All Posts from April 2, 2007

SaskPool increases offer for Agricore; Cargill agrees to buy certain assets

Featured, News, Saskatchewan

Saskatchewan Wheat Pool Inc. (SaskPool) said late March 29 that it has sweetened the pot in its hostile takeover attempt of Agricore United (AU), increasing its offer to $8.00 in cash and 0.95 SaskPool common shares for each AU common share. SaskPool says its offer is now $4.00 more per limited voting share than the competing offer (GM Feb. 26, p. 14) by James Richardson International Ltd. (JRI), and that its total consideration is valued at $17.86 ($8.00 cash) per share versus JRI’s at $13.79 ($6.50 cash). SaskPool has launched a public market bought deal of subscription receipts totaling $275 million to help it fund its increased offer.

The new SaskPool offer expires on April 19 at 5:00 p.m. Toronto time.

AU said it is reviewing the new SaskPool offer and will respond in due course. It advised shareholders to take no action in the meantime.

In addition to the increased offer, SaskPool has lined up Cargill Inc. to buy certain assets, including crop input outlets, should the SaskPool/AU deal go through. SaskPool has entered into a consent agreement with the Canadian Competition Bureau in which SaskPool would shed these assets so as to accommodate a merger of SaskPool and AU. SaskPool says the move will boost its synergies with AU to $80 million from a previously reported $60 million. AU complained earlier that SaskPool had not backed up its claims of $60 million in synergies.

Assets to be sold to Cargill include five crop input/grain handling facilities in Western Canada, including those in Davidson, Kindersley, and Congress, Sask.; Camrose, Alberta; and Elva, Manitoba. Grain handling facilities would also be sold in Vermilion, Blackie, Viking, and Equity, Alberta.

In addition, SaskPool would sell a 100 percent-owned terminal located on the North Shore of the port of Vancouver to Cargill, and Cargill would sell its 50 percent interest in the Vancouver Cascadia Terminal to SaskPool.

Helena warehouse a total loss; company sees no disruption in service

Featured, News

A Helena Chemical Co. crop input warehouse in Humboldt, Tenn., was a total loss last week after lightning struck the building and caused a fire on March 28. Fortunately, no one was inside when the fire started in the fertilizer and seed warehouse at approximately 6 a.m. Fire crews were still at the scene late last week dealing with smoke. There were no injuries; however, as the fire progressed the smoke became so heavy that three manufacturing companies at the center were evacuated, along with homes located downwind.

In all, about 700 persons were involved, but they were allowed to return later in the day. Spokesman Jim Arnold remarked from the Helena headquarters at Collierville, Tenn., that the building was “pretty well engaged” when the firefighters from Humboldt and neighboring communities reached the scene. As is standard practice in these cases, firefighters withheld water and let the blaze burn because of a combination of chemicals housed inside the building. A day later the company declared the approximately 10,000-square-foot building and its contents a total loss. Arnold, manager of advertising and promotions for Helena, said the facility manufactures no products but is used to store agricultural chemicals for delivery to customers, and that company salesman work out of the location. He said there were probably more seed products on hand than fertilizer, but didn’t know what other chemicals may have been there.

Helena said professional emergency response and environmental contractors were dispatched to the scene to assist the local fire department and emergency officials. These teams began taking air samples for toxins and are sharing results with U.S. EPA and the Tennessee Dept. of Environmental Conservation. Helena reported that no problems had been detected from over 16,000 air samples taken in the first 24 hours. Sampling was also conducted inside factories adjacent to the warehouse, and other outside monitoring will continue. In addition, contractors and heavy equipment were called in to assist in the cleanup of burned material and building debris.

With the loss at Humboldt, reported Ed Brister, director of safety, health and engineering, customers in this region will be served from several surrounding locations, such as Jackson, Alamo, Atoka, and Sharon, and “should not see any interruptions.”

Corn crop projected to be up 15 percent

News Briefs

Washington-Corn acreage should be 90.45 million acres in 2007, according to the USDA’s Prospective Plantings Report issued March 30. This is up 15 percent from the 2006 crop and also up from earlier projections of around 87 million acres. If it proves to be correct, 2007 plantings would be the largest since 1944. Illinois, North Dakota, and Minnesota farmers all expected to record high acreage in 2007. The added corn acres would come from other crops ?Çô soybeans, cotton, and rice. Soybean acreage is expected to be off 11 percent from 2006 to 67.1 million acres, while cotton numbers are down 20 percent to 12.1 million acres. Winter wheat acreage is expected to be up 1 percent to 44.5 million acres, with Durum wheat up 6 percent to 1.99 million acres. Other spring wheat would be off 7 percent to 13.8 million acres. Speakers at the Green Markets Audio Conference in February discussed the possibility that corn acreage could top the 90 million acre mark. An audio recording of the conference is available on CD-ROM for $199, and can be ordered by visiting http://www.pf.com/eventDetail.asp?id=43&type=2. Audio recordings of past Green Markets audio conferences can also be ordered at http://www.pf.com/events.asp.

PotashCorp to bring back idled capacity

News Briefs

Saskatoon-Potash Corp. of Saskatchewan Inc. (PotashCorp) said March 23 that it will, pending regulatory approvals, bring back 360,000 mt of previously idled potash capacity at its Patience Lake, Sask., solution mine. This facility is forecast to produce 240,000 mt in 2007. Approximately US$92 million will be invested in the construction of approximately 20 additional injection wells and the pumping and piping systems to serve them. Only minor mill modifications will be necessary to handle the additional production, and the project is estimated to take 18 months to complete. The Patience Lake project is the next step in PotashCorp’s overall plan to increase production capacity from an available capability of 10.0 million mt in 2006 to 13.5 million mt by the end of 2010. Along with this reinstatement of Patience Lake capacity, debottlenecking projects at Allan and Lanigan announced in April 2005 will raise capacity by 400,000 and 1.5 million mt, respectively. The Allan project, which includes 500,000 mt of new compaction capacity, will be operational by April 1, 2007, while the Lanigan increase is expected to be completed in the second quarter of 2008. Debottlenecking and expansion plans for the Cory and New Brunswick facilities are being finalized and will be reviewed by PotashCorp’s board of directors in the near future. Additional expansion projects in Saskatchewan are also being considered. Combined, these projects could raise total production capability to 15.7 million mt by 2015. Further detailed announcements will be made as plans are finalized.

Phosphate vessel avoids collision

News Briefs, Phosphate

St. Petersburg, Fla.-A reoccurrence of the 1980 tragedy that killed 35 people in the nation’s worst bridge accident was avoided March 28 when a harbor pilot was able to maneuver a disabled freighter hauling 10,000 mt of phosphate away from the main span of the Sunshine Skyway Bridge. According to local media reports, the pilot, Tobias Rose, said the steering on the vessel, Antilles II, malfunctioned about 2,000 yards from the bridge, but he was able to maneuver to a sandbar off the shipping channel and run aground before reaching the bridge. In the 1980 collision, the southbound main span was struck during heavy weather, sending 35 people plunging to their deaths. A phosphate source said the boat was carrying MAP to Latin America and had been loaded at the Eastern Terminal. The bridge was closed to vehicular traffic for about two hours early Wednesday morning, and a group of tug boats pulled the freighter off the sandbar and took it to the Port of Manatee for repairs and inspection.

Fertilizer helps ConAgra unit achieve record profit

News Briefs

Omaha-Stronger results from its fertilizer operations helped ConAgra Foods Inc.’s Trade and Merchandising (T&M) segment achieve record operating profits during the third quarter ending Feb. 25, 2007. T&M profits reached a record $62 million, up 3 percent from year-ago levels. T&M sales were up 5 percent at $293 million. Company-wide, ConAgra saw an increase in net income and sales despite the recall of 100 percent of its peanut butter products following reports of Salmonella contamination. ConAgra estimates the recall will cost between $50-$60 million, with some $48 million of this recognized in the third quarter. Third-quarter ConAgra-wide net income was $192.6 million on sales of $2.92 billion, versus the year-ago loss of $25.2 million on sales of $2.86 billion. Nine-month net income was $572.6 million on sales of $8.7 billion, up from the year-ago $474.6 million and $8.54 billion, respectively.

ICL declares $373.9 M dividend

News Briefs

Tel Aviv-Israel Chemicals Ltd. declared an annual dividend of $373.9 million, its largest in history, and it just happens to be the entire amount of its net income for the year ending Dec. 31, 2006. Ninety million of the amount was paid Sept. 16, 2006, with the remainder, or $283.9 million, to be paid on April 25, 2007. Net income for the year, at $373.9 million, was actually off from 2005’s $422.2 million. Sales for 2006 were up 9 percent, to $3.26 billion from the year-ago $2.99 billion, despite a decline in potash sales due to delayed negotiations with major customers. The Astaris acquisition in late 2005 helped boost 2006 sales. Fourth-quarter net income and sales were above the year-ago period, with net income at $90.2 million on sales of $839.6 million, versus the year-ago $82 million and $775 million, respectively. As a result of the delayed potash negotiations, ICL Fertilizers saw a decrease in operating income to $263.3 million on sales of $1.45 billion for the year, versus the year-ago $348.1 million and $1.57 billion, respectively. The fourth quarter saw a rebound as operating earnings were $102.1 million on sales of $421.9 million, versus the year-ago $71 million and $366.3 million, respectively.

Income off, sales up at Innophos

News Briefs

Cranbury, N.J.-Specialty phosphate producer Innophos Holdings Inc., a spin-off from Rhodia Inc., saw reduced income due to some $24.6 million in IPO and debt reduction expenses in 2006. The company had a net loss of $32.8 million on sales of $541.8 million for the year ending Dec. 31, 2006, versus the year-ago loss of $11.7 million and $535.5 million. Operating income was $30.9 million in 2006, versus 2005’s $41.3 million. There was a fourth-quarter net loss of $24.7 million on sales of $131.6 million, versus the year-ago loss of $5.2 million and $129.4 million, respectively, as well as an operating loss of $3.9 million versus year-ago operating income of $10.1 million.

TFI praises action on AN security bill

Ammonium Nitrate, News Briefs

Washington-The Fertilizer Institute last week praised Rep. Bennie Thompson (D-Miss.), chairman of the House Homeland Security Committee, and members of the House Homeland Security Subcommittee on Emerging Threats, Cybersecurity and Science and Technology for approving the “Secure Handling of Ammonium Nitrate Act of 2007” (H.R. 1680). The bill was approved by voice vote and is scheduled for full committee markup after the April congressional district work session. The bill would require the Department of Homeland Security (DHS) to create a regulatory system to help keep ammonium nitrate out of the hands of those with criminal intent. It would also require all producers, sellers, and purchasers who take custody to register with DHS. In addition, the bill would require producers and sellers to maintain records of all ammonium nitrate sales for three years, including the name, address, phone number, and registration number of the person to whom the product was sold, as well as the date and quantity of the sale. The bill, which does not preempt state law, requires all thefts or unexplained losses to be reported to federal law enforcement within 24 hours.

ARA opposes changes in appropriations bill

News Briefs

Washington, D.C.-The House and Senate Appropriations Committees have approved competing versions of the fiscal year 2007 emergency supplemental appropriations bill. According to the Agricultural Retailers Association, $4 billion of the $120 billion appropriations total is for emergency agricultural disaster assistance for farmers and ranchers; the bills also include changes to the U.S. Department of Homeland Security’s proposed chemical facility security regulations that ARA opposes and considers disruptive. ARA said changes to the House bill would allow “government disapproval and shutdown of a facility based on non-security prescriptive measures, such as environmentally-driven operational changes, instead of a risk-based performance standard of overall site security.” ARA also criticized the House bill for withdrawing protections for sensitive chemical security information by exposing vulnerability information gleaned from submitted documents; for striking a ban on “obstructionist third-party lawsuits;” and for allowing states and local governments “sovereignty over the U.S. government on the protection of chemical plants from terrorism and other acts of war.” ARA cautioned that “if the House and Senate chemical security provisions are allowed to remain in any final supplemental funding bill, the U.S. agricultural industry will be open to even more frivolous lawsuits from anti-chemical activist groups.” ARA noted the President Bush has threatened to veto the bill due to the inclusion of a timetable to withdraw U.S. troops from Iraq over the next 18 months, as well as excessive spending.

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