Potash Corporation of Saskatchewan Inc. announced on Dec. 3 that it is reducing its workforce in Canada, the U.S., and Trinidad by approximately 18 percent from current levels due to sluggish demand and “challenging market conditions.” The company also announced a number of key operational changes affecting its potash and phosphate businesses.

Calling it a “difficult but necessary step,” PotashCorp said it planned to cut its workforce by approximately 440 employees in Saskatchewan, 130 in New Brunswick, 350 in Florida, 85 in North Carolina, and 40 in other U.S. locations and Trinidad. PotashCorp said the reductions followed a “comprehensive review of business and operational needs,” and would impact all three of its operating segments (nitrogen, phosphate, and potash), as well as corporate services.

“Despite confidence in the long-term drivers of our business, a significant portion of fertilizer demand comes from developing markets where growth has been less robust than expected,” the company said. “This sluggish environment has been most visible in our potash and phosphate businesses, and has contributed to challenging market conditions. As a consequence, we must make some difficult decisions today to ensure the company continues to be well positioned for the future.”

PotashCorp said the changes were necessary to respond to market conditions; to reduce costs in order to enhance the company’s global competitive position; to maintain operational flexibility in potash to meet anticipated future demand growth; and to optimize the company’s lowest-cost operations “while retaining the ability to respond to expected demand levels and product needs of our customers.”

“This is a difficult day for our employees and our company,” said PotashCorp president and CEO Bill Doyle. “While these are steps we must take to run a sustainable business and protect the long-term interests of all our stakeholders, these decisions are never easy. We understand the impact is not only on our people, but also in the communities where we work and live, and PotashCorp will work hard to help those affected through this challenging time.”

PotashCorp also announced several major operational changes, including suspending production at one of its two Lanigan, Sask., potash mills by the end of the year; reducing production at its Cory facility in Saskatchewan also by year-end; and ceasing production at its Penobsquis, N.B., facility by the end of the first quarter of 2014. The company said the suspension of production at Penobsquis would allow it to accelerate development activities at its Picadilly potash mine near Sussex, N.B.

PotashCorp said the operational changes would not impact its Allan and Rocanville potash facilities in Saskatchewan, and that it planned to keep its suspended Lanigan facility in a “care-and-maintenance mode” following the year-end closure. PotashCorp said the changes would reduce its permanent potash workforce by some 570 people, with the majority of those positions at its Lanigan, Cory, and New Brunswick facilities. It noted that its Patience Lake, Sask., facility would also be affected by the job cuts, however, as would its corporate headquarters in Saskatoon.

“We anticipate our operational capability for 2014, along with our inventory position, will provide us the ability to supply more than 10 million tonnes, which should provide ample supply cushion,” the company said. “Although staffed to run at reduced levels for the foreseeable future, our Lanigan and Cory plans provide the flexibility to ramp-up operations as market conditions warrant.”

PotashCorp noted that its current expansion project at Rocanville, which is approximately 90 percent complete, will continue as previously ann

LSB Industries Inc. today announced that its Pryor, Okla. chemical facility is expected to resume production in December 2013 after being taken out of service during October 2013 to perform unplanned maintenance and to improve equipment reliability. LSB previously announced that the Pryor facility was expected to be returned to production in November 2013, however, as the work progressed, the scope of the repair and upgrade became more extensive, resulting in a longer period of downtime than initially anticipated. The company plans to issue an update when the facility is returned to full production.

Denver-based Intrepid Potash announced on Nov. 26 that it has entered into a contract with United Suppliers Inc. to purchase the Eldora, Iowa, company’s dry fertilizer warehouse in St. Joseph, Mo. Intrepid said the purchase of the 20,000 st facility will support its ag market strategy by transitioning some customers in the region from direct rail shipments to warehouse purchasing.

"The St. Joe location is a strategic distribution asset for us," said Kelvin Feist, senior vice president of sales and marketing for Intrepid. “This warehouse allows us to support our customer base in the region from our geographically-advantaged mines and, in addition, it allows us to add warehouse space to support increased production and meet just-in-time fertilizer demand closer to the farm gate."

The transaction is expected close by the end of the year. United Suppliers, a wholesale organization with some 650 owners across North America, said it will also continue to supply fertilizer to its owners from the St. Joseph warehouse.

"United Suppliers is pleased that Intrepid Potash saw a long-term need for the St. Joe dry shed," said Matt Carstens, vice president with United Suppliers. “The sale of this warehouse to Intrepid makes good sense because of Intrepid’s proximity to this market. It allows United Suppliers to move its strategy forward and support our owners accordingly.”

Feist said Intrepid anticipates good support for the St. Joseph asset. "Intrepid is committed to supplying a number of key customers through this recent warehouse purchase,” he said. “We feel like our approach to this asset will further build customer relationships and ultimately grow our volumes in a key geography. We look forward to pursuing further opportunities of this nature where strategically sound.”

Rentech Nitrogen Partners LP confirmed that a brief fire occurred in and was isolated to the ammonia synthesis loop of the ammonia plant at its East Dubuque, Ill., nitrogen fertilizer facility at approximately 9 a.m. CST Nov. 29. Rentech said it was extinguished by plant personnel and the Menominee-Dunleith Fire Department. Rentech said there were no injuries or chemical releases, nor was there any threat or hazard posed to the community.

Rentech said the plant was shut down in an orderly fashion in response to the fire. An investigation into the cause of the incident is underway. As of Nov. 29, Rentech said the facility is anticipated to be offline for several weeks while damages are assessed and repairs are completed. The facility is expected to resume shipments of product held in inventory within the next few days.

Major products at East Dubuque are UAN and anhydrous ammonia.

Shareholders of Russian fertilizer producer Uralchem confirmed on Dec. 2 that they have agreed to purchase a 20 percent stake in OAO Uralkali. The transaction is valued at approximately $2.9 billion based on Uralkali’s share price on the London Stock Exchange.

The Uralchem investors, led by billionaire Dmitry Mazepin who owns 95.2 percent of the company, said in a statement that they have agreed to buy shares and Global Depository Receipts (GDRs) in a deal that includes the Uralkali holdings of billionaires Anatoly Skurov and Filaret Galchev. The deal is expected to close in the near term.

“We believe in the fundamental attractiveness of the potash market and appreciate the leadership position held by Uralkali in this market,” Mazepin said in Uralchem’s statement. In a Dec. 2 press release addressing the Uralchem announcement, Uralkali said only that it is “not party to these sale and purchase arrangements.”

The news comes two weeks after Suleiman Kerimov agreed to sell his 21.75 percent stake in Uralkali to Russia’s Onexim Group (GM Nov. 25, p. 1), which is owned by another Russian tycoon, Mikhail Prokhorov. The Uralchem deal signals another step in the resolution of a month’s long conflict that began this summer when Uralkali announced that it would no longer direct its export potash sales through Belarusian Potash Co. (BPC), the long-standing joint marketing venture between Uralkali and Belarus producer OAO Belaruskali (GM Aug. 5, p. 1).

The dissolution of BPC ultimately led to the Aug. 26 arrest of Uralkali CEO Vladislav Baumgertner in Minsk on charges of abuse of power as chairman of BPC (GM Sept. 2, p. 1). Baumgertner was extradited back to Russia from Belarus on Nov. 22 (GM Dec. 2, p. 10), and is currently being held in a pretrial detention center.

Yara International ASA reported on Nov. 26 that it has entered into an agreement to acquire OFD Holding Inc. (OFD) from Omimex Resources Inc. for an enterprise value of US$425 million. The purchase includes fertilizer production facilities in Colombia and distribution companies across Latin America, including Abocol (Colombia), Misti (Peru), Omagro (Mexico), Fertitec (Panama and Costa Rica), Cafesa (Costa Rica), and Norsa (Bolivia).

The $425 million enterprise value includes working capital of $332 million. Yara is also acquiring real estate from the same seller for future expansion in the region, valued at a total of $40 million. Closing is expected to take place during the second quarter of 2014, and is subject to due diligence, approval of competition authorities, and other customary approvals.

Yara said the transaction further strengthens its downstream footprint and growth platform in Latin America, and is highly complementary to its recent acquisition of Bunge’s fertilizer business in Brazil. Yara estimates an annual synergy potential of $20 million through logistics and sourcing optimization, and substituting third-party sourced products with Yara products.

"I am excited to announce this agreement, which re-confirms Yara’s long-term commitment to Latin America. OFD fits well with Yara, and will further improve our downstream positioning within the fast-growing cash-crop markets in the region," said Jørgen Ole Haslestad, Yara president and CEO. "This deal marks a further step for our global growth ambition, adding almost half a million tons of upstream fertilizer capacity, further leveraging our capabilities within crop nutrition and value-added fertilizer, to the benefit of our shareholders and agricultural development in Latin America.”

OFD’s production facility in Cartagena, Columbia, has annual capacity of approximately 320 kilotons (kt) compound NPK, 100 kt calcium nitrate, and 70 kt ammonium nitrate, with integrated ammonia production. In addition, OFD has annual production capacity of 25 kt single super phosphate through Fosfatos de Boyaca in Colombia.

OFD also controls approximately 700 kt of NPK blending capacity across 12 sites, and 100 kt of liquid fertilizer capacity as part of its fertilizer distribution network across Colombia, Mexico, Peru, Bolivia, Costa Rica, and Panama. OFD sold 1,131 kt of fertilizer in 2012, generating net revenues of $796 million and an EBITDA of $35 million. The company’s 2011 EBITDA was $64 million.

"We are fully convinced that the knowledge, experience, and portfolio of a global company like Yara, combined with the regional know-how of OFD group of companies in each of the countries, added to our closeness to the Latin-American farmers, will help our customers reach the required levels of agricultural productivity," said Jorge Bernal, president at Abocol S.A.

LSB Industries Inc. announced late Nov. 21 its El Dorado Chemical Co. subsidiary has been issued an air permit from the Arkansas Department of Environmental Quality for the previously announced expansion of its El Dorado, Ark., chemical facility (GM Nov. 18, p. 1). The expansion includes an ammonia plant, nitric acid plant and concentrator, and all related infrastructure. Obtaining the air permit was a key requirement before construction activities could commence on these projects.

“The issuance of the air permit by the ADEQ is an important step in the process of moving our expansion plans for the El Dorado Facility forward,” said Jack Golsen, LSB chairman and CEO. “We expect to commence construction immediately and, once installed and operational, these plants will provide the facility with increased capacity, improved efficiency, product mix flexibility, and should result in a significant reduction of feedstock costs.”