All Posts from October 10, 2012

IFFCO to partner with La Coop fédérée for Quebec N plant

Indian Farmers Fertiliser Co-operative Ltd. (IFFCO) on Oct. 9 confirmed plans to build a C$1.2 billion nitrogen fertilizer plant in Quebec in partnership with Montreal-based La Coop fédérée. IFFCO said construction will begin in two years pending the results of a feasibility study and remaining capital raising efforts, with production of urea at the facility slated for 2017.

The site chosen for the plant is Quebec’s Becancour Waterfront Industrial Park, which has port and rail access. The plant would produce up to 1.2 million mt/y of urea, which would be shared evenly by IFFCO and La Coop. IFFCO officials said the company plans to sell its share of urea from the plant to Quebec customers first, followed by customers in the rest of North America, with the balance to India.

La Coop, which purchased Agrico Canada Ltd. in 2011, reported that its share of urea from the plant will be sold to its customers in Quebec and the Northeastern U.S.
The companies said 45 percent of the equity in the facility has yet to be raised. IFFCO would hold about 25 percent of the equity, La Coop about 12 percent, and the Quebec government 18 percent.

Earlier this summer IFFCO issued an Expression of Interest regarding the engineering and construction of an ammonia and urea complex in Eastern Canada (GM June 9, 2012). IFFCO at that time formed a joint venture called IFFCO Canada Enterprises Ltd. with Pacific Gateway Energy (PGE), an investment company formed to take an equity stake in IFFCO Canada.

PGE reported that it visited more than 50 sites in North America, and chose Quebec as an ideal location for the new plant (GM Sept. 7, 2012). In addition to its proximity to La Coop’s target North American market, the Quebec site allows IFFCO to easily export urea through the St. Lawrence Seaway.

Two Wisconsin cooperatives announce merger plans

Wisconsin River Co-op, based in Adams, Wisc., announced that it has signed a letter of intent with Farmer’s Co-op Supply and Shipping Association, based in West Salem, Wisc., to pursue a merger of the two companies.

The boards of both cooperatives have strongly endorsed the merger, and a vote by members is scheduled to take place in early November. The cooperatives will hold a series of member meetings in early November to address customer questions and concerns. For the merger to proceed, the majority of each co-op’s members must cast votes in favor of the plan. If the members support the merger, the transition to the combined organization will take place in early 2013.

“There are many advantages to a unification of our cooperatives,” said Wisconsin River CEO Timothy Diemert. “Both cooperatives are strong – with nearly equal sales and assets. Together the two cooperatives will have the purchasing power of a $220 million company. We will improve the utilization of our facilities and equipment. We can add efficiency to our sales and delivery routes. We will also be better positioned for growth and have increased access to capital. These advantages are just a few of the many that have been identified. Each of these advantages will strengthen our leadership position in the marketplace and help to ensure the long-term success of our cooperative.”
Monty Wick, general manager of Farmer’s Co-op, stressed that both companies are “financially sound,” and a merger would be a “win-win” for both cooperatives.

“We’re doing what we feel is best for our members in an increasingly competitive and ever-changing marketplace,” Wick said. “Sometimes businesses merge to overcome the weakness of one or both of the entities being joined. Others, however, combine operations to set the stage for an even better future — as is the case with the pending combination of Wisconsin River Co-op and Farmer’s Co-op.”

Wisconsin River Co-op has been in business for more than 80 years, with central Wisconsin locations in Adams, Mauston, Necedah, Plainfield, Plover, and Wisconsin Dells. The cooperative’s services include agronomy, feed, grain, LP, refined fuels, auto parts, tires, and a convenience store. Wisconsin River Co-op recently announced an expansion project in Tomah, Wisc., which will include an 8,000 ton dry fertilizer plant, 2,000 ton liquid fertilizer plant, and grain storage facilities.

Farmers Co-op Supply and Shipping Association was formed in 1917, and has operations in West Salem, Galesville, Melrose, Mindoro, and Tomah. Its services include agronomy, feed, grain, LP, refined fuels, hardware, tires, and a convenience store.