Pinnacle Agriculture Holdings LLC has added two more acquisitions to its growing retail distribution network. The company announced on May 21 that it had picked up the seed, fertilizer, and crop protection assets of Uvalde County Farmers Co-operative in Knippa, Texas, and on May 23 reported that it had acquired Performance Ag Services LLC in Aberdeen, S.D.
Originally formed as a non-profit association with 38 members in 1975, Uvalde is a farm input and supply company that has grown to 114 active members in the Winter Garden areas of Texas. The company is a certified public grain warehouse engaged in buying and selling wheat, grain sorghum, corn, and sesame, and is also the largest domestic provider of sesame for Sesaco Corp. Pinnacle said Uvalde will operate as part of its Sanders brand, and will enhance Sanders’ retail presence in the southern Texas market.
Uvalde will remain at its present location at 209 West Main Street in Knippa, and will be managed by Bonnie Turner. Turner’s background includes seven years with Crop Production Services Inc. and ten years with Helena Chemical Company. All other employees of Uvalde Co-op will retain their current positions under the new ownership.
The Knippa business will be Sanders’ 23rd Texas retail location offering custom fertilizer blends, seed, and crop protection products, as well as precision agriculture services through Sanders’ proprietary OptiGro® system.
Performance Ag Services is a supplier of crop protection chemicals that has been in business since 2003. Although headquartered in Aberdeen, the company expanded to include four additional locations in Mobridge and Winner, S.D., Wishek, N.D., and Conrad, Mont. Performance Ag will operate as part of Pinnacle’s Providence Agriculture brand.
The current employees of all five Performance Ag locations will retain their positions under the new ownership, and Kurt Schentzel will continue to manage all sales staff. The business will continue to service retail and wholesale accounts from the present locations at 38420 U.S. Highway 12 in Aberdeen; 1324 East Grand Crossing in Mobridge; 31710 Harvest Road in Winner; 4129 Highway 13 SE in Wishek; and 711 South Virginia Street in Conrad.
Performance Ag and Uvelde Co-op bring the total number of Pinnacle retail acquisitions to 11 since March, and expand Pinnacle’s retail distribution network to 20 states. Pinnacle was formed in 2012, and operates through its Sanders, Providence Agriculture, AgOne Application Services, and Innvictis brands. Its operations include seed production and sales, agricultural chemical distribution, bulk handling of fertilizer, precision agriculture services, and general merchandise for the farming, livestock, and wildlife industries.
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Gavilon Fertilizer LLC announced on May 20 that its microSource micronutrient facility in Shakopee, Minn., is fully operational following a recent construction project. The 17-acre facility was expanded to include a dry product warehouse, indoor and outdoor liquid storage, automated packaging, quality control/product development laboratory, and room for future expansion.
“The goal when we began this project was to create a world-class production facility that could meet customers’ high-volume, peak-season needs,” said Kipp Smallwood, director of sales and operations for microSource. “This facility allows us to deliver in-furrow micronutrients and complete nutritional starter fertilizer to meet the growing demand across the northern and central plains.”
Gavilon offers a variety of micronutrients and specialty fertilizers to retail and wholesale distributors under its microSource division, which was launched in August 2011 to expand the company’s line of dry and liquid micronutrients, foliar, and liquid starter fertilizers. The microSource division is based in Denver, Colo.
“The investment in the Shakopee facility reinforces our commitment for future growth in the specialty fertilizer market, in our microSource division, and across over 70 Gavilon Fertilizer locations,” said Brian Harlander, Gavilon president.
Headquartered in Savannah, Ga., Gavilon Fertilizer has business operations in the U.S., Mexico, Peru, and South Africa. It operates as a subsidiary of The Gavilon Group LLC, Omaha, Neb., which is a wholly owned subsidiary of Marubeni Corporation, Japan. Gavilon employs 1,900 people in 300 facilities and offices worldwide.
Louisiana Governor Bobby Jindal and CEO Mark VandeVoorde of AM Agrigen Industries announced May 19 that Agrigen has selected a St. Charles Parish site in Killona, La., to develop a potential $1.2 billion plant to manufacture granular urea and anhydrous ammonia.
Feasibility studies on the project are underway, and the company expects to make a final investment decision in the first quarter of 2015. With a final investment decision, AM Agrigen would create 150 new direct jobs with an average annual salary of $55,000 per year, plus benefits. Louisiana Economic Development (LED) estimates the project would result in an additional 1,025 new indirect jobs, for a total of 1,175 new jobs in the state.
Construction would begin in mid-2015, with the fertilizer-manufacturing complex taking approximately 30 months to complete. AM Agrigen Industries plans to tap a mix of global and domestic investors to fund the project, making the St. Charles Parish fertilizer complex the latest in a series of major foreign direct investment projects to select Louisiana.
Gov. Jindal said, “AM Agrigen’s commitment to our state demonstrates the strategic value of Louisiana’s world-scale industrial infrastructure and our emergence as one of the very best business climates in the U.S. From Sasol in Southwest Louisiana to Benteler Steel/Tube in Northwest Louisiana and Dyno Nobel in Southeast Louisiana, global investors are infusing tremendous amounts of capital into our state’s manufacturing sector because of Louisiana’s welcoming business environment and strong workforce. As this project crystallizes, we look forward to the creation of more highly skilled jobs that build ever-increasing career opportunities for the families of Louisiana."
In Louisiana, LED notes AM Agrigen Industries can tap the highest density of interstate and intrastate natural gas pipelines in the U.S., along with low, stable prices on an abundant supply of natural gas – the key raw material for producing nitrogen-based fertilizer. AM Agrigen would produce granular urea for agribusiness customers in domestic and global markets.
“We have been very pleased with the support we have received from the State of Louisiana – and from St. Charles Parish, GNO Inc. and the Port of South Louisiana,” VandeVoorde said.
LED began working with AM Agrigen on the project in October 2012. To secure the project, Louisiana offered the company a performance-based $5.6 million grant to offset infrastructure costs of the project. AM Agrigen would receive the comprehensive workforce solutions of LED FastStart® — ranked as the No. 1 state workforce training program in the nation. The company also is expected to utilize the state’s Quality Jobs and Industrial Tax Exemption programs.
AM Agrigen has secured options to purchase 650 acres near Killona in St. Charles Parish for the project, and the company has initiated the process of filing for environmental permits needed to operate the proposed facilities.
“We are excited about the new opportunities presented by bringing a new type of industry to St. Charles Parish, including the addition of new jobs,” St. Charles Parish President V.J. St. Pierre said. “AM Agrigen is a company that brings high-caliber leadership, a commitment to safety and a strong desire to become a model corporate citizen in the St. Charles Parish community.”
“Through our many months of working together, we have come to greatly respect AM Agrigen Industries and their leadership team,” GNO Inc. President and CEO Michael Hecht said. “Agrigen will be an outstanding addition to greater New Orleans, bringing jobs, investment and expertise to our region.”
AM Agrigen Industries LLC is a Delaware-registered company founded in July 2013
Tel Aviv—Israel Chemicals Ltd.’s ICL Fertilizer segment reported operating income of $180 million on sales of $933 million for the first quarter ending March 31, compared to the year-ago $293 million and $1 billion, respectively. ICL reported record sales of potash and phosphates during the quarter on a volume basis, but this was offset by lower prices. In addition, there was continued growth in specialty fertilizer sales. ICL said lower potash and phosphate prices, increased cost of sales, and operating expenses were partially offset by a drop in energy prices due to the greater use of natural gas. ICL said that the labor dispute at Rotem Amfert, which included a three-week strike, had a $7 million impact on operating income and would have an additional $11 million impact in 2014. ICL sold a record 1.47 million mt of potash in the first quarter, compared to the year-ago 1.31 million mt, which was attributed to higher volume sales to China, Brazil, and Europe. Despite the strike at Rotem Amfert, it sold a record 525,000 mt of phosphate fertilizers in the first quarter. Phosphate sales were put at $465 million, up from $460 million. Company-wide, Israel Chemicals Ltd. had a 57 percent drop in first-quarter net income, to $131 million on revenues of $1.61 billion, compared to the year-ago $305 million and $1.64 billion, respectively.
An Israeli government appointed panel has recommended a “windfall tax” on natural resources including potash and other raw materials from the Dead Sea. The panel issued its interim report May 18. The 42 percent surtax on excess profits would be levied on net profits above an 11 percent return on investment. Israel Chemicals Ltd. would be the hardest hit by the recommendations.
The committee also called for a uniform 5 percent royalty level. This would replace royalties on natural resources that currently range from 2-10 percent. The committee was appointed last year by Finance Minister Yair Lapid to reassess the tax regime on natural resources excluding oil and gas. The proposals would cost ICL an estimated $120 million in additional taxes annually. ICL shares fell on May 18 by 2 percent following the issuing of the interim report and shares of Israel Corp., the holding company which owns a majority stake in ICL, were down by 3 percent.
The interim report recommended that the new tax regime come into effect in 2017, and not when the legislative process is concluded by the Knesset. The report said this could give ICL time to adjust to the proposed changes. A final committee report is due out in a few months and this will be followed by government approval and then passage of a law by the Knesset.
In response to the recommendations ICL said it was freezing all planned investments in Israel totaling over $1 billion until the issue of increasing taxes on the company is resolved. ICL also said that the impact of the interim recommendations if implemented would be disastrous and lead the company to reduce its operations in Israel and lay off workers.
