All posts by webster@kennedyinfo.com

ADM, Wilmar to work together

Breaking Industry News

Archer Daniels Midland Co. and Wilmar International Ltd. have announced the signing of a memorandum of understanding, indicating their intent to work together in a strategic partnership in global fertilizer purchasing and distribution, global ocean freight operations, and tropical oils refining in Europe.

Collaborations between ADM and Wilmar began in the mid-1990s, when they jointly built a network of soybean processing operations in China. Today, ADM owns a 16 percent equity stake in Wilmar. The companies have significant supplier relationships with each other.
 
The recent memorandum of understanding says that: in the global fertilizer business, the companies will collaborate on purchasing and distribution; in ocean freight, they will partner to improve the utilization and management of their shipping fleets, with each company initially contributing two ships to the effort; and in tropical oil refining in Europe, they will work together to optimize refining capacity utilization. The memorandum of understanding is subject to the execution of definitive agreements with respect to the strategic partnership. ADM and Wilmar will look to finalize the definitive agreements over the next few months.

ADM Chairman and CEO Patricia Woertz said, "We have an excellent relationship with Wilmar’s leadership, and we see Wilmar as a key partner, especially in our strategy to serve growing Asian demand for agricultural products. Our teams are currently working together on many projects, and we look forward to finding more opportunities to work with our friends and partners at Wilmar."

Mr. Kuok Khoon Hong, Wilmar’s Chairman and CEO, said, "Our long association with ADM and the ability of both companies to tap on each other’s synergies, helped build our successful Asian operations. It is now the intention to extend that co-operation globally, initially in the areas outlined in our memorandum of understanding."

Today, 30,000 ADM employees around the globe convert oilseeds, corn, wheat and cocoa into products for food, animal feed, industrial and energy uses. With more than 265 processing plants, 400 crop procurement facilities, and the world’s premier crop transportation network, ADM helps connect the harvest to the home in more than 160 countries. For more information about ADM and its products, visit www.adm.com.

Wilmar, founded in 1991 and headquartered in Singapore, claims to be Asia’s leading agribusiness group. Wilmar is ranked amongst the largest listed companies by market capitalization on the Singapore Exchange.

Wilmar’s business activities include oil palm cultivation, oilseeds crushing, edible oils refining, sugar milling and refining, specialty fats, oleochemicals, biodiesel and fertilizers manufacturing and grains processing. At the core of Wilmar’s strategy is a resilient integrated agribusiness model that encompasses the entire value chain of the agricultural commodity processing business, from origination and processing to branding, merchandising and distribution of a wide range of agricultural products. It has over 300 manufacturing plants and an extensive distribution network covering China, India, Indonesia and some 50 other countries. The Group is backed by a multinational workforce of more than 90,000 people.

Agrium plant to be offline for eight weeks

Breaking Industry News

Agrium Inc.’s Carseland, Alberta, nitrogen plant is expected to be down for about eight weeks for repairs. It was down earlier this year for two-three weeks.

The complex went down Feb. 20 due to a problem with a high pressure heat exchanger in the urea unit. While this would have taken only about three weeks to repair, Agrium is opting to move forward a planned six week Carseland turnaround for July-August to coincide with the current outage. As a result, the facility may be down for up to eight weeks.

Ed Wheeler passes away

Breaking Industry News

Green Markets has just learned that industry veteran and former president of The Fertilizer Institute, Edwin M. Wheeler Sr., 85, passed away at his home in Sarasota, Fla., Feb. 18.

A memorial service will be held on Friday, Feb. 24th at 1:30 p.m. at All Angels by the Sea Episcopal Church. Interment will be in Marion, Kansas, at a later date.

Survivors include his wife of 61 years, Rosalie; two sons, Edwin M. Wheeler, Jr. and his wife Cheryl of Marion, Kansas and Christopher Wheeler and his wife Helene of Bethesda, Md.; a sister, Suzanne Watt of Naperville, Ill.; grandchildren, John, Jason and Natalie; step-grandchildren, Zachary and Skylar.

He was a veteran of the U.S. Army. Military experience 1944-1947, 2nd Lt. 1945-1947, 1st Lt. 1947-1952, Captain-Honorable Discharge 1952. He graduated from Washburn University School of Law and was admitted to the Kansas Bar in 1955.

Memorial contributions may be made to All Angels by the Sea Episcopal Church or to St. Luke Hospital, Marion, KS.

Arrangements by Toale Brothers Funeral Home.

PotashCorp extends curtailments

Breaking Industry News

Potash Corp. of Saskatchewan Inc. announced Feb. 22 that consistent with its practice of matching supply with market demand, notice was given to Rocanville and Lanigan employees of the following potash inventory adjustments:

Rocanville will remain temporarily closed for up to an additional four weeks to March 31, 2012.

Lanigan will remain temporarily closed for up to an additional four weeks to March 31, 2012.

Careers

Uncategorized

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Careers – Director of Client Acquisition

Green Markets, the most trusted, widely read publication for fertilizer pricing, business news and market activities seeks a motivated sales professional with demonstrable success and experience in agri-chemicals sales/marketing.
Recent investments in the Green Markets business have accelerated growth prospects. This new role offers an exciting opportunity to take the lead on expanding the influence of Green Markets through new Client acquisition.

Primary Responsibilities:

  • A “Client-First” philosophy; ultimate respect for Green Markets Customers
  • Identify, qualify, solicit and close new business relationships through primarily phone as well as email engagement of prospective Clients
  • Develop new business in terms of single and corporate (multi-user, multi-site) subscriptions to the core Green Markets periodical
  • Track sales activities that generate visibility into qualification criteria, sales cycle, and lead generation effectiveness
  • Support business strategy by organizing sales activities by Vertical industry, Geographic location, Product applicability

Secondary Responsibilities:

  • Develop new business associated with ancillary Green Markets products and services such as Consulting/Advisory Projects, Custom Market Research
  • Represent Green Markets at trade and association events and conferences

Job Requirements for the position include:

  • Superior verbal and written communications skills, a proven track record of sales achievement, personnel management skills, and excellent PC skills
  • High productivity level of sales activities
  • Expertise in sales techniques (both strategic and tactical) and high skill level in customer relationship management and engagement
  • Demonstrable capability and experience in all sales communications media (phone, web, email, social media)
  • Demonstrable capability and experience in account management/sales force automation software
  • Strong organizational, administrative and time-management skills
  • Responsive at all times to the needs and wants of clients but with an understanding of the financial or business implications of any contractual agreements
  • The ability to work independently to achieve his/her goals
  • Developing effective, trusted working relationships with members of management and peers within the organization
  • Contribute the client perspective and market needs to direct the success of the company
  • Contribute to all budgeting and forecasting processes associated with sales activity

Education and Experience:

  • Bachelor’s Degree or equivalent
  • Minimum 5 years of direct sales experience
  • Proven track record of sales success
  • Client references

Special Requirements:

  • Minimal travel required

Location:

  • This position can be located at any of the parent company offices in New York City, Arlington Virginia, or the headquarters in idyllic Keene, New Hampshire. Home office accommodations will also be considered in other geographic locations.

Iowa seeks to lure OCI nitrogen plant

Breaking Industry News

The Iowa Economic Development Authority (IEDA) board has awarded financial assistance to a project to build a major nitrogen plant in Wever, Iowa, by Iowa Fertilizer Co., a unit of Eqypt’s Orascom Construction Industries.

"I am very excited to announce that with action today from the Iowa Economic Development Board, Iowa is one step closer to landing the largest capital investment project in the history of the state of Iowa," said Governor Terry Branstad.

"In addition to the significant investment Iowa Fertilizer Company’s proposed project would make in southeast Iowa, it will also bring good, high-paying jobs to an area of our state that has had its share of challenges," said Lt. Gov. Kim Reynolds.

The IEDA Board approved direct financial assistance as well as tax incentives for a proposed project to build a new large-scale fertilizer plant in Wever, located in Lee County. The company is also expected to receive local financial assistance from Lee County and the IDOT board will consider infrastructure assistance. The new plant would supply ammonia and other nitrogen fertilizers to farmers in Iowa and the Midwest. The project represents an investment in excess of $1 billion and is expected to create 165 permanent jobs.

In addition to the permanent jobs the project would create, approximately 1,500-2,000 construction-related jobs would also be expected. Debi Durham, director of the Iowa Economic Development Authority, said, "Iowa Fertilizer Company’s proposed project could have a huge impact for our entire state that will benefit us for years to come.
Economic development takes many forms but is best achieved when the assets of the location align perfectly with the strengths of the company making the investment." She continued, "That is exactly why it is essential we have the right tools to continue to compete for global projects of this magnitude."

OCI told Green Markets that it has received an offer for investment incentives from the Iowa Economic Development Authority. “The project is among several projects under consideration that have yet to be discussed by our board,” said an OCI spokesperson. “We will be making no further statements until the board comes to a decision.”

U.S. Nitrogen to break ground on new plant Feb. 17; completion expected in 2013

Ammonia, Ammonium Nitrate, Featured, Midwest, News

While several major nitrogen producers have held back on U.S. greenfield nitrogen plant development, one smaller player on the explosives side of the business, Austin Powder Co., Cleveland, Ohio, via its subsidiary U.S. Nitrogen LLC, is planning to break ground on its new $160 million facility Feb. 17, as Green Markets goes to press. And unlike others concerned about achieving regulatory approval, U.S. Nitrogen received zoning almost immediately and then went on to receive all permits necessary to begin construction within about one year of making its initial announcement (GM Feb. 28, 2011).

The project, in the small town of Mosheim in northeastern Tennessee, received the last of its permits in January. Site preparation has been underway for some time, and locals will gather on Feb. 17 for an official ground-breaking. Completion is now expected in 2013.

The facility is being built to produce liquid ammonium nitrate (AMSOL or ANS), with some 420 st to be produced per day. The company has assured the locals that the product is not flammable and will not be explosive at the site. Austin plans to ship it to its manufacturing sites in Ohio and elsewhere for further upgrading into explosives. Austin said the site is within a 250-mile radius of 70-75 percent of its customers, and is located one mile off Interstate 81 and not far from I-40, I-75, and I-74. A Norfolk Southern Railroad track adjoins the property, and a rail link will be built into the plant. The company expects to send some 20 truckloads of product out of the plant each day, and will also ship product out by rail.

The East Tennessee Gas Co. has a pipeline only one mile away that will provide the company’s gas supply, which will reportedly cost more than $20 million per year. Market watchers have noted that natural gas prices are so low that this has made it more economical for the company to build ammonia production rather than to source ammonia on the market.

Some five buildings, including an anhydrous ammonia (200 st/d) facility and a nitric acid plant (330 st/d), will be constructed on the 400-acre site. It will include a two-three story cooling tower. The facility will only take up about 50 acres of the site –the rest will be used as a buffer and wildlife habitat, with a plan for that being developed by the Tennessee Wildlife Federation.

The plant is expected to create some 80 full-time permanent jobs in a county that had an unemployment rate of 10.8 percent as of December 2011. The annual payroll is expected to be $4 million. S&B Engineers and Constructors, Houston, is the general contractor. The construction phase will require 120 full-time skilled workers.

The local Greene County Commission on Feb. 22, 2011, voted unanimously to approve the site’s rezoning from agricultural and industrial to heavy industrial.

Despite the quick progress, a lawsuit was filed against the project in April 2011 (GM April 11, 2011), faulting local zoning officials and county commissioners for hastily approving the plant without giving proper notice to the community. Neighboring landowners also argued that it would lower their property values. Austin officials responded that they would have no problem having their own grandchildren live next door to the plant. Although there have been a few contentious public meetings, to date neither these nor the lawsuit have stopped the plant from progressing.

CF reports record earnings; cuts phosphate production, locks in low gas costs

Featured, News, Phosphate Rock

CF Industries Holdings Inc., in releasing record earnings for the fourth quarter and year ending Dec. 31, 2011, confirmed that it has curtailed phosphate production in the first quarter. CF said it did so by advancing the timing of scheduled plant turnarounds. It said plans for the turnarounds were finalized in December in recognition of the then-prevailing market imbalance.

CF told analysts the curtailment was roughly in line with those announced by other U.S. producers on a percentage basis. CF did not return calls to further quantify the amount, but this would roughly equate to 66,000 st based on The Mosaic Co.’s earlier announced curtailment of 250,000 mt.

CF reported net earnings attributable to common stockholders of $438.9 million ($6.66 per diluted share) on sales of $1.72 billion for the fourth quarter ending Dec. 31, 2011, compared to the year-ago $200.3 million ($2.78 per share) on sales of $1.24 billion. EBITDA was $870.6 million, compared to the year-ago $499.5 million.

CF said that it was able to enter the fourth quarter with a large order book reflecting attractive forward prices contracted earlier in the year. As a result, these allowed it to bridge the extended lull in demand that many sellers experienced during the quarter – at least for nitrogen.

Fourth-quarter nitrogen tonnage was almost level with year-ago levels – 3.34 million st versus the year-ago 3.35 million st. UAN was the saving grace, with tonnage up at 1.57 million st versus the year-ago 1.45 million st. Other major nitrogens saw a fall-off in tonnage during the fourth quarter.

The company said the fall direct application season for ammonia benefited from mild weather and a long application window. Volumes were 874,000 st with an average price of $633/st, versus the year-ago 917,000 st and $452/st. The company said the volume fall-off was due to industrial ammonia, with direct application on par with year-ago levels. Positive ammonia movement even transitioned over into January – particularly in Kansas, Missouri, Iowa, and Nebraska.

Phosphate sales volumes did see a lull in North America, where tonnage moved down to 240,000 st from 393,000 st. Export tons, however, were up, at 199,000 st from 84,000 st. Total tons were 439,000 st, down from 477,000 st.

Fourth-quarter nitrogen gross margins were $786 million on sales of $1.46 billion, up from the year-ago $420.6 million and $1 billion, respectively.

Fourth-quarter phosphate gross margins were $79.2 million on sales of $255.3 million, up from the year-ago $63.3 million on sales of $235 million.

For the year, CF reported net income of $1.54 billion ($21.98 per share) on sales of $6.1 billion, compared to the prior year $349.2 million ($5.34 per share) on sales of $3.96 billion. Pre-tax results did include $77.3 million of non-cash mark-to-market net losses on natural gas derivatives, a $34.8 million impairment charge due to the permanent shutdown and removal of the methanol plant at Woodward, Okla., $34.5 million of gains on asset dispositions, $24.3 million in business combination costs, and $1.2 million in Peru project development costs.

“We enjoyed a position of competitive strength because of the combination of high global prices for commodities, declining natural gas costs in North America, and our advantageous business configuration,” said Stephen Wilson, CF chairman and CEO. “Our achievement of $3 billion of EBITDA in 2011 is a testament to the company’s powerful business model and great execution.” 2010 EBITDA was $1.1 billion.

2011 saw record sales volume at 14.9 million st, including a record 13 million st of nitrogen products.

Full-year nitrogen gross margins were $2.56 billion on sales of $5 billion, up from 2010’s $1 billion on sales of $3.19 billion. Full-year phosphate gross margins were $332.4 mi

Icahn announces tender offer for CVR; nominates nine for company board

Featured, News

Billionaire investor Carl Icahn announced a tender offer Feb. 16 through one or more of his affiliated companies for all of the outstanding shares of common stock, and related stock purchase rights, of CVR Energy Inc., Sugar Land, Texas. CVR owns two refineries and majority ownership in CVR Partners LP, which owns a nitrogen plant in Coffeyville, Kan.

Tendering shareholders will be paid $30 per share in cash, plus a contingent value right. The right will entitle holders to an additional payment, in cash, equal to the value that the company is sold for in excess of $30 per share.

Icahn also announced his intent to nominate a slate for all nine directorships on the CVR board of directors. They include Bob Alexander, SungHwan Cho, George Hebard III, Vincent Intriei, Samuel Merksamer, Stephen Mongillo, Daniel Ninivaggi, James Strock, and Glenn Zander.

As was reported in a Green Markets Alert Feb. 13, Icahn, who owns about 14.53 percent of CVR personally or via his affiliates, believes that CVR should be put up for sale. He told CVR Chairman, CEO, and President Jack Lipinski this on Feb. 13. According to Securities and Exchange Commission filings, Lipinski said he would take the suggestions under advisement and discuss them with his board.

CVR on Feb. 16 acknowledged that it had received the Feb. 16 notice from Icahn Partners LP of its intent to initiate an unsolicited tender offer to acquire all of the outstanding shares of CVR. The company said Icahn has not commenced a formal tender offer, nor has he indicated when he will do so. In addition, it noted that Icahn has also given the company notice that he intends to nominate nine directors – five of whom are employees of Icahn – to the company’s board at the next annual meeting, and to submit a shareholder proposal. CVR said its board will review all of Icahn’s actions and respond as appropriate in due course.

Icahn says if the current board puts CVR up for sale before the initial expiration date of the tender offer (expected to be on or about March 23), then Icahn reserves the right to withdraw the tender offer and proxy fight. However, if CVR is not put up for sale, he will proceed with the tender offer and proxy fight in an effort to elect a new board that will have a shareholder mandate to sell the company.

Closing of the tender offer will not be subject to any due diligence or financing conditions. The tender offer will be subject to there being validly tendered and not withdrawn at least 35.76 percent of the issued and outstanding CVR shares. That number of shares, when added to the shares already owned by Icahn and affiliates, represents a majority of the issued and outstanding shares. The tender offer will also be conditioned upon the election of the Icahn slate of directors, the elimination of CVR’s poison pill (which the Icahn directors intend to do upon their election), and other typical conditions. The tender offer will include withdrawal rights so that a tendering shareholder can freely withdraw any shares prior to the acceptance of such shares for payment under the tender offer.

In the event that a definitive agreement for the sale of CVR is executed within nine months following the closing of the tender offer, all tendering shareholders whose shares were purchased in the tender offer will receive an additional cash payment, through a non-transferable contingent value right, equal to the amount (whether in cash or securities) in excess of $30 per share for which the company is sold. Shareholders whose shares are purchased in the tender offer are thus guaranteed a minimum payment of $30 per share – plus upside potential.

"We are launching this tender offer and proxy fight to provide shareholders the opportunity to obtain the value that we believe can be obtained in a sale of the company,” said Icahn. “We are offering shareholders a minimum

Ammonia

Ammonia, Black Sea, Eastern Cornbelt, Great Lakes, Market Watch, Middle East, Northern Plains, Tampa, U.S. Gulf, Western Cornbelt

U.S. Gulf/Tampa: Ammonia remained under pressure, with sources expecting March to be more in line with the recent spot sale of $400/mt CFR. In the meantime, sources said the most recent NOLA sale was $430-$435/st FOB.

U.S. ammonia imports were off 21 percent for December, according to the U.S. Department of Commerce, to 533,638 st from the year-ago 674,420 st. July-December imports were off 7 percent, to 3.64 million st from the year-ago 3.91 million st.

Eastern Cornbelt: Sources tagged the prompt ammonia market at $660-$675/st FOB regional terminals to the dealer, with the low reported in the Illinois market.

Field activities in the region remained limited due to wet conditions. An Illinois source acknowledged this his location has lacked the typical winter snowfall, but rainfall has been steady. He said there was some ammonia movement there in December, but most field activities have been stalled since then due to soggy conditions.

Western Cornbelt: The anhydrous ammonia market was tagged at $620-$650/st FOB regional terminals last week, with the upper end in Missouri and the low in Nebraska and Iowa. Delivered ammonia in the Missouri market was pegged in the $640-$650/st range from southern production points.

Northern Plains: Minnesota sources quoted the anhydrous ammonia market in the $620-$650/st FOB range, depending on location. Delivered ammonia in North Dakota was reported at the $750/st level for spring prepay tons.

The lack of snowfall, combined with mild temperatures, continued in the Northern Plains last week. Local reports said the southern half of Minnesota had either bare ground or just a dusting of snow by mid-February, while northern areas of the state have snow levels ranging from three to ten inches. “We are going to need some moisture,” said one Minnesota contact. “If not snow, maybe some healthy rains in March and early April.”

Great Lakes: The anhydrous ammonia market was pegged at $675/st FOB in the Wisconsin market for spring tons, with Michigan sources quoting the dealer price for prompt tons in the $680-$690/st FOB range, depending on location.

Most locations reported muddy field conditions that were too soft to support machinery, but there was some spreading activity underway in parts of southern and eastern Michigan last week. Most sources were confident that activity will heat up in late February if winter weather remains unseasonably mild in the region, and dealers were getting equipment ready in preparation for an early start to spring plant. For now, however, growers were said to be “a little sluggish” in placing orders.

Black Sea: The soft ammonia market and high natural gas prices continue to gang up on producers. OPZ remains closed, and will most likely stay closed for the rest of the month.

Sources are hard pressed to find new sales out of the area. Material moving out is under contract with pricing based on agreed-to formulas.

Australia: Once again, Orica is in a holding pattern. Asian sources say the plant is not expected to begin re-start procedures until next month. Sources add that the company may slow down production on those portions that require ammonia.

A cargo is slated to arrive this week or next. Earlier sources had predicted Orica would be looking for another cargo for early March delivery. So far, said one Asian trader, no inquiries have been made.

Middle East: The regional market remains soft, largely because of reduced demand from India and Southeast Asia.

At least one main Indian buyer is taking the month of March off for routine maintenance. Other Indian buyers and most of the Southeast Asian custom