All Posts from October 1, 2021

Crystal Valley Hit with Ransomware Attack; New Co-op Website Still Down

Featured, News, Northern Plains

Crystal Valley, a farm supply cooperative headquartered in Mankato, Minn., has become the second agricultural co-op to be hit with a ransomware attack this month. Crystal Valley on Sept. 21 posted an alert on its website confirming that it had been targeted in an attack that infected its computer systems and “severely interrupted the daily operations of the company.”

“Crystal Valley and cyber security experts are working diligently to re-establish safe and secure operating systems, which will be back online when we are confident the issue has been resolved,” the company said. “Because of this, we are unable to accept Visa, Mastercard, and Discover at our cardtrols until further notice. Local cards do work.”

The news follows earlier reports that New Cooperative Inc., Fort Dodge, Iowa, was struck by a ransomware attack on or around Sept. 17, forcing it to shut down its computer systems as it tried to mitigate the assault (GM Sept. 24, p. 1). The BlackMatter ransomware group took credit for the attack and demanded a $5.9 million ransom by Sept. 25 in exchange for a decryptor, saying the ransom would jump to $11.9 million if the deadline was not met.

BlackMatter is believed to be linked to the ransomware group DarkSide, which attacked Colonial Pipeline Inc. earlier this year, triggering fuel shortages along the East Coast.

The Messenger, a newspaper in Fort Dodge, reported that New Cooperative would not be paying the ransom, citing a farmer close to the co-op who said the federal government was treating the ransomware attack as a terrorist attack. New Cooperative representatives did not respond to requests for more information. As of Sept. 30, New Cooperative’s website was still down.

Crystal Valley reported that it was alerted of the ransomware attack on its operations on Sept. 19. On Sept. 24, the company reported that it was accepting grain at all elevator locations, though at a slower-than-normal pace due to the use of manual hand tickets. The company said a formal notification of data-breach was being sent to every customer and company on record at Crystal Valley. No further updates were provided as of Sept. 30. The company’s website was functioning throughout the week.

“No money was stolen from Crystal Valley in the cyber-attack,” the company said on Sept. 24. “As always, Crystal Valley is fully capable of meeting any and all financial obligations. At this time, we are not aware of any data being used inappropriately, or that it was actually obtained by anyone, but we have determined that confidential data could have been viewed by an unauthorized person. Therefore, customers and business partners alike should assume that their personal information was compromised and take precautionary measures to monitor their banking accounts and financial information, along with credit reports, etc.”

Crystal Valley operates 16 locations providing agronomy, grain, energy, and feed products and services to more than 2,700 agricultural producers in southern Minnesota and northern Iowa. The company is also part of the CommoditAg e-commerce crop inputs platform (GM Aug. 31, 2018).

Bloomberg on Sept. 29 reported that House Oversight Committee Chairwoman Carolyn Maloney and Republican Rep. James Comer are seeking an FBI briefing about the agency’s delay in aiding businesses targeted by a ransomware attack this summer. The lawmakers said the FBI reportedly obtained a digital decryptor key that could have unlocked affected systems, but withheld the tool for nearly three weeks.

“Ransomware hackers have shown their willingness and ability to inflict damage on various sectors of the U.S. economy,” Maloney and Comer wrote to FBI Director Christopher Wray. “Congress must be fully informed whether the FBI’s strategy and actions are adequately and appropriately addressing this damaging trend.”

Earlier this month, the FBI released a notice warning companies in the food and agriculture sector to watch out for ransomware attacks aiming to disrupt supply chains. “Food and agriculture businesses victimized by ransomware suffer significant financial loss resulting from ransom payments, loss of productivity, and remediation costs,” the FBI said. “Companies may also experience the loss of proprietary information and personally identifiable information and may suffer reputational damage resulting from a ransomware attack.”

The FBI said multiple attacks have taken place on the food and agriculture sector since last year, including a Sodinokibi/REvil ransomware attack on a U.S. bakery company; an attack on global meat processor JBS in May that ended with JBS paying an $11 million ransom; a March 2021 attack on a U.S. beverage company; a January 2021 attack on a U.S. farm that caused losses of approximately $9 million; and a November 2020 attack on a U.S.-based international food and agriculture business that was hit with a $40 million ransom demand from the OnePercent Group.

BASF, Odessa Port Plant to Cut Production; Ma’aden Restarts MPC Plant

Ammonia, Europe, Featured, Germany, News, Saudi Arabia, Ukraine

BASF and Ukraine’s Odessa Port Plant (OPP) have become the latest European producers to cut ammonia production due to the soaring cost of natural gas. Germany-based BASF on Sept. 27 reported that it was curtailing ammonia production at its production sites in Antwerp, Belgium, and Ludwigshafen, Germany.

“Due to the recent rise in natural gas prices in Europe, the economics for operating an ammonia plant in the region have become extremely challenging,” BASF said in a statement. The company said it will continuously monitor the gas price development and adjust its ammonia production accordingly.

OPP suspended ammonia production on Sept. 30, a day after halting urea production due to the high price of natural gas. According to the Russian news agency Tass, OPP said its gas supplier, Agro Gas Trading, was currently unwilling to supply gas “given its unprofitability, with the price exceeding $1,000 including mark-ups.”

OPP said the increased price of its finished products due to the higher gas prices means they have become “uncompetitive,” adding that all of its storage facilities “are completely packed with urea,” Tass reported. Ukraine’s Odesky Pryportovyi Zavod decided to halt ammonia production on Sept. 22, according to Bloomberg (GM Sept. 24, p. 1).

The recent shutdowns follow reports last week that Vienna-based Borealis AG was curtailing production of ammonia in Europe amid soaring natural gas prices. A company spokesperson told Green Markets on Sept. 23 that Borealis had reduced its production of ammonia and will “further analyze the situation” regarding its plants in Austria, France, and the Netherlands. Borealis AG had no further comment on the potential impact on the company’s downstream production.

Oslo-based Yara International announced on Sept. 17 that it planned to curtail around 40 percent of its European ammonia production capacity within the next week (GM Sept. 17, p. 1). The company told Green Markets on Sept. 20 that it was sourcing ammonia from its plants in Australia, the U.S., and Trinidad to help cover the production curtailments in Europe so it could maintain stable fertilizer production.

Some of the other European producers who have curtailed their ammonia production are believed to be buying ammonia to cover some of their shortfalls. Industry sources estimated that the current price of natural gas means most producers are facing an ammonia production cost of $1,000-$1,100/mt, putting the final product far out of reach for any buyer.

Lithuanian nitrogen fertilizer manufacturer Achema was expected to keep one of its two ammonia units offline after the completion of the summer maintenance program, according to a NewsBase report last week. There have been reports of more European producers reducing ammonia output, but this could not be confirmed directly with the companies by press time.

CF Industries Holdings Inc. on Sept. 21 said it was restarting the ammonia plant at its Billingham, U.K., complex at Teeside after announcing on Sept. 15 that it was halting operations at Billingham and Ince, U.K., in response to high natural gas prices. The restart of the Billingham plant followed an interim agreement reached on Sept. 21 with the U.K. government to cover the costs to restart the ammonia plant and produce CO2 for the U.K. market.

Safely restarting the ammonia plant at the Billingham Complex was expected to take several days. The restart did not include the Ince plant in Cheshire, and the support offered by the U.K. government is only for three weeks.

Meanwhile, operations resumed at Ma’aden Phosphate Co.’s (MPC) ammonia plant at Ras Al-Khair Industrial City on Saudi Arabia’s East Coast on Sept. 29 following the completion of maintenance work at the facility, Riyadh-based Saudi Arabian Mining Co. (Ma’aden) announced in a filing to Saudi Arabia’s stock exchange.

The MPC ammonia plant was shut down on May 20 after encountering a technical problem, which led to a limited fire at the facility (GM May 28, p. 2).

Three China Firms Fined for Potash Price Hikes

China, Featured, News, Potash

China’s Sinofert Holdings Ltd., CNAMPGC, and Qinghai Salt Lake Industry Co. Ltd. (QSL) have been fined by the country’s State Administration for Market Regulation (SAMR) for “price gouging” on sales of potash, according to a Bloomberg report, citing statements from SAMR.

SAMR fined Sinofert Holdings and CNAMPGC each 2.6 million yuan (approximately $402,000 at current exchange rates), and QSL was fined 1.6 million yuan “for their behaviors in potassium chloride transactions this year” that violated China’s Price Law.

Domestic prices of potash increased more than 60 percent in the first half of this year. Domestic prices of NPK fertilizers have also increased sharply in recent months.

State-owned QSL is China’s largest potash producer. It has a production capacity of about 5 million mt/y, accounting for just over 40 percent of China’s estimated 12 million mt/y potash production capacity, according to Green Markets data (GM Jan. 3, 2020).

Sinofert is the country’s largest fertilizer supplier and distributor, selling about 2.1 million mt of potassium chloride last year, according to the report. CNAMPGC is also a leading importer, exporter, and distributor of fertilizers in China.

Late last week, China’s state planner, the National Development and Reform Commission (NDRC), called for a full court press to guarantee fertilizer supplies, issuing detailed orders to regulators like SAMR, as well as government departments and producers, according to the report. NDRC warned against fertilizer hoarding and price manipulation (GM Sept. 24, p. 16).

The state planner said the government would take measures to keep fertilizer supplies and prices stable, and it called for potash reserves to be released into the market to ease prices.

China’s national potash reserves in recent years have typically been maintained at the 1.5 million mt level. The country’s potash inventory at the ports was recently estimated at 2.045 million mt, according to a China Fertilizer Week report (GM Sept. 17, p. 15).

Hocking International Labs – Management Brief

California, Management Briefs, Southeast

Hocking International Labs, San Marcos, Calif., on Sept. 23 announced the addition of Brian Cigainero to its commercial team. Cigainero will focus on expanding Hockings’s footprint as Area Sales Manager covering the Southeast, and will report to Scott Messer, Director of Ag Sales.

Hocking said Cigainero has significant experience in bio-solutions, nutritionals, and specialty chemical manufacturing, most recently serving as a Regional Manager at AgXplore. He has also held business development roles at Compass Minerals, Timac Agro, and Arysta Life Sciences. Cigainero holds a B.S. in Business Management from the University of West Georgia and a Masters of Agribusiness from Kansas State University. He and his family reside on their farm in Northwest Georgia.

“We are very fortunate to have Brian joining the Hocking team,” said Mark Auchampach, Chief Commercial Officer. “His experience, coupled with his energy and passion for building partnerships providing agronomic solutions, will be well received across the Southeast.”

Yara North America Inc. – Management Brief

Management Briefs, Obituary

Jerry Southwell, formerly with Yara North America Inc. and a member of the Board of Directors of the Florida Fertilizer and Agrichemical Association (FFAA), passed away on Sept. 25 after battling pneumonia for several weeks since being hospitalized with COVID, according to an announcement from the FFAA.

Southwell spent almost a quarter century with Yara and its predecessor companies before retiring in 2014. Before joining Yara, he was a Hardee County Extension Directory and Vocational Agribusiness teacher at Desoto County High School in Arcadia, Fla. He was the recipient of FFAA’s Lifetime Achievement Award in 2014, having served on FFAA’s Fertilizer Advisory Committee, the FFAA Scholarship Board, and the Florida Certified Crop Advisers Program.

Southwell is survived by his wife Jill, their sons Steven and Josh, daughter Robin, and six grandchildren. A Celebration of Life is scheduled for Oct. 1 at the First United Methodist Church in Wauchula, Fla. In lieu of flowers, the family suggests contributions be made in his memory to the First United Methodist Children’s Home (https://www.fumch.org/making-a-difference/make-a-donation/) or the Florida Sheriffs Youth Ranches (https://www.youthranches.org/ways-to-give/online-donation).

Chemtrade Sells KCl, Vaccine Adjuvents Businesses

Canada, News, News Briefs

Toronto-based Chemtrade Logistics Income Fund announced on Sept. 30 that it has entered into a definitive agreement to sell its Potassium Chloride (KCl) and Vaccine Adjuvants businesses to Vertellus, a manufacturer of specialty products for various consumer goods, food and agriculture, healthcare, and industrial markets.

The sale price was reported at approximately US$155 million. The transaction is expected to close during the fourth quarter of 2021 and is subject to customary closing conditions. BMO Capital Markets is acting as financial advisor to Chemtrade in connection with the transaction.

“These are both good businesses, which have benefited from our recent capital investment that expanded and upgraded both plants,” said Scott Rook, President and CEO of Chemtrade. “As a strategic buyer, Vertellus will be able to add further value and will benefit from the skilled teams at both locations. We are confident that Vertellus and PPC will take the strong platform that we have built and make the businesses even stronger.”

The businesses, which had been classified as Assets Held for Sale in Chemtrade’s financial statements, are part of Chemtrade’s Water Solutions and Specialty Chemicals segment and are located in Midlothian, Texas, and Berkeley Heights, N.J.

Vertellus is a Pritzker Private Capital company and is headquartered in Indianapolis, Ind. The businesses that the company is acquiring from Chemtrade produce specialty ingredients essential in the efficacy of medications for hypertension and diabetes, production of next-generation biologics, and improving the effectiveness of certain vaccines.

Chemtrade said it will use the net proceeds of the sale to reduce bank debt. Based upon the midpoint of guidance for 2021 provided by Chemtrade in August 2021, and after making a pro-forma adjustment for the loss of a full year’s EBITDA of the disposed businesses, this repayment will reduce Chemtrade’s senior Debt:EBITDA ratio by approximately 0.7 times.

Due to the anticipated timing of the closing of the transaction, Chemtrade said the sale will not have a material impact on its 2021 reported distributable cash after maintenance capital expenditures. The businesses generated approximately US$14.3 million of EBITDA during the twelve months ended June 30, 2021.

Semios Raises $100M to Expand R&D

News, News Briefs, Vancouver

Vancouver-based Semios, an agtech provider of real-time crop data, announced on Sept. 29 that it has raised $100 million in funding led by Morningside Group, a Boston-based private equity and venture capital firm.

Semios said the funding will be used to accelerate R&D and expand internationally to help growers reduce chemical inputs, better manage water, organize farming data, and improve crop outcomes. UBS Investment Bank acted as the exclusive placement agent for Semios.

“Semios is on a mission to simplify the grower’s experience, leveraging big data analytics and machine learning to help them mitigate crop risk so they can focus on growing more food, more sustainably,” said Dr. Michael Gilbert, CEO of Semios. “We have seen firsthand the challenges our customers are facing in the field – from severe drought and devastating fires, to frost, reduced profitability, and an increasing regulatory burden. But, in the face of these challenges, farmers are adapting to meet the nutritional needs of our growing population with new technologies.”

Semios, which was founded in 2010, utilizes a network of sensors that provide more than 500 million data points measuring climate, soil moisture, and insect and disease activity daily to help growers minimize crop risks. The company has more than 120 million acres of row and permanent crops under management, serving growers, agronomists, and ag retailers across the U.S., Canada, Australia, New Zealand, Europe, and South Africa.

“Morningside invests in companies committed to tackling pressing global challenges head on,” said Mick Sawka, Investment Manager at Morningside Group. “The ability to not only maintain but also enhance the sustainability of our food systems amid the complex dynamics of a changing climate is one of the world’s most pressing needs of our time. Semios is a leader in helping farmers respond to this challenge, and we’re proud to stand beside them.”

Semios has raised more than $225 million in external capital to date. Last year, the company announced $100 million in funding, also led by Morningside Group, that helped it acquire Altrac, Centricity, and Agworld in 2021 (GM Sept. 3, p. 29).

“Our recent acquisitions are aimed at bringing the tools farmers need to manage their crops under one roof,” Gilbert said. “This latest round of funding will help us continue to support the agricultural industry as it faces some of its toughest challenges yet.”

LSB Closes Transaction, Announces Private Placement

Fertilizer Stocks, News, News Briefs, Southern Plains

LSB Industries Inc., Oklahoma City, Okla., on Sept. 27 announced that it has closed the previously announced transaction with LSB Funding LLC, an affiliate of Eldridge Industries LLC, to exchange the shares of LSB Series E-1 and Series F-1 Redeemable Preferred Stock held by Eldridge for shares of LSB common stock.

The exchange transaction, which was approved by LSB’s stockholders during a Special Meeting on Sept. 22, involved the exchange of $310 million of preferred stock into an equivalent value of LSB common stock based on an exchange price of $6.16, which is equal to the 30-day volume weighted average price as of the date of the Exchange Agreement.

In connection with the transaction, the company will pay existing LSB common stockholders a special dividend in the form of 0.30 shares of LSB common stock for every share owned as of the Sept. 24 special dividend record date. Upon payment of the special dividend on Oct. 8, LSB will have approximately 88.9 million shares outstanding, of which approximately 54.4 million shares, or approximately 61 percent, will be held by Eldridge.

“The closing of our exchange transaction with Eldridge represents a major step in LSB’s progress towards becoming a company that generates consistent growth in earnings and cash flow, and delivers increasing value to our stockholders,” said Mark Behrman, LSB’s President and CEO. “We are pleased that Eldridge has elected to partner with us to transform LSB’s balance sheet in order to give us the opportunity to unlock the company’s full potential as a leading producer and marketer of agricultural, industrial, and mining chemicals, and we look forward to having them as a sizeable holder of our common stock.”

LSB also announced on Sept. 29 that it priced its previously announced offering of $500 million in aggregate principal amount of senior secured notes due 2028, which will be sold in a private placement to eligible purchasers. The notes will be guaranteed on a senior secured basis by all of LSB’s existing subsidiaries and by certain of LSB’s future domestic wholly owned subsidiaries.

The notes will bear an annual rate of interest of 6.250 percent, will mature on Oct. 15, 2028, and will be issued at a price equal to 100 percent of their face value. The closing of this private offering is expected to occur on Oct. 14, 2021, subject to customary closing conditions.

LSB said it intends to use the net proceeds from this offering for the redemption, to pay related transaction fees, expenses, and premiums, and, to the extent of any remaining net proceeds, for general corporate purposes.

Anuvia Partners with JGI on Sustainable Ag

Florida, News, News Briefs

Anuvia Plant Nutrients, Winter Garden, Fla., on Sept. 28 announced a partnership with the U.S. Department of Energy Joint Genome Institute (JGI) to help drive discoveries that will deliver new cutting-edge plant nutrient technologies to farmers who want to improve sustainable soil health practices.

The JGI research team is conducting a series of analytical chemistry experiments on various plant feedstocks and soil samples from Anuvia’s research plots. The researchers designed a fabricated ecosystem device (EcoFAB) that will uncover the mechanisms underlying the interactions between plants and their root microbial communities. Combining the tools of liquid chromatography and mass spectrometry, JGI claims it can precisely measure microbial changes to identify product-specific organic compounds that support the growth of beneficial microbes.

“This project is a fantastic opportunity for us to use our EcoFAB and metabolomics capabilities to gain insights into how Anuvia’s products support sustained plant and microbial growth and ultimately better crop yields,” said Nigel Mouncey, JGI director.

Anuvia manufactures high-efficiency, sustainable bio-based fertilizers under the GreenTRX brand for turf and lawn, and the SymTRX brand for agriculture. The company said its products deliver consistent, slow-release multi-nutrients and reintroduce organic matter to soil, stimulating nourishment for microbes to multiply. Anuvia said the slow-release technology allows more nutrients to be used, decreasing nutrient loss from leaching or volatilization while increasing crop yield and improving soil health.

“Harnessing JGI’s technologies and expertise allows us to more rapidly identify the qualities of organic feedstocks that enhance the soil microbiome and improve soil health while efficiently releasing nutrients critical for plant health,” said Shawn Semones, Anuvia’s Vice President of Research and Development.

“Our collaboration with JGI will spur development of technologically advanced products that bring balanced land stewardship and management to agriculture,” Semones added. “On the manufacturing side, these new technologies will optimize the use of renewable natural resources and diminish waste streams while advancing a circular business model.”

JGI is a DOE Office of Science User Facility at Lawrence Berkeley Nation Laboratory in Berkeley, Calif. DOE’s Office of Science is the largest supporter of basic research in the physical sciences in the U.S.

Disclaimer of Warranty
All information has been obtained by Green Markets from sources believed to be reliable. However, because of the possibility of human or mechanical error by our sources, Green Markets or others, Green Markets does not guarantee the accuracy, adequacy, or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.

For additional details visit our Terms of Use.