NeuAG LLC, The Woodlands, Texas, said on Oct. 6 it has completed a debt financing agreement with funds managed by Oaktree Capital Management LP, Los Angeles, to assist in funding the construction of a $90 million ammonium sulfate storage and distribution facility in Freeport, Texas.
Previously announced in May 2020 (GM May 15, p. 1), NeuAG will become BASF Corp.’s new exclusive partner to distribute and market ammonium sulfate (approximate 710,000 st/y capacity), which comes from BASF’s caprolactam production. Construction of the new facility, which will be adjacent to the existing BASF complex in Freeport, began in September 2020.
“This financing provides NeuAG with the capital necessary to construct North America’s newest and most efficient ammonium sulfate storage and distribution facility adjacent to BASF’s complex in Freeport, TX,” said Jerry Newcomb, NeuAG Co-Chairman and CEO. “We are excited to be working with the Oaktree team that has a long history of supporting businesses like NeuAG.”
“We expect the construction to be completed in the fall of 2021, allowing NeuAG to begin supplying customers with BASF’s ammonium sulfate in November 2021,” said Joe Newcomb, NeuAG Co-Chairman and President. “As the exclusive distributor of BASF’s ammonium sulfate, we expect to service customers across a broad range of end uses, including agriculture, industrial, and sprayable markets.”
“Ammonium sulfate is a critical component to our caprolactam value chain, and we are excited to be in a relationship with NeuAG, where we are confident that this state-of-the-art facility will be invaluable to our long-term success,” said Jason Kennedy, BASF Director of Supply Chain. “The efficiencies gained with this new plant will ensure best in class product quality and supply chain optimization, positioning us for sustainable growth in the agricultural and industrial markets.”
American Plant Food Corp. (APF), Galena Park, Texas, which has been marketing the BASF AS for some 55 years, told Green Markets in May that the company will continue in the ammonium sulfate business (GM May 22, p. 1). APF’s access to BASF AS ends toward the end of 2021, about the same time NeuAg says its new storage and distribution facility will be ready.
APF noted at the time that it has the infrastructure to move fertilizer, including the new Greens Port Terminal in Houston, which has approximately 60,000 st of storage. APF also has a major supply contract with EuroChem AG, Zug, Switzerland, and urea, phosphate, and potash are stored at the terminal. APF also has large storage at Galena Park, as well as 11 blending plants.