All Posts from May 14, 2021

CHS Expands Louisiana Grain Export Terminal

Louisiana, News, News Briefs, Northern Plains

CHS Inc., St. Paul, Minn., reported on May 12 that it plans a significant renovation and expansion project at its Myrtle Grove, La., grain export terminal. The $73 million investment focuses on storage and handling upgrades, which will grow market access for farmer-owners and help move 30 percent more bushels of grain annually through the terminal to global customers.

The CHS Myrtle Grove terminal handles wheat, soybeans, corn, rice, DDGS (distillers dried grains with solubles), and specialty grains for export to customers in Asia Pacific and Latin American countries. Located 25 miles south of New Orleans, it is the first terminal on the Mississippi River.

The terminal expansion project will add six shipping bins providing 580,000 bushels of storage, bringing total Myrtle Grove shipping bin storage capacity to 850,000 bushels. Other upgrades include a new bulk weighing and grading system, a new dock and barge unloading system, and independent conveyance for vessel loading that will allow two commodities to be loaded at the same time.

“Construction is expected to begin in August, during low river conditions,” said Kevin Hall, CHS Vice President, Supply Chain and Continuous Improvement. “Given the terminal’s unique location, significant environmental, engineering, and construction elements were built into every part of our plan.” Completion is expected by summer 2023.

CSX to Acquire Quality Carriers

News, News Briefs

CSX Corp., Jacksonville, said on May 12 that it has signed a definitive agreement to acquire Quality Carriers Inc., the largest provider of bulk liquid chemicals truck transportation in North America, from privately-held global logistics and transportation company Quality Distribution Inc., Tampa. Terms of the transaction were not disclosed.

CSX said Quality Carriers has been a leader in in bulk chemicals transportation since 1913 and operates the most extensive bulk tank trucking fleet in North America, with around 2,500 drivers. Through a network of over 100 company-owned and affiliate terminals and facilities in key locations throughout the U.S., Canada, and Mexico, Quality Carriers provides transportation services to many of the leading chemical producers and shippers in North America. CSX said the transaction will create a unique multimodal chemicals transportation solution that will expand the reach of both CSX and Quality Carriers.

Quality Carriers’ management team, led by President Randy Strutz, will continue to lead the business as part of CSX.

The transaction is expected to close in the third quarter of 2021, subject to regulatory review and certain customary closing conditions.

Agrilead Patents Pizazz®

News, News Briefs, Southern Plains, Specialty

Agrilead Inc., Russell, Kan., said on May 6 it has been awarded U.S. Patent No. 10,986,769 relating to its Pizazz® Dry Seed Finisher, which was first commercialized for soybean seed treatment application in 2018. It said the product, when applied as a powder following liquid seed treatments, improves seed handling with less bridging, better seed flow through planting systems, and enhanced seed appearance.

The company said the patent is for discovery of a product with less fugitive dust during treatment application, along with better seed coverage and treated seed performance, compared to first-generation dry products.

Pizazz® and the patented technology are owned by Agrilead and exclusively marketed by Kalo Inc., Overland Park, Kan., as a result of an industry alliance formed between the companies in 2015.

“Pizazz® has been successfully used upon millions of soybean and cotton acres; with increasing demand for more product applied to the same small seeds, we see dry seed finishers as important tools for achieving higher levels of seed care performance,” said Kalo President Chuck Champion.

The parties said the technology represents the cornerstone upon which a broad portfolio of innovative dry seed finisher products will be built and introduced; the next innovation is expected in fourth-quarter 2021.

IFFCO Warns About Fertilizer Frenchie

India, News, News Briefs

Indian Farmers Fertiliser Cooperative Ltd. (IFFCO) has issued a statement about a fake firm named Fertilizer Frenchie that it said is offering dealerships and franchises in IFFCO’s name, according to the Press Trust of India (PTI).

IFFCO advised the public not to fall prey to misleading advertisements appearing on the internet and social media platforms. IFFCO said it is taking legal action against the entities.

Bion Applies for OMRI Listing for Solid Ammonium Bicarbonate Product

News, News Briefs, Specialty

Bion Environmental Technologies Inc., New York City, a developer of advanced livestock waste treatment and resource recovery technology, announced on May 7 that it has submitted a new application to the Organic Materials Review Institute (OMRI) for the listing of its crystallized ammonium bicarbonate/ammonium carbonate recovered in its third-generation (3G) waste treatment platform.

Bion’s initial OMRI application, a liquid ammonium bicarbonate solution, was approved for OMRI listing in May 2020 (GM May 15, 2020).

Craig Scott, Bion’s Director of Communications, noted, “Bion was notified by OMRI last week that several application restrictions placed on the initial product listing have been removed following a review and clarification of our original application. This will provide end users with more opportunity and flexibility for field applications. Bion anticipates future products listed with OMRI will no longer include manure-related application restrictions.”

AD Nitrogen, Bion’s new solid crystalline product that is the subject of the current OMRI application, is a concentrated and dewatered form of the previously approved liquid product. The company said it has several advantages over a liquid nitrogen product: less weight and volume than a liquid product; easier storage and handling; water soluble and can be easily diluted to its ultimate application rate; and more versatility to both liquid and solid blenders.

Citing OMRI’s website, Bion said OMRI is busier this year than last year, and as a result the new listing may take longer than the original listing.

Gensource Solidifies Offtake Agreement with Helm, Updates on Tugaske Project

Featured, Germany, News, Potash, Saskatchewan

Junior producer Gensource Potash Corp., Saskatoon, said on May 12 that on May 6 it executed a definitive offtake agreement with Helm Ag, Hamburg, Germany. The company had previously announced that Helm – through its U.S. subsidiary, Helm Fertilizer Co., Tampa – had inked a ten-year renewable offtake deal for 100 percent, or 250,000 mt/y, of the Tugaske Project’s production (GM Jan. 31, 2020).

Helm will market that product to its customers in the U.S. in an open-book manner, providing the direct link Gensource seeks between a potash producing facility in Saskatchewan and a clearly identified market.

The project is planned to be executed through a special purpose vehicle (SPV) that will construct, own, and operate the project. Gensource has previously disclosed that Helm plans to make an equity investment in that SPV alongside Gensource at financial close.

The capital structure of the SPV is being determined currently. The company said the terms of the shareholder agreement between Helm and Gensource with regards to their ownership of the SPV has largely been agreed upon, but the final agreement has not yet been executed.

As previously reported, KfW IPEX-Bank and Societe Generale SA have been appointed as joint lead arrangers for the proposed debt facility. The process toward debt commitment involves using the German export credit agency to provide credit insurance to the banks.

The final debt package will not be binding until the project reaches financial close, at which time the company anticipates that the definitive debt facility agreement will be executed with the banks.

In the meantime, Gensource reported that the project has progressed past the feasibility study level, having completed a FEED (Front End Engineering and Design) study. The updated NI 43-101 Technical Report – disclosed on March 22, 2021, and filed on SEDAR – is based on the FEED study, which includes significant detailed procurement work with the company’s selected process and equipment vendors.

The project is permitted under the Saskatchewan Environmental Assessment process and does not require an Environmental Impact Study. It has also been issued a Development Permit through the Rural Municipality of Huron, where the project is located.

Further licensing is required as detailed engineering proceeds and construction starts, under the Saskatchewan Environmental Protection standards, as well as building code requirements. Surface land for the process plant is under Gensource control, and all well pad leases and pipeline rights of way have been obtained. No further land purchases or agreements are required for the project.

K+S Boosts 1Q, Raises FY2021 EBITDA Guidance, Beats Estimates

Earnings, Germany, News, Specialty

K+S Group, Kassel, posted a 27 percent increase in first-quarter EBITDA, to €126.0 million (approximately $152.5 million at current exchange rates) on revenues of €733.3 million, up from the year-ago €99.3 million and €647.0 million, respectively.

Revenues increased 13 percent. The company cited higher sales volumes in both of its customer segments (Agriculture and the recently-created the Industry+) (GM April 23, p. 34), particularly of de-icing salt, which it said more than offset negative currency effects, as well as lower average revenues in the Agriculture customer segment.

Both EBITDA and revenue exceeded the average analyst estimates, according to a Bloomberg report. The average estimate for EBITDA was €112.9 million (range €82.6 million to €130.0 million), while the revenue average estimate was €693.3 million (range €610.0 million to €730.0 million).

Adjusted group earnings after taxes from continuing operations for the first quarter were €229.3 million, strongly improved on the year-ago after-tax loss of $40.5 million. The company cited the increase in EBITDA, as well as a €180 million write-up in the quarter of the valuation of its potash assets because of a reversal of impairment losses due to higher potash price assumptions. First-quarter adjusted earnings per share was €1.20 versus the year-ago €-0.21.

K+S has raised its full-year 2021 EBITDA guidance to between €500 million and €600 million, up from the previous forecast of €440 million to €540 million (FY2019: €267 million). The company cited “the rapid recovery” in overseas potassium chloride prices already seen in the first quarter and “the assumption of an improved early fills business with de-icing salt,” as well as its measures to significantly streamline its administration as behind the guidance boost.

The guidance continues to include the one-off gain of around €200 million generated by the closing of the REKS joint waste management venture. K+S reached a deal last December with Remex GmbH to bundle their respective waste management activities into a new joint venture, in which both companies are equal partners with 50 percent each (GM Dec. 31, 2020). The closing is expected this summer, but still remains dependent upon E.U. anti-trust authorities’ approval.

The new guidance has beat the average analyst estimate of €466.9 million, according to a Bloomberg report (range €306.0 million to €584.0 million, Bloomberg Consensus).

K+S completed the closing of the sale of its Americas operating unit to the U.S.-based Stone Canyon Industries Holdings LLC (SCIH), Mark Demetree and partners on April 30 (GM May 7, p. 44). K+S said it will use the entire net proceeds of the sale equivalent to around €2.6 billion to successively reduce company debt.

With the completion of the sale of the Americas operating unit, which comprised K+S’ Americas salt business, the company said it has implemented the most important component of the package of measures announced in December 2019 (GM Dec. 13, 2019), and that it is an important milestone in its planned reduction of its debt.

K+S’ net financial liabilities as of March 31, 2021, stood at €3.185 billion. As of March 31, 2021, the company’s debt-to-EBITDA ratio stood at 7.2x, unchanged from the 7.2x as of Dec. 31, 2020, and versus 5.1x as of March 31, 2020.

Agriculture Customer Segment

  1Q-2021 1Q-2020 % change
Revenues € million 469.0 453.7 +3
Europe € million 250.6 263.6 (5)
Overseas US$ 263.1 209.7 +25
       
Revenues € million 469.0 453.7 +3
Potassium chloride 252.5 245.9 +3
Fertilizer specialties 216.5 207.8 +4
       
Sales volumes million mt 2.01 1.90 +6
Europe 0.97 0.93 +4
Overseas 1.04 0.97 +7
Potassium chloride 1.24 1.22 +2
Fertilizer specialties 0.77 0.68 +14
       
Average price €/mt 233.3 239.2 (2)
Europe €/mt 258.4 283.8 (9)
Overseas US$/mt 253.0 216.6 +17

Agriculture customer segment revenues in the first quarter were up 3 percent, at €469.0 million versus the year-ago €453.7 million. The division’s sales volumes rose 6 percent to 2.01 million mt, up from the year-ago 1.9 million mt.

The company said the higher sales volumes more than offset negative currency effects and slightly lower average selling prices.

K+S highlighted the continued favorable demand for potash being observed in all regions relevant to the company. It said the further rises in potassium chloride prices since the beginning of 2021, especially overseas, should have an increasingly positive impact on the company’s product portfolio, which should also positively impact revenues and EBITDA over the next few quarters.

The company said Agriculture’s lower average European price for the first quarter compared with the same prior-year quarter reflected the product mix.

Going forward, the company said higher freight rates and energy prices could be more than offset by strict cost discipline and positive effect from currency hedging.

K+S CFO Thorsten Boeckers told analysts at a company first-quarter earnings call on May 11 that the company sees roughly €40 million higher freight cost in total in 2021 compared with last year. The CFO confirmed the company does have some mid-term freight contracts, which offer protection from rising freight costs.

The company’s energy costs this year are expected to be €20 million higher than in 2020.

The company sees global potash sales volumes this year reaching a record level of about 74 to 76 million mt (including just under 5 million mt of potassium sulfate and potash types with lower mineral contents). This is up from the company’s previous forecast of 72 million to 73 million mt. The company put 2020 global sales volumes at “a good” 74 million mt.

“We see most of the higher market development and demand coming mostly from MOP, mostly from South America and Asia,” K+S Chairman Burkhard Lohr told analysts.

K+S said it expects demand for fertilizer specialty potassium sulfate to increase slightly this year.

In terms of pricing, the company expects “a significantly higher” average overseas price for potassium chloride for 2021 compared to last year. For fertilizer specialties, it continues to expect a stable price level overall on average for the year.

K+S sees Agriculture customer segment sales volumes for full-year 2021 at >7.5 million mt (FY2020: 7.3 million mt).

Responding to an analyst’s question about Bethune volumes into North America, Boeckers said the company of course is trying to optimize values for product from the Bethune potash operation in Saskatchewan.

“That means we ship whatever we can to areas with high netbacks, whilst respecting our customer relationships,” he said.

“Granulation capacity at Bethune is still in ramp-up and we already are shipping all we have, including to the Brazilian market. We will double the volume into the U.S. this year, coming from close to 100,000 mt in 2020, and will end 2021 with a volume something slightly more than 200,000 mt. That’s the maximum we can do for the time being,” said the CFO.

The 200,000 mt volume expectation is a step-up from the 150,000 mt expectation in March (GM March 12, p. 28). Lohr said at a company’s FY2020 earnings call in March K+S already had used up all the options that it has onsite at Bethune to increase granular production compared to standard production, adding that a limiting factor for shipping to the U.S. market from the site is logistics.

Bethune produced almost 2 million mt of potash last year for the first time. K+S said this week it expects the operation to achieve breakeven on an EBIT basis this year.

First-quarter revenues for the Industry+ customer segment increased 38 percent on the year to €264.3 million, up from €191.9 million, boosted by the above-average de-icing salt business, which continued over the Easter holidays.

Sales volumes of de-icing salt totaled 1.35 million mt versus the prior-year 0.21 million mt, while total Industry+ sales volumes were 2.43 million mt, up from 1.30 million mt a year ago.

Sales volumes of products for chemical and industrial applications increased in the first quarter compared with the year earlier, but sales volumes for products for the pharmaceutical and food industries declined due to covid-19-related lower demand in the quarter.

K+S sees full-year de-icing salt volumes at >2.6 million mt (FY2020:0.9 million mt, but normal year volumes are typically 2-2.25 million mt).

Due to the divestment of the Americas operating unit , K+S has combined the business of its Communities and Consumers business segments into its Industry+ business segment given the ensuing reduction in the Communities and Consumers segments’ business.

KBR, Cummins Ink Green NH3 MOU

Ammonia, Eastern Cornbelt, Houston, TX, News, News Briefs

KBR, Houston, on May 6 signed a Memorandum of Understanding (MOU) with Cummins Inc., Columbus, Ind., to offer a complete and integrated solution to produce ammonia from renewable sources, commonly referred to as green ammonia.

KBR plans to integrate Cummins’ proton exchange membrane (PEM) electrolysis technology into its proprietary green ammonia solution K-GreeN®. The parties said they both have unique strengths and market leadership in ammonia technology and electrolysis, which when combined aims to deliver a comprehensive and competitive green ammonia offering for clients worldwide.

The MOU is a non-exclusive agreement under which KBR and Cummins will identify areas of deeper collaboration and specific opportunities worldwide.

Kalium on Track for September SOP Production

Australia, News, News Briefs, Specialty, Sulfate of Potash

Kalium Lakes Ltd., Balcatta, Western Australia, reported on May 13 that its Beyondie Sulfate of Potash (SOP) Project in Western Australia is on track for the first commercial production of SOP in September 2021.

“The power station for the Beyondie SOP Project has now been commissioned and is ready to provide power for the process plant commissioning that is due to start in the next few weeks,” said Rudolph van Niekerk, Kalium CEO. “This milestone, combined with harvesting activities that are in full swing and an operations team that is ready for production, represents a major step forward and significantly de-risks the project in meeting its first production targets. Importantly, the Beyondie SOP Project remains on budget and on schedule to achieve first SOP sales next quarter.

“The SOP plant is also entering final stages of construction, with work fronts open to all disciplines, including electrical, instrumentation, and piping work,” van Niekerk continued. “Completion of the standard grade SOP plant is being prioritized and this will be closely followed by completion of the compaction plant, which use the standard SOP to produce granular will SOP.”

Kalium’s projected initial SOP production capacity is 90,000 mt/y of SOP. The company has a binding 10-year offtake agreement for Beyondie with Germany’s K+S Group for the purchase of up to 90,000 mt/y of SOP.

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