All Posts from June 15, 2018

Ammonium Polyphosphate

Ammonium Polyphosphate, California, Eastern Cornbelt, Market Watch, Pacific N.W., Western Canada, Western Cornbelt

Eastern Cornbelt:

10-34-0 was steady at $375-$380/st FOB in the Eastern Cornbelt.

Western Cornbelt:

The 10-34-0 market remained at $355-$365/st FOB in the Western Cornbelt.

California:

The 10-34-0 market was steady at $424-$429/st FOB Helm, with 11-37-0 remaining at $454-$459/st FOB in the state.

Pacific Northwest:

10-34-0 remained at $397-$412/st FOB in the Pacific Northwest,depending on location. The 11-37-0 market was quoted in the $427-$442/st FOB range in the region.

Western Canada:

The 10-34-0 market remained at C$555-$560/mt DEL in Western Canada for the last sales.

Interoceanic Corporation – Management Brief

Management Briefs

Interoceanic Corporation (IOC) announced that Matt Bohan has joined the company as director of international trading. Bohan comes to IOC with over 25 years of industry experience, having held prior positions at CHS Inc. and Toepfer International. He will be responsible for international trade and sales as well as NOLA urea, and can be reached at 813.992.5554.

IOC and its affiliate, PCI Nitrogen, produce premium grade granular ammonium sulfate and liquid ammonium thiosulfate at the PCI Nitrogen facility in Pasadena, Texas, the largest producer of synthetic grade ammonium sulfate in North America.

TFI Praises Passage of Water Infrastructure Bill

News, News Briefs

The U.S. House of Representatives on June 7 voted overwhelmingly in favor of the Water Resources Development Act of 2018 (H.R. 8), which authorizes improvements to the nation’s ports, inland waterways, locks, dams, flood protection, ecosystem restoration, and other water resources infrastructure.

The bill, which passed the House on a 408-2 vote, authorizes the U.S. Army Corps of Engineers to sustain the nation’s water infrastructure, and to offset the cost of newly authorized projects by deauthorizing idle projects. The bill also calls for an analysis of the effects of moving the Corps’ civil work out of the Pentagon and into another agency or to a completely new entity.

“Our nation’s transportation infrastructure is critical to agriculture and rural America’s comparative advantage in world markets, and the Water Resources Development Act, or WRDA, is a vital support for that network that must be reauthorized by Congress in 2018,” said Chris Jahn, president of The Fertilizer Institute (TFI). “WRDA is the foundation for the modernization of our nation’s inland waterways and ports, which are an integral component of the fertilizer distribution system. TFI and our members are pleased to see it pass with such tremendous and bipartisan support.”

Jahn highlighted the need for modernizing the country’s water infrastructure by noting a 700 percent increase in unscheduled work stoppages for repairs to aging locks and dams. “These delays are not only disastrous for the farmers who receive much of the almost 70 million tons of fertilizer each year via our nation’s waterways, they can also raise the prices of everyday goods and food for consumers,” he said.

The bill now moves to the Senate, which is expected to take up its version of the legislation this summer. The Senate Environment and Public Works Committee unanimously approved the bill in May.

“The Senate must act to give agricultural customers the modern and efficient waterway system they need,” Jahn said. “Half of all food grown around the world today is made possible through the use of fertilizer. But if that fertilizer can’t be efficiently transported throughout the supply chain, or is unnecessarily delayed, we could have a serious food and economic crisis on our hands. Our nation’s farmers, fertilizer producers, retailers, and shippers are counting on the Senate to act quickly.”

Danakali Inks SOP Deal with EuroChem; CEO to Exit, CCO, Chairman Named

Africa, Australia, Featured, News, Sulfate of Potash

Junior company Danakali Ltd., Subiaco, Western Australia, on behalf of Colluli Mining Share Co. (CMSC), said on June 11 that it has a binding take-or-pay offtake agreement with EuroChem Group AG, Zug, Switzerland, for up to 100 percent of Module I Sulfate of Potash (SOP) production from the Colluli Potash Project. The project, located in Eritrea, East Africa, is 100 percent owned by CMSC, a 50-50 joint venture between Danakali and the Eritrean National Mining Corp. (ENAMCO).

EuroChem will take, pay, market, and distribute up to 100 percent (minimum 87 percent) of Colluli Module I SOP production. EuroChem may use a portion of Colluli SOP to produce NPKS at its facilities in Antwerp, Belgium, and Nevinnomyssk, Russia. The balance of SOP provided to EuroChem will be sold through their international channels.

EuroChem said the agreement envisages total annual output of 472,000 mt. With EuroChem taking at least 87 percent, CMSC has the option to sell up to 13 percent through alternative sales channels.

The term of the agreement is 10 years from the date of commissioning of the Colluli SOP processing plant, with an option to extend for a further three years if agreed by EuroChem and CMSC. EuroChem may terminate the agreement if first commercial production has not occurred by July 1, 2022 – well beyond CMSC’s production commencement expectations. Either party may terminate the agreement if a project financing agreement has not been executed and first drawdown achieved within 14 months of the signing of the agreement. The Danakali and CMSC boards, and the Eritrean Ministry of Energy and Mines, have approved CMSC’s entry into the agreement.

The project comprises a 1.1 billion mt JORC-2012 SOP ore reserve containing potassium-bearing salts in solid form that is suitable for potash fertilizer production.

EuroChem said the deal fits in with its increased focus on premium products. “We are excited about participating in this project with CMSC, as part of our growing global presence,” said EuroChem Group AG CEO Dmitry Strezhnev. “Colluli is one of the closest SOP deposits to a coastline anywhere in the world and, in solid form, the salts at Colluli can be processed immediately, significantly reducing the time between mining and revenue generation.” Other EuroChem premium products include its Nitrophoska® range of complex fertilizers and its stabilized fertilizer brand, Entec®.

With its Usolskiy and VolgaKaliy greenfield potash projects coming online this year, EuroChem notes that it will become one of three companies worldwide to produce fertilizers in all three primary nutrient categories, and a top-five global producer by total nutrient capacity.

“We could not be happier with this result,” said Danakali CEO Danny Goeman. “EuroChem is an outstanding partner for the project. EuroChem has a wealth of experience and expertise in the fertilizer sector.”

The deal was one of Goeman’s last major accomplishments as CEO. On June 14, Danakali announced that he is leaving the company on Aug. 3 to join a Perth-based mining company. He joined Danakali in 2016 as head of marketing before assuming the role of CEO in 2017. During his time, Danakali said he developed the offtake strategy and contract framework, and led the offtake negotiations on behalf of CMSC. He led the process that resulted in the agreement with EuroChem.

Effective immediately, Niels Wage was appointed as the new chief commercial officer.  The company said he has significant shipping, trading, and commodity experience and has held a number of senior management roles with BHP, including vice president, potash; vice president, freight; and vice president, diamonds. He will be responsible for conducting a detailed joint logistics study with EuroChem, further developing CMSC’s product sales strategy, developing plans for CMSC’s own product export terminal at Anfile Bay, some 87 kilometers from Colluli, and assessing the expansion of CMSC’s product range.

Seamus Cornelius, previous non-executive chairman, has been appointed executive chairman. He is a corporate lawyer and former partner of a leading Australian law firm. The company said he has a high degree of expertise in cross-border transactions, particularly in the resources and finance sectors. He is a member of the company’s audit committee and technical and risk committee, and is chairman of CMSC.

Industrial Phosphate Plant Eyed for Peru

News, Peru, Phosphate, Specialty

CROPS Inc., Vancouver, formerly Focus Ventures (GM April 13, p. 31; March 9, p. 28), told shareholders this month that it is studying the feasibility of building an elemental phosphorus (P4) plant to utilize phosphate rock from its Bayovar 12 concession in Sechura, in northern Peru. It noted that the product is an essential ingredient for the production of glyphosate-herbicide such as Roundup, engine oil additives such as phosphorus pentasulphide (P2S5), and fire and flame retardants.

CROPS notes that the producers of these products in Europe and North America are large global chemical groups, which import the high majority of their P4 requirements primarily from North Vietnam, Kasakhstan, and to a much lesser extent China. Monsanto’s (now Bayer’s) Idaho P4 facility is for captive use.

CROPS said that in April it hired one of the industry’s foremost P4 consultants to look at the rational and economic potential of building a P4 production facility at Bayovar. In addition, it said talks are ongoing with large P4 consumers to gauge their interest. It said this could result in a joint venture, fixed offtake agreement, and/or equity participation in the concession.

The company touts the Bayovar location as being strategically located, with developed infrastructure, access to cheap power and plentiful labor, paved highways to container ports, and no social or environmental issues. The company said a P4 plant would be in addition to marketing product to traditional agriculture and specialty fertilizer markets.

CROPS also noted that the Bayovar site has natural gypsum deposits near to surface, and that the company annually produces 80,000 mt. It said depending on the individual quarter, it can generate enough revenue to cover the entire operational cost on a yearly basis. It said it has been working with the government to attain the necessary environmental permits to open the northeastern part of the Bayovar concession, which will enable it to continue mining and commercializing gypsum going forward.

CROPS said a recent milestone was reaching an agreement with Sprott Resource Lending Corp., Toronto. They will convert the entire remaining amount of their US$3.0 million (C$4 million) debt facility to equity through a convertible debenture. The agreement furthermore limits Sprott to not owning more than 20 percent of issued shares of CROPS. The company said this enables it to work with potential financiers and strategic partners with a debt-free ownership structure on the project. CROPS owns 70 percent of the Bayovar 12 concession, and it said the new deal with Sprott makes a straightforward investment case to present to financial institutions.

To further support its ongoing development activities, CROPS announced a convertible debenture private placement financing to raise C$6 million. Of this, Sprott will convert C$4 million and the balance will go to continue developing business models for P4 production, generating potential jv relationships, and marketing.

EuroChem Group AG – Management Brief

Management Briefs

EuroChem Group AG, Zug, Switzerland, said on June 13 that Kuzma Marchuk has been appointed CFO, succeeding Andrey Ilyin, who will be leaving the company on June 30 after ten years as CFO.

Marchuk, who joined the EuroChem board of directors as a non-executive director in 2017, is also a member of the board of SUEK, where he served as deputy CEO and CFO from 2011- 2016. Before that he was CFO, and from 2007, a member of the board of Uralkali.

Haifa Group – Management Brief

Israel, Management Briefs, Specialty

Haifa Group, Haifa, Israel, recently named Motti Levin as CEO. He succeeds Nadav Shachar, who served the group for nearly ten years. For the past two decades, Motti has held key positions in several multinational companies that operate mainly in the chemical and agriculture sectors, including Israel Chemicals Ltd., Netafim, The Maman Group, UTI Logistics, and Gadot Chemicals. In the latter three companies he served as CEO.

Boards Approve Agtegra, Farmland Merger; Farmland Member Vote Scheduled for July

Featured, News, Northern Plains

The boards of directors of Agtegra Cooperative, Aberdeen, S.D., and Farmland Co-op Inc., Oakes, N.D., announced on June 8 that they have approved a merger proposal between the two organizations. If the merger is supported by Farmland members in a July vote, Farmland will officially become part of Agtegra.

The two co-ops announced in April that they had signed a letter of intent (LOI) to “study the benefits, opportunities, and risks” of a merger (GM May 11, p. 1). Farmland is a stock cooperative that was formed in 1975, and currently has 11 full-time employees and approximately 140 members. The company operates an energy business that provides propane and refined fuels, as well as a tire shop and a convenience store.

Agtegra began operations in February (GM Jan. 5, p. 1) and was formed from the merger of South Dakota Wheat Growers and North Central Farmers Elevator (NCFE), Ipswich, S.D. The company has 900 employees at more than 60 locations in North and South Dakota, and serves approximately 7,850 member-owners and 22,600 equity holders. In addition to offering grain and agronomy services, Agtegra offers its members aerial application services, fuel, animal feed, and precision ag hardware and software products and services.

“We are excited about this potential opportunity to expand Agtegra’s energy business and look forward to working with Farmland’s members, patrons, and employees,” said Agtegra CEO Chris Pearson in a June 8 letter to members. “Having Farmland join Agtegra would allow us to build on their expertise and enhance our fuel offering to our North Dakota customers. It also would allow us to increase our capabilities in an area that we already serve.”

Agtegra noted that it has no plans to enter the convenience store business, so that portion of Farmland’s business will be sold if the merger proceeds.

ICL Expands Specialty Capacity in S.C.

Featured, News, Specialty

ICL Specialty Fertilizers, Dublin, Ohio, a unit of Israel Chemicals Ltd. (ICL), Tel Aviv, is expanding its existing manufacturing operations in Dorchester County, S.C. With plans to increase capacity, the company expects to create approximately 25 new jobs.

ICL is relocating its Ohio operations to its existing Summerville, S.C., facility, which is located at 2755 West 5th North Street, according to the South Carolina Department of Commerce. The expansion is expected to be completed in fourth-quarter 2018, and hiring is already underway.

“ICL Specialty Fertilizers has enjoyed many years of successful operations in the Lowcountry,” said Director of Operations Craig Bova. “The business climate and culture have always been a great fit. We are very excited about the investment at our Summerville site and look forward to the continued partnership with the county and the state.”

In 2011, ICL bought Scotts Professional Products business (GM March 7, 2011; Dec. 13, 2010), which included the Osmocote brand, along with research and development and production sites, which included a plant in North Charleston, S.C. The unit was renamed Everris, but later became ICL Specialty Fertilizers. In 2012, ICL also acquired the manufacturing capacity of X-Calibur Plant Health Co. in Summerville (GM May 7, 2012). The purchase included a fertilizer coating line and associated handling, processing, and packaging equipment. The capacity increase will occur at this site.

ICL did not respond to inquiries for further comment.

Scotts Reports Record May, Completes Sunlight Supply Acquisition

News, Specialty

The Scotts Miracle-Gro Co., Marysville, Ohio, said on June 12 that consumer purchases of its lawn and garden products were a record $565 million in May, resulting in the near full recovery of the decline reported through the first seven months of the fiscal year.

“The recovery in our U.S. Consumer business in May speaks to the strength of our brands, the resilience of the lawn and garden category, and the continued support of consumers and our retail partners,” said Jim Hagedorn, chairman and CEO. “It’s also a tribute to the outstanding work of our associates, who understood that the delay to the start of our season was simply that – a delay. We are cautiously optimistic that consumer purchases will finish the year in positive territory, but we’re extremely pleased with the underlying strength of this business even if we fall short of that goal.

“While consumer purchases have been tracking positively for weeks, the combination of the slow start to the season and improved inventory planning by our retail partners is causing us to lower sales guidance for our U.S. Consumer segment,” he added. “Our original guidance assumed there would be a 2- to 3-point gap between POS and our shipments, which is, in fact, what we’re seeing.”

Scotts said on a year-to-date basis through June 10, consumer purchases in the U.S. Consumer segment were almost flat from 2017 levels, with positive growth in lawn fertilizer, grass seed, growing media, and mulch. Consumer purchases were positive in the home center and hardware channels, slightly offset by continued declines in the mass retail channel.

Scotts now expects reported full-year sales to be within a range of flat to 2 percent higher than year-ago levels, compared with a previous range of 2-4 percent growth. This guidance assumes a decline in U.S. Consumer sales of 1-3 percent, versus a previous projection of 0- 2 percent growth. Sales in the Hawthorne segment are expected to increase 25-30 percent for fiscal 2018, driven by the recently completed Sunlight Supply (GM April 20, p. 1) acquisition. Excluding Sunlight, but including previous acquisitions, Hawthorne sales are expected to be slightly down from 2017.

Non-GAAP adjusted earnings are expected to range from $3.70-$3.90 per share, including dilution of approximately $0.30-$0.40 associated with the Sunlight transaction.

Separately, the company said it took actions earlier this month resulting in annualized savings of $15 million associated with its commitment to achieving $35 million in synergies related to the Sunlight acquisition. Further actions are expected before the end of the current fiscal year, and total savings are expected to be mostly realized by the end of calendar year 2019. The company formally launched “Project Catalyst” to achieve these synergies. Benefits from the transaction are expected to improve year-over-year non-GAAP adjusted earnings by $0.60-$0.80 per share in fiscal 2019.

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