All Posts from April 16, 2021

OCI, ADNOC Consider IPO of Fertiglobe

ADNOC - Abu Dhabi, Featured, News, Nitrogen, Scandinavia

Netherlands-based OCI N.V. and Abu Dhabi National Oil Co. (ADNOC) confirmed on April 12 that they are considering an initial public offering (IPO) of their nitrogen partnership Fertiglobe, headquartered in Abu Dhabi. The companies declined to provide any additional information at this time.

Fertiglobe has a production capacity of 5 million mt/y of urea and 1.5 million mt/y of merchant ammonia, with OCI currently holding a 58 percent stake and ADNOC a 42 percent stake. The joint venture was formed in September 2019 following the two companies’ agreement to combine ADNOC’s fertilizer business into OCI’s Middle East and North Africa (MENA) nitrogen fertilizer platform (GM Oct. 4, 2019).

“The new combined company is underpinned by a young asset base and a robust storage and distribution infrastructure with access to key ports on the Mediterranean, Red Sea, and Arabian Gulf,” OCI and ADNOC said in a combined media statement at the time of Fertiglobe’s launch. “Fertiglobe’s complementary production and distribution locations bring geographical diversity and enhanced market access, benefiting both existing and new customers.”

The business is expected to be next in line for a listing, after ADNOC completes an IPO of its drilling business, according to a Reuters report, citing unnamed sources. ADNOC and OCI invited international and local banks to bid for potential roles in Fertiglobe’s public share-sale, with the firms submitting bids last week for the deal that could raise at least $1 billion, Reuters said.

At the time of its launch, Fertiglobe was pitched by OCI and ADNOC as the largest export-focused nitrogen fertilizer platform globally and the largest producer in the MENA region, with combined saleable capacity representing approximately 10 percent of the combined ammonia and urea global seaborne exports in 2018.

ADNOC’s sole IPO to date was the listing of its fuel-retailing unit, Abu Dhabi National Oil Co. for Distribution PJSC, in 2017. According to Bloomberg, Petrostates in the Persian Gulf are trying to bolster their economies after they were hit last year by coronavirus lockdowns and the crash in oil prices. They also want to diversify from fossil fuels by using money raised from their oil assets to invest in other industries.

In recent years, international and local funds have invested more than $20 billion in ADNOC assets such as pipelines and property. Last June, the company sold leasing rights over natural-gas pipelines to a consortium including Global Infrastructure Partners and Brookfield Asset Management Inc. in a deal worth $10.1 billion.

Neighboring Saudi Arabia – the world’s biggest oil exporter – has a similar strategy. It raised almost $30 billion from the IPO of state energy firm Saudi Aramco in late 2019. Last week, Aramco announced that it was selling leasing rights in pipelines for $12.4 billion to a consortium led by U.S. investor EIG Global Energy Partners LLC.

Conserv FS Breaks Ground on Major Expansion

Eastern Cornbelt, Featured, News

Agricultural cooperative Conserv FS on April 15 announced a large expansion of its Waterman, Ill., facility, with a recent groundbreaking event held for a new 7,500-ton dry fertilizer building equipped with a 24-ton blender and a NTEP certified Auto-Batch blending system. The new dry building will have the capacity to load eight semi-trucks per hour, the company said.

The project will also include 1.3 million gallons of liquid fertilizer storage integrated with a crop protection mixing facility and warehouse. The new liquid facility will be equipped with three load bays providing both top and bottom load options with “hot-load” capabilities, with each bay capable of filling six semi-loads per hour. Also included will be a 24/7 unattended bay for after-hours availability of nitrogen solution loads with nitrogen stabilizers.

“The loading speed of this updated facility will be up to five times faster than the existing facility, allowing us to service our customers at an increased pace while lowering our daily operating expenses through improved efficiencies,” said Adam Day, Agronomy Marketing and Sales Manager at Conserv FS. “Storage capacities will allow for us to effectively handle customers in-season needs and keep them moving efficiently.”

Both the dry fertilizer and the liquid facility will contain automated systems integrated with ordering, operations, and accounting software, providing a streamlined process and improved flow of information to the customer. In addition, the expansion will include 72,000 gallons of bulk crop protection product storage at the facility, along with ample mini-bulk and packaged good storage. All inbound and outbound loading will be indoors for ease of operation and environmental stewardship.

“These state-of-the-art facilities are built with safety and the environment being foremost in our thoughts, while at the same time providing an outstanding customer experience to our patrons, gaining them valuable time during peak-season operations,” said Jeff Kimmel, Facility Projects Manager at Conserv FS.

Greystone Construction is serving as contractor for the expansion, which is predicted to be completed before the end of the year. “This large project at our Waterman facility demonstrates our commitment to the future of agriculture in our territory,” said Dave Swigart, General Manager of Conserv FS. “We’ve been serving agriculture for nearly 100 years, and this project is an example of our commitment to serve the farmer of the future.”

Conserv FS was incorporated in 1928 and is a member of the Growmark System. The company offers agronomy, grain marketing, energy, and turf services and products from nearly 20 locations in Illinois and Wisconsin.

Florida Pledges Funds to Close Piney Point

Featured, Florida, News, Phosphate

The state of Florida plans to budget as much as $115 million to treat contaminated water and take steps to permanently close the site of the former Piney Point phosphate plant after a recent leak at a phosphogypsum stack (GM April 2, p. 29) caused the release of an estimated 215 million gallons of contaminated water into Port Manatee and Tampa Bay.

During a visit to the site on April 13, Florida Governor Ron DeSantis said he was redirecting $15.4 million in Florida Department of Environmental Protection (FDEP) funds to pretreat water at the Piney Point site in case additional controlled discharges are needed to reduce pressure in the reservoir, the Orlando Sentinel reported. DeSantis also said investigators are working to determine if legal action can be taken against HRK Holdings, the owner of the Piney Point site.

“Rigorous water quality monitoring will continue so the state can assess any potential ecological impact from this event,” DeSantis said. “This data will be used by DEP as they move forward with enforcement to hold HRK accountable. And I’m further directing DEP to fully investigate the incidents here at Piney Point and to take any and all legal actions to ensure we hold HRK and any other actors fully accountable.”

Florida Senate President Wilton Simpson also said the state legislature is expected to provide $100 million, according to the Orlando Sentinel, with the hope that the FDEP will be able to complete a closure plan for the site by the end of the year. The Florida Senate on April 7 added $3 million in its proposed budget to start cleanup efforts at Piney Point. Simpson had earlier estimated the total cleanup cost at $200 million, and suggested using money from the state’s share of the American Rescue Plan federal stimulus package.

The recent troubles at Piney Point began on March 26, when an HRK site manager warned the FDEP of a leak at the site. HRK notified FDEP again on March 28 that a boil was observed at the foot of the gypstack, prompting the FDEP to allow an emergency release of wastewater from the stack. On March 30, HRK began controlled discharges as part of its efforts to ensure the structural integrity of the water management system at the site.

Fears of a stack collapse prompted the evacuation of some 316 local residents on April 2, with DeSantis issuing an executive order on April 3 declaring a state of emergency in the three counties potentially affected by the 79-acre reservoir. The evacuation was lifted on April 6 when the discharges were able to reduce water levels in the NGS-South compartment of the reservoir to 232 million gallons from the initial 480 million gallons (GM April 9, p. 1).

The discharges were stopped on April 9, and FDEP reported on April 10 that the leak in the gypstack had been sealed with a steel plate. Heavy rains over the weekend added additional water to the stack, however, with FDEP on April 11 estimating that rainwater had increased water levels in the south pond from 217 million to 221 million gallons.

FDEP has stressed all along that the major problem with the water was its nutrient content, and that it was not radioactive. It said teams are now deploying nutrient reduction and removal treatments onsite to address any required discharges in the future. Environmental groups and local residents, however, are concerned that the discharged wastewater could result in algal blooms and fish kills in Port Manatee and Tampa Bay.

“The state has to make adequate investment to clean the water, close the site, and make commitments to regulation and enforcement that ensures we are never on the edge of a disaster like this again,” Earthjustice Attorney Bonnie Malloy said in an April 13 statement. “This is a first step, and we need to see the follow-through before we celebrate. The DEP needs to investigate the other Florida phosphate waste sites and be proactive in managing this threat. At this point, there’s no excuse for any of these phosphate facilities to escape scrutiny.”

The southern pond is the largest of three reservoirs of contaminated water on the Piney Point site, which was abandoned by Mulberry Phosphates when it declared bankruptcy in February 2001. Emergency discharges from the stack have occurred several times in the past due to heavy rains, including in 2003 (GM Jan. 13, 2003), and again in 2013 (GM Sept. 9, 2013).

Landus, NuWay Launch Partnership Agreement

Featured, News, Western Cornbelt

Landus, a farmer-owned cooperative based in Ames, Iowa, announced on April 12 that it has entered into an agreement with NuWay-K&H, another Iowa cooperative, on a new model designed for collaboration that the companies describe as “an innovative alternative to traditional mergers and acquisitions.”

According to a statement from Landus and NuWay, the new strategy is aimed at linking cooperatives and independents to collaborate on grain, feed, soybean processing, agronomy, data, technology, logistics, and back-office functions, while allowing each entity to maintain its autonomy and preserve its local community presence.

“Locally-based agricultural cooperatives and independent businesses have long played an important role contributing to farmer livelihoods and rural vitality,” said Matt Carstens, Landus President and CEO. “This strategy of local ag companies collaborating together is designed to modernize and protect the viability of these vital business offerings and services.”

Financial terms and additional details of the agreement were not disclosed, but a statement provided by the two companies said NuWay will become an optimization account with Landus while continuing to maintain a separate board of directors, employees, and operations. The two business said additional cooperatives and business are expected to join, with each agreement developed on a case-by-case basis and tailored to the strengths of each party.

Landus and NuWay said the strategy is “focused on improving service and competitiveness to drive more value for its collective membership and customers, while maintaining local influence and identity.” The companies said this approach also provides the opportunity to maximize capital investments, infrastructure capacity, and employee talent.

“NuWay-K&H is proactively entering this agreement with Landus to build on our cooperatives’ strengths and stay ahead of the marketplace,” said Kevin Jones, President and CEO of NuWay, who also joined Landus as Minnesota Business Unit Leader, effective April 12. “I’m looking forward to working with the Landus team and continuing my commitment to the success of NuWay-K&H Cooperative customers in my expanded role,” he said.

Landus was formed in 2016 through the merger of Farmers Cooperative Co. (FC) in Ames and West Central Cooperative in Ralson, Iowa (GM April 15, 2016). With 7,000 farmer-owners and 600 full-time employees at locations in more than 60 communities, it ranks as Iowa’s largest agricultural cooperative, providing products and services in agronomy, grain, feed, animal nutrition, and data.

NuWay-K&H has locations in northern Iowa and southern Minnesota, serving roughly 5,500 farms and non-farm customers with agronomy and energy products and services. The company has 85 full-time and 50 seasonal employees, and is headquartered in Clear Lake, Iowa.

AgVend Adds Grain Business to Grower Portals

News, News Briefs, Northern Plains

Agricultural e-commerce business AgVend, Minneapolis, Minn., on April 8 announced that it is adding its Grain Business Unit to the Grower Portals ecosystem that the company introduced last year (GM Dec. 11, 2020).

AgVend said the expansion of its Grower Portal product will give cooperatives and grain elevators the ability to provide customers with easy digital access to their grain accounts and current market information. Growers can eSign contracts, review scale tickets in real-time, and monitor cash bids through their local elevator’s AgVend-built mobile app.

“The unique aspect of this launch is that our cooperative partners can now offer their growers a single mobile app to manage their grain, agronomy, and account information,” said Alexander Reichert, Co-founder and CEO of AgVend. “This means growers can see details of a grain contract, purchase products from an agronomic plan, and then pay an invoice with an existing credit line in one session on one platform.”

To complement this initial launch, AgVend said it will complete integrations later this year with the leading offer management systems to provide growers an easy way to submit grain offers and manage settlements through their Grower Portals. AgVend’s Grower Portal is accessible to producers by downloading their ag retailer’s AgVend-built mobile app or by visiting their online portal.

“Similar to what we offer our partners’ sales agronomists, grain merchandisers now have access to their customers’ information through a few clicks on a mobile app,” Reichert said. “Also, because growers have full access to grain markets and their account information, the Grower Portal cuts down on common grower questions, such as scale ticket status and executed grain contracts.”

The company said it will continue to build its Grower Portals platform by adding its Energy and Feed Business Unites later this year. “The design of our Grower Portals is to make it easier for producers at our partner retailers to do business where, when, and how they want, 24/7,” Reichert said. “The launch of grain and the subsequent business units will ensure that this extends across their entire operation.”

AgVend reported last August (GM Aug. 28, 2020) that it would be sunsetting its initial product, the AgVend.com Marketplace, which allowed farmers to purchase crop production inputs and services online from ag retailers in their own community. The company said it would focus instead on its AgVend-Powered Grower Portals, a white-label product line introduced in April 2020 that allows a more direct connection between growers and their preferred retailer.

Toxic Cloud Linked to Fertilizer Plant in Toronto

Canada, News, News Briefs

A portion of Highway 400 in Toronto, Ont., was closed on April 14 after a chemical spill and reaction at a fertilizer plant released an orange cloud of toxic smoke. No injuries were reported, but occupants of the plant and nearby buildings were evacuated for several hours as emergency responders declared a level 3 HAZMAT situation..

Initial reports said the incident occurred at an aluminum plant, but fire officials later clarified the location as an industrial fertilizer factory. The name of the fertilizer facility was not revealed. Toronto firefighters and other emergency personnel responded at about 10:50 a.m., but refrained from using water for fear of exacerbating the reaction.

The reaction and cloud were allowed to dissipate on their own. Road closures lasted for nearly an hour, with most reopened at about 12:35 p.m.

TFI Announces Updates to Nutrient Use Tools

News, News Briefs, U.S.

The Fertilizer Institute (TFI) on April 14 announced two new updates to crop nutrient use tools that provide the fertilizer industry and agronomic professionals with scientifically-backed data to better track nutrient use and nutrient balances across the U.S.

The Nutrient Use Geographic Information System (NuGIS) and the Soil Test Summary are an index of performance, both agronomic and environmental, indicating how well a cropping system uses crop nutrients. TFI said the two platforms can help provide an estimate of nutrient deficiencies and nutrients susceptible to loss, providing the fertilizer industry, farmers, and scientific stakeholders with insight into improving nutrient use efficiency and nutrient balance.

“The fertilizer industry relies on accurate data to make strategic business decisions,” said Corey Rosenbusch, TFI President and CEO. “Using data from the NuGIS and Soil Test Summary platforms, TFI is uniquely positioned to collaborate with partners and soil testing labs to aggregate and analyze this information for our members and stakeholders.”

NuGIS provides county- and watershed-level estimates of nutrients applied to the soil from fertilizer and livestock manure, and nutrients removed by harvested agricultural crops. Nutrient application data comes from fertilizer sales data collected by the American Association of Plant Food Control Officials (AAPFCO) and USDA livestock sales, which are used to estimate manure application. Nutrient removal data is calculated using USDA annual yield data.

TFI said NuGIS is a unique data set showing nutrient use efficiency and the nitrogen, phosphorus, and potassium balance in cropland across the nation. The tool’s maps and charts show distribution of nutrient concentrations, allowing for the determination of where nutrients are either being mined or building up in agricultural production fields.

The Soil Test Summary is an interactive tool for displaying aggregate soil nutrient levels from public and private soil test labs by state from June 2019 through July 2020. Both NuGIS and the Soil Test Summary are collaborations between TFI, the Foundation for Agronomic Research, and Plant Nutrition Canada, and are part of a broader collection of agronomic materials made available to the fertilizer industry and the agronomic community by TFI.

Unigel Starts Production at Former Petrobras Site

Ammonia, Ammonium Sulfate, Brazil, Featured, News, Nitrogen, Urea

Brazil’s Unigel Group confirmed that it has launched production at one of two nitrogen fertilizer plants acquired from Petrobras last year. Unigel, through its wholly-owned Proquigel Química subsidiary, secured full possession of the leases of Petrobras’ nitrogen fertilizer plants in Bahia (Fafen-BA) and Sergipe (Fafen-SE) in August (GM Aug. 14, 2020).

Unigel Commercial Director Wendell Souza confirmed that the Sergipe factory launched production in early April after a period of general maintenance and commissioning. He said ammonia production at the site is already stabilized, while the urea lines are still under final refinements.

Unigel Group CEO Roberto Noronha Santos indicated at the time of the completion of the leasing process that the reactivation of the two units was expected to occur in January 2021. More recently, the company reported that it planned to start urea production in February (GM Jan. 29, p. 1).

Unigel earlier reported that it expects to be the largest producer of ammonia and urea in Brazil in 2021, according to a statement by New York City-based international law firm Simpson Thacher. Unigel is also Brazil’s largest national producer of ammonium sulfate, with one 400,000 mt/y production site.

Fafen-BA has an installed urea production capacity of 1,300 mt/d, with the ability to sell ammonia, carbon dioxide, and automotive liquid reducing agent (Arla 32). The Sergipe unit has an installed urea production capacity of 1,800 mt/d, and can sell ammonia, carbon dioxide, and ammonium sulfate.

Compass Updates 1Q Snow Data and Salt Sales

Earnings, News, Southern Plains

Compass Minerals, Overland Park, Kan., on April 12 reported below-average winter weather activity for the first quarter, with 11 cities in its North American highway deicing service reporting 100 snow events during the first quarter, roughly 8 percent below the 10-year average, but 18 percent above first-quarter 2020 results.

Compass said it sold approximately 4.6 million tons of highway deicing salt products in the first quarter of 2021, compared to 3.1 million tons in the prior-year period. This total includes all highway maintenance products sold in the U.S., Canada, and the U.K., as well as rock salt sold to the chemical industry. Sales of all salt products totaled roughly 5.0 million tons in the 2021 period, compared with 3.6 million tons in the first quarter of 2020.

“Despite below-average snow activity for the first quarter, we experienced solid demand from our U.S. highway deicing customer portfolio as a number of ice storms impacted our markets in addition to the snow event activity in the first quarter,” said Kevin S. Crutchfield, President and CEO. “We expect this healthy start to the year likely normalized customer inventories throughout North America, setting up a constructive backdrop for the upcoming bid season. Comparatively, this represents the highest first-quarter sales volumes for our highway deicing products since 2014.”

The company said it also achieved other milestones in recent weeks, including two announced definitive sale agreements to optimize its asset portfolio, and the successful negotiation of a new, five-year collective bargaining agreement at its Goderich mine. “Through these strategic actions, I believe we are building positive momentum as we head into the remainder of 2021,” Crutchfield said.

Grupa Azoty Profits Decline; Fertilizer/Ag Called Resilient

Earnings, News, Poland, Urea

Polish chemicals and fertilizer group Grupa Azoty SA, Tarnów, reported full-year 2020 net profit of Pln355 million (approximately $93.2 million at current exchange rates), 13 percent down on the year and in line with its preliminary estimate at the start of April (GM April 2, p. 27). Consolidated revenues were down 7 percent, to Pln10.5 billion, and also in line with the company’s preliminary estimate. Full-year EBITDA came in at Pln1.3 billion, also down 7 percent year-over-year.

Azoty said the pandemic outbreak during 2020 posed some “major challenges,” but its financial performance was supported by “sustained demand” in the group’s key business segment Fertilisers/Agro, its biggest business division, according to an April 15 company statement.

“The agricultural sector proved resilient to the headwinds, with increased sales volumes achieved,” said Azoty. “Fertilisers/Agro accounted for 60 percent of the group’s total revenue and 62 percent of the EBITDA margin of 12.6 percent in FY2020.”

Fertilisers/Agro generated full-year revenue of Pln6.36 billion, a 5 percent decline on the previous year’s Pln6.72 billion.

Azoty said it stepped up efforts during 2020 to roll out products compliant with the requirements of the European “Green Deal.” An example of this was “Pulurea+INur.,” a urea fertilizer treated with a urease inhibitor, which is the group’s response to the European Union’s National Emissions Reductions Commitments (NEC) Directive requirements to reduce ammonia emissions into the atmosphere.

The Polish group highlighted that although the use of urea with inhibitors will only become obligatory in Poland beginning Aug. 1, 2021, the product already has been available from the group for several months.

Azoty also operates Chemicals and Plastics business segments.

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