases were reported.

“We’ve identified what it is, and now it’s just a matter of getting it fixed,” said Daryl Hill, supervisor of media and communications relations for Dakota Gas. Hill cautioned, however, that the company has established no definitive timeline for how long those repairs will take or when the ammonia plant will return to production.
The ammonia plant at Beulah produces 1,100 st/day, or some 400,000 st/year, at full capacity. The facility’s gasification plant was unaffected by the fire, as was the flue gas desulfurization system that produces ammonium sulfate at the Beulah facility.

PotashCorp 1Q income off 33 percent; company says 2Q may break earning records

Featured, News, Potash Muriate

After a 33 percent drop in first-quarter net income due to a lull in potash sales, Potash Corp. of Saskatchewan Inc. President and CEO Bill Doyle said buyers are now fully engaged. “Despite a just-in-time buying pattern that slowed demand in recent months, fertilizer buyers are now fully engaged and demand for our products, especially potash, is expected to improve as the year progresses.” The company said that while the initial focus for many buyers was to acquire nitrogen, that the purchasing of potash and phosphates accelerated as the industry moved into the second quarter.

Net income for the first quarter ending March 31, 2012, was $491 million ($.56 per diluted share), compared to the year-ago $732 million ($.84 per share). The company cited lower potash sales and production volumes, which resulted in higher costs. Company-wide sales dropped to $1.75 billion from the year-ago $2.2 billion.

Potash sales volumes were off some 55 percent to 1.25 million mt during the quarter, versus the year-ago 2.79 million mt. The drop was seen in all markets, and significant relief did not appear until toward the end of the quarter, when Canpotex inked a new deal with China. PotashCorp first-quarter offshore sales tons were 849,000 mt, down from the year-ago 1.7 million mt, while North American tons were 400,000 mt, down from 1.1 million mt.

Despite the decline in tons, PotashCorp average realized sales prices saw no decline, only increases from the year-ago level. The average potash price for the quarter was $435/mt, up from the year-ago $366/mt. The offshore price was $406/mt, up from $327/mt, while the North American price was $497/mt, up from $427/mt. The company had some 29 inventory-related downtime weeks at its Lanigan, Rocanville, and Allan, Sask., facilities during the quarter. The company opted not to lay off workers. Cost per ton moved up to $175/mt from $100/mt. Gross margin per ton was off slightly, to $260/mt from $266/mt.

First-quarter potash margins were off 42.5 percent, to $327 million on sales of $583 million from the year-ago $743 million on sales of $1.11 billion.

For phosphates, international sales and a diversified portfolio helped offset a weaker North American fertilizer market. Gross margins moved up slightly, to $152 million on sales of $613 million from the year-ago $150 million on sales of $549 million. Sales volumes of 930,000 mt were up from 893,000 mt. Fertilizer volumes were 637,000 mt, up from 604,000 mt, while feed/industrial volumes were 293,000 mt, up from 289,000 mt. The averaged realized phosphate price climbed to $607/mt, up 9 percent from the year-ago $559/mt. The average fertilizer price was $570/mt, up from $542/mt, while the average feed/industrial price was $686/mt, up from $594/mt. Cost per ton sold moved up to $447/mt from $395/mt. Gross margin per ton was off slightly, to $160/mt from $164/mt.

Nitrogen margins climbed to a first-quarter record of $219 million on sales of $550 million, compared to the year-ago $203 million on sales of $546 million. Sales volumes of 1.3 million mt were slightly below the year-ago 1.34 million mt, largely the result of reduced production at Geismar, La. The average realized nitrogen price was $383/mt, up 4 percent from the year-ago $368/mt. The company noted that strong demand for urea, UAN, nitric acid, and ammonium nitrate combined with limited supply to push up prices. Urea volumes and prices were both up, at 334,000 mt and $462/mt, versus the year-ago 331,000 mt and $416/mt. While ammonia volumes were up slightly to 516,000 mt from 514,000 mt, prices dipped to $447/mt from $474/mt. Other nitrogens – UAN, nitric acid, and ammonium nitrate – had a combined drop in volumes to 440,000 mt from 495,000 mt, but recorded a combined price increase, to $249/mt from $226/mt. Cost per ton was level with the year-ago figure at $223/mt.
Gross margin per ton was up, at $16

Compass Minerals – Management Brief

Management Briefs

Compass Minerals has appointed Shelly Kinnune vice president and general manager of its specialty fertilizers business. In this role, she will lead the company’s Great Salt Lake Minerals and Big Quill Resources subsidiaries, with responsibility for directing the production, sales, and marketing of the company’s specialty fertilizer products, including overseeing the development of new markets and applications, as well as managing the company’s multi-phased expansion program at the Great Salt Lake. She will also serve on Compass Minerals’ leadership team. The appointment is effective May 7, 2012.

Kinnune joins Compass Minerals from Syngenta, where she most recently served as head, permanent crops portfolio. Her 18 years of experience also include serving as horticulture business unit head for SePRO Corp., a manufacturer and marketer of value-added products for specialty crops; marketing management roles with Monsanto; and operations and finance leadership roles in emerging businesses. She holds an MBA from Marylhurst University and a B.S. degree in chemical engineering from Oregon State University.

Kinnune replaces Ron Bryan, who began a retirement process that commenced in January of this year with a transition to a part-time role as vice president, strategic projects.

Brandt Monterey – Management Brief

Management Briefs

Brandt Monterey, a manufacturer and distributor of agricultural specialty products, has named William Ogelsby to its management team as vice president of business development. Ogelsby will work from the company’s west coast operations, and will report to John Salmonson, president of Brandt Monterey, and Jim Tuttle, national sales director. Ogelsby’s previous experience includes more than ten years as west regional manager at Arysta LifeScience, with responsibility for eight states. Prior to that, he was a territory manager with Griffin and a farm manager for Waikele Farms in Hawaii. Brandt Monterey is part of Brandt’s Specialty Formulations Business, offering products for conventional and organic agriculture, lawn and garden, animal feed, turf, and hydrology.

Construction begins on Intrepid mine

News, News Briefs, Potash Muriate, Western

Denver — Intrepid Potash Inc. said April 26 that it has begun construction of the HB Solar Solution mine near Carlsbad, N.M., noting that a Bureau of Land Management Record of Decision was granted March 19, 2012 (GM April 2, p. 10). Intrepid said the ROD became final this month. "We are very pleased to have begun construction of our HB project after more than three years of the BLM’s careful review and study of the project’s environmental impacts,” said Intrepid Executive Chairman Bob Jornayvaz. “This project is a game changer for Intrepid that will allow us to capitalize on our solution mining and solar evaporation expertise that we have developed from our current operations in Moab and Wendover, Utah. The HB Solar Solution mine will be one of the lower-cost potash mines in North America, with cash costs estimated to be between $60 and $80 per ton, improving our overall cost profile and margin opportunity. We also expect the mine to increase our potash production by approximately twenty-five percent." Intrepid expects to invest $200-$230 million to construct the mine, with approximately $35.3 million invested to date. It expects the first production in late 2013 following the initial evaporation season, with increasing production in 2014, and a ramp-up to full production expected in 2015, assuming the benefit of average annual evaporation cycles applied to full evaporation ponds. The estimated annual production from the mine is expected to be 150,000-200,000 st of potash. The mine was formerly operated as a conventional underground potash mine and was idled in 1997 by its previous owner. Intrepid will use the same solar evaporation and solution mining technology that it currently uses at Moab, Utah. The mine has 5 million st of proven and probable reserves, and an estimated mine life of 28 years. Intrepid owns five active potash production facilities – three in New Mexico and two in Utah. The new mine will increase the number to six.