All Posts from June 1, 2015

Neste Jacobs wins contract for Azerbaijan plant

News, News Briefs

Helsinki, Finland — Neste Jacobs, a Finland-based technology, engineering, and project management company, has signed an agreement with Socar, Azerbaijan’s state-owned oil company, to act as the project management consultant (PMC) and coordinator of third-party inspections for Socar’s greenfield ammonia/urea fertilizer complex at Sumqayit, Azerbaijan, according to a statement from Socar. “We are proud to provide our strong knowledge to Socar in this state-of-the-art and world scale fertilizer industry project,” said Jarmo Suominen, managing director of Neste Jacobs. “We understand the value of the project both for Socar and the Republic of Azerbaijan.” The complex, which is a joint undertaking by Socar and South Korea’s Samsung Engineering Co., is slated to be commissioned in 2017, and will be designed to produce 1,200 mt/d of ammonia and 2,000 mt/d of urea. Socar said the facility will meet domestic fertilizer needs and also allow some exports to Turkey through Socar’s terminal in Kulevi.

Ukrainian company to shutter N plants

News, News Briefs

Kiev — Group DF, a company controlled by Ukrainian tycoon Dmytro Firtash, announced on May 28 that it was closing down its remaining two nitrogen fertilizer plants in Ukraine due to “systematic and unexplained pressure” from the government. A company statement said the closure of the Ostchem Holding plants Azot PJSC (Cherkasy) and Rivne Azot PJSC was the result of the government’s “absolutely unlawful” decision to withhold natural gas, which Group DF attributed to a “large-scale political attack” against the company and Firtash. Group DF said it closed two other nitrogen plants – Azot PJSC (Cherkasy) and Rivne Azot PJSC – in May 2014 due to terrorism-related safety concerns. Firtash has faced corruption allegations from Ukraine’s People’s Front government members since the ouster of pro-Russian president Victor Yanukovich. The company’s statement referred to the “continuing cynical attacks” as “deliberate fabrication of a range of criminal cases” against Firtash and other company executives, and said they were intended to “destroy the business and jobs and harm the whole industries of the Ukrainian economy.”

PotashCorp once again evaluating stake in ICL

News, News Briefs

Saskatoon — Potash Corp. of Saskatchewan Inc. may reconsider the retaining of its stake in Israel Chemicals Ltd. (ICL) if it is not allowed to increase it. PotashCorp holds a 14 percent stake in ICL. PotashCorp CEO Jochen Tilk made the statement at an investment conference sponsored by Bank of Montreal that was held in New York. In response to the comments, ICL CEO Stefan Borgas said that if PotashCorp is interested in increasing its stake in the company, the matter would have to be brought up directly with the Israeli government since the government holds a “golden share” in ICL that gives it a say in company matters. Borgas also said that numerous investors had contacted ICL about acquiring PotashCorp’s stake. In April 2013, Israel’s then Finance Minister Yair Lapid dashed attempts by PotashCorp to take over ICL. The finance minister informed his senior staff at the ministry that he was strongly opposed to the proposed takeover, and said that Israel’s natural resources are public assets and should benefit the Israeli public. At the time, Prime Minister Benjamin Netanyahu was believed to have supported the proposed deal but then backed down after strong opposition from Lapid and the unions. It is unclear what the position of the new Finance Minister Moshe Kahlon will be if PotashCorp takes up the matter again with the Israeli government. PotashCorp was reportedly prepared to pay as much as $20 billion for full control of ICL in 2013. Since then, however, the company’s value has declined. Borgas said at the time of the proposed takeover that such a deal would only strengthen ICL.

ICL reaches agreement to end strike

News

The three-and-a-half month strike at Israel Chemicals Ltd. (ICL) ended on May 28 after the signing of an agreement between ICL management, the unions, and the Histadrut Labor Federation. The 2,000 striking workers at ICL’s two subsidiaries – Dead Sea Works and Dead Sea Bromine Compounds – returned to work on May 29.

Under the terms of the agreement, 38 workers in total will be fired from both subsidiaries, far lower than the initial number management had demanded. The agreement stipulates, however, that all 38 will be given a chance to prove themselves and their layoffs could be reconsidered. In addition, 100 workers above the age of 55 will be given early retirement in addition to the 100 that have already opted for this. Management also agreed that there would be no further layoffs at the two companies in the next three years. All those let go will be given a generous severance package.

Histadurt Chairman Avi Nissenkorn said the agreement was good news for the workers, but said no side had won since a strike of this length is a loss to all. The union leader apologized to Idan Ofer, the billionaire businessman who holds the majority stake in ICL, for comments and signs that were derogatory towards him during the strike.

ICL CEO Avner Maimon said the company has gone through a difficult period in recent months, and will have to go through a difficult process of restructuring in order to improve efficiency.

The strike, which began in early February when 140 workers at Dead Sea Bromine Compounds were summoned by management for dismissal, was one of the longest in Israel’s history. Earlier this month, ICL reported that the strike had led to a $200 million drop in revenues in the first quarter of 2015 and a $76 million drop in profits.

Potash sales during the first quarter fell to $377 million versus $491 million last year, while production fell to 834,000 mt from last year’s 1.270 million mt. Total potash sales in the quarter were 1.141 million mt versus 1.467 million mt last year. Inventory dropped sharply in the quarter, falling to 607,000 mt compared with 929,000 mt last year.

The strike is also expected to have a strong impact on ICL’s second quarter results, possibly even more than the first quarter. Industry analysts noted that it will take weeks for the plants that were closed to rev up their production.

The Week in Fertilizer Stocks

Fertilizer Stocks

The Week in Fertilizer Stocks

Producer Symbol Price Week Ago Year Ago
Agrium AGU 105.30 109.52 89.73
CF Industries CF 321.65 317.09 241.87
CVR Partners UAN 14.45 14.43 19.37
Intrepid Potash IPI 11.94 12.40 16.08
Mosaic MOS 46.53 47.43 49.33
PotashCorp POT 32.33 33.33 36.19
Rentech Nitrogen RNF 15.03 14.86 16.61
Terra Nitrogen TNH 130.48 136.78 140.35
Distribution/Retail
Andersons Inc. ANDE 44.86 45.30 50.94
Deere & Co. DE 93.50 89.46 90.91
Scotts SMG 62.13 64.97 60.04

Cavendish plans new storage facility in PEI

News, News Briefs

Dieppe, N.B. — Canadian company Cavendish Agri Services is planning a new fertilizer storage facility in New Annan, Prince Edward Island. The facility is to be located on agricultural land formerly owned by Indian River Farms, and will replace Cavendish’s current facility, located approximately 2 km northeast of the new site. According to an environmental impact assessment prepared by the province, the new facility will have finished storage capacity for 11,000 mt and will be completed in a number of phases over 15 years, eventually housing a broad range of fertilizer products including urea, ammonium sulfate, ammonium nitrate, CAN, DAP, MAP, TSP, potash, sulfate of potash (SOP), SOP Magnesia, high calcium limestone, gypsum, boron, zinc, and manganese sulfate. The first phase is slated to begin construction this July and will include a single structure for bulk AN storage that “will allow for increased capacity and reduced risks to the environment and the public.” Phase 2 will focus on a second bulk storage facility planned for construction during 2016-2020. Phases 3 and 4 are planned for 2020-2030, and will include additional storage structures, as well as above-ground liquid fertilizer tanks. The provincial report said the new facility will meet current industry standards and provide increased volume, as well as improve efficiency and quality for Cavendish, with the final Phase 4 completion allowing Cavendish “to consolidate all agricultural fertilizer storage operations to the proposed site, which will allow for the decommissioning of the existing location in District of New Annan and Summerside.” A public hearing on the proposed facility will be held after submission of a formal Environmental Impact Statement. Cavendish offers farm and turf fertilizers, crop protectants, farms supplies, precision ag services, crop scouting and soil analysis, storage management, and equipment rentals from 12 locations in Prince Edward Island, New Brunswick, Nova Scotia, and Maine.

Midwestern BioAg facility planned in Illinois

News, News Briefs

Blue Mounds, Wisc. — Fertilizer and agronomy consulting company Midwestern BioAg Inc. has announced plans to build a 17,000-square-foot fertilizer blending and distribution facility in Milledgeville, Ill. The plant, located in the Milledgeville Business Park at the intersection of Illinois Route 40 and Shannon Road, will blend proprietary and commodity dry and liquid fertilizers for surrounding farms and will provide application services through floater trucks and other equipment. “We are excited to increase our capacity to better serve our Illinois customers,” said CEO Tony Michaels. “For over 30 years, we’ve helped farmers improve crop yields and quality through our premium fertilizers and services. We’re excited to have the opportunity to bring these benefits to a wider customer base.” Midwestern BioAg is currently in the bidding process for the facility’s construction, and it expects to break ground this summer. The facility is expected to employ 15-20 people over the next two years. “On behalf of our citizens and the surrounding agricultural community, we welcome Midwestern BioAg to Milledgeville,” said Village of Milledgeville President Galen Wirth. “Midwestern BioAg will be a definite asset to our community and we look forward to a long relationship with them.” Founded in 1983, Midwestern BioAg has current annual sales of $40 million and serves 4,100 customers in 29 states and three Canadian provinces. The company has facilities in Wisconsin, Iowa, Michigan, Minnesota, and Ohio.

NH3 leak causes injuries, evacuation at Borger

News, News Briefs

Borger, Texas — An ammonia leak at Agrium Inc.’s urea facility in Borger, Texas, prompted an evacuation of the plant on May 28, and caused 16 KBR contract workers at the site to be transported to area hospitals. Agrium told Green Markets on May 29 that only two of the injured were hospitalized overnight and are now doing well, while all others received treatment and were released on May 28. Agrium said the leak occurred in the afternoon and was believed to be caused by a “slight glass failure on an ammonia pump,” with just over 80 pounds of ammonia released before the leak was contained. Local news reports said roads around the area were closed and emergency crews from nearby cities were called in to assist, but no evacuation was ordered for the surrounding community. “Fortunately, this release had no offsite impact to our neighbors,” said Agrium’s Richard Downey. Agrium said the urea facility was expected to be back online within a day or so, while the ammonia facility at Borger continues to operate normally.

Worker burned during fertilizer transfer

News, News Briefs

Holland, Mich. — A worker for Crop Production Services (CPS) in Holland, Mich., was recovering in a local hospital last week after being sprayed by heated UAN on May 26 while transferring the liquid fertilizer to a customer’s nurse tank. According to reports from the Ottawa County sheriff’s office, Kenneth Alan Clinger was injured when the connection between the valve on the delivery truck and the hose malfunctioned and sprayed him with the solution. Sheriff’s investigators believe the fertilizer heated up while it was recirculating during the final stages of the transfer. Clinger suffered injuries from his torso to his knees and was transported by ambulance to an area hospital. The sheriff’s office says the incident remains under investigation. “After a short stay in the hospital for observation, we are pleased that our co-worker will soon be home to recover from his injuries,” said CPS’s Billy Pirkle. “We continue to investigate the cause of the accident and thank our local public safety partners who quickly responded.”

Texas AN legislation awaits governor’s signature

News, News Briefs

Austin, Texas — Texas lawmakers have sent a bill to Gov. Greg Abbott that would require a number of regulatory changes for ammonium nitrate in the state. The legislation, which received House approval on May 8 (GM May 19, p. 16) before gaining Senate approval on May 21, would require AN facilities to store the product away from combustible materials; would move AN regulatory oversight from the Department of State Health Services to the Texas Commission on Environmental Quality (TCEQ), and would require TCEQ to make the Tier II reports submitted by chemical facilities available to the public; and would give the Texas State Fire Marshal’s Office (SFMO) the authority to inspect AN facilities and issue citations if operators fail to bring their facilities into compliance within 10 days.

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