Hamilton, Ont. — National Steel Car Ltd. has signed a contract with Potash Corp. of Saskatchewan Inc. (PotashCorp) to produce an additional 1,000 custom-built potash railcars for delivery in 2012/13. The custom-built railcars are 13 feet shorter than traditional grain cars and are specifically designed to accommodate the weight and density of potash. This new contract with PotashCorp follows an original order in 2010, also for 1,000 of the potash cars. National Steel Car has also produced more than 5,000 similar rail cars for Canpotex Ltd., the overseas marketing organization that represents Saskatchewan’s three potash producers.
Norfolk, Neb. — Helena Chemical Co. may not be giving up entirely on building a new fertilizer plant – which could cost as much as $5 million – in Madison County. Helena
officials have decided against locating southwest of Norfolk because of opposition from nearby property owners who do not want an industry operating close to their properties. Madison County currently has setbacks required for such development, but plans to hire a consultant to look over the entire situation. According to Planning and Zoning Administrator John Johnson, “What Helena told me is they wanted to locate in Madison County, but at this time decided they were no longer interested in the location and they wanted to be good neighbors, but are continuing to look at other sites in Madison County.” Johnson conceded that despite being in a rural area, the site really was unsuitable because there are a couple of subdivisions close by that generated the opposition. Three hearings were conducted regarding changing the setbacks – two by the commission and one by the county board. All three hearings had 90 or more residents attending, with most of them opposed.
Madison, Miss. — Phosphate Holdings Inc. (PHI), the owner of Mississippi Phosphates Corp., reported net income of $857,000 ($0.10 per diluted and basic share) on sales of $78.5 million for the second quarter ending June 30, 2012, up from a year-ago loss of $1.76 million ($0.21 per share) on sales of $80.4 million. Operating income was also up, at $2 million from the year ago loss of $2.6 million. Sales were off 2.4 percent. Although the average sales price for DAP was down 11 percent, to $482.42/st from the year-ago $542.54/st, sales volumes were up at 161,045 st, which include exports of 106,364 st and 54,681 st going into the domestic market. Year-ago sales volumes were 146,213 st. PHI reported a six-month loss of $201,000 ($0.02 per share) on sales of $171.1 million, compared to a year-ago loss of $1.75 million ($0.21 per share) on sales of $158 million. As of June 30, 2012, PHI had a cash balance of approximately $1.2 million and borrowings under its credit agreement of $14.8 million. During the second quarter, it expended $1.9 million on capital expenditures. PHI said it continues to aggressively manage its liquidity internally in the absence of an external committed source of additional liquidity. Assuming no further substantial interruptions to normal operations, it believes the operating results should be adequate to meet PHI’s operating and capital needs during 2012 without the need for additional liquidity facilities or arrangements.
Los Angeles — If earlier droughts are any lesson, the one this year should keep both corn and nitrogen prices up, Rentech Inc. President and CEO D. Hunt Ramsbottom told analysts Aug. 10. “After the last three drought years of 1983, 1988, and 1991, it took two full years of corn crops to return to normalized inventory levels. Based on these historical precedents, many believe it’ll take multiple years to bring ending corn stocks back above the billion bushel mark. So corn prices should be strong, while stocks are below normal levels.” He said nitrogen usage and prices have historically increased following a drought due to the expectation of higher plantings to replenish stocks in response to higher corn prices. “These pricing patterns held true as ammonia and UAN prices marched steadily higher as the drought progressively impacted the corn crop over the last few months. We’ve seen prepaid sales for fall deliveries of ammonia rise from $600/st in early May to posted prices of $770/st today, while UAN prices increased from $290/st in late June to posted prices of $370/st today.” Ramsbottom added that Rentech Partners LP has begun selling ammonia for spring 2013 delivery at prices that exceed the average ammonia price of $730/st achieved during the spring of 2012. He noted that while low water levels on the Mississippi River may be affecting competitors, it is not impacting Rentech’s East Dubuque, Ill., plant, as its customers typically pick up their product at the plant by truck. Net income for Rentech Partners soared to $41.2 million, versus the year-ago $13.7 million (GM Aug. 13, p. 11).
Marysville, Ohio — The Scotts Miracle-Gro Co. said Aug. 10 that it expects to have an adjusted loss per share close to $0.60 for the fourth quarter ending Sept. 30, 2012. This compares to a year-ago net loss of $53.4 million ($0.86 per diluted share) on sales of $417.2 million. For the year, Scotts expects an adjusted EPS in the plus column at $2.00. In fiscal 2011, Scotts had income of $167.9 million ($2.54 per share) on sales of $2.83 billion. Scotts told analysts that commodity costs were a negative for the company so far this year, and that the company has been busy the past few weeks locking those in for 2013, particularly for urea and diesel. Scotts said it is moderating its expectations in 2013 due to the general economy and is planning for flat volumes and higher prices. The company did not increase prices in 2012 but plans to do so in 2013, probably in the low single digits. Scotts said that while it gained market share in most categories in 2012, including against private labels and major competitors, the company plans to cut costs in 2013, including advertising. “We concluded that the cost of chasing that growth is just too high right now and is the wrong solution for shareholders in the near term,” Chairman and CEO James Hagedorn told analysts. He said second-half Miracle Gro sales were hit pretty hard, and acknowledged that in a weak economy Scotts products are discretionary. “What we think the data is telling us is that if people are stressed, they’ll just step out of the market for a year and they won’t do anything.” Heat was cited as another factor impacting lawn and garden consumers. He said the good news is the company did not see a shift to private label. Hagedorn did say the company was able to change the trajectory for lawn fertilizer with it remaining flat year-over-year, as opposed to the million-unit losses per year it had been dealing with. He believes consumers will accept a price increase, adding that competitors increased prices this year, while Scotts did not. He expects Scotts’ pricing increase may be slightly above that of competitors. Hagedorn said Scotts is looking at money losing and marginal items to cut from its portfolio.
Walnut Creek, Calif. — After being stressed by delayed orders in the second quarter (GM May 14, p. 13), Central Garden & Pet reported better results for the third quarter ending June 23, 2012. Net income attributable to the company increased 33 percent to $22.7 million ($0.47 per diluted share) on sales of $533.8 million, compared to the year-ago $17.1 million ($0.31 per share) on sales of $484.3 million. While the Garden segment only saw sales growth of 2 percent compared to 19 percent for the Pet segment, Garden operating income was up 26 percent, to $22.6 million from the year-ago $18 million. Garden sales were up $5.5 million to $262.5 million, mainly due to stronger chemical and control sales, both up double digits. Commodity costs continue to be a problem, and the company did pass on price increases to customers this year. Having already gained significant market share in grass seed, President Gus Halas told analysts that in a down market it continued to grow market share, even when faced with an advertising blitz from a major competitor. He said the company also gained share in its controls business. Company-wide, nine-month results were still behind at $31.2 million ($0.65 per share) on sales of $1.3 billion, versus the year-ago $39.2 million ($0.68 per share) on sales of $1.25 billion. In the meantime the company continues to streamline, expecting to close eight locations this year out of 66. So far this year it has reduced employees from 4,300 to 3,800.
Kassel — A 30.5 percent increase in Potash/Magnesium operating income helped K+S Group offset a loss from its Salt unit during the second quarter ending June 30, 2012. Potash/Mag income was €240.7 million on revenues of €669.5 million, up from the year-ago €184.4 million on sales of €502.4 million. K+S cited strong overseas business, particularly to Brazil, and good early stocking-up in Europe toward the end of the reporting period. K+S said after North American and Russian production cuts, global capacities were almost completely utilized during the second quarter. In addition, it said international potash prices tended to be firmer in the second quarter, above year-ago levels. K+S said that the basic reaction after a drought is that fertilizer applications are increased. Like others, it is saying it may take two or three seasons to get stocks-to-use ratios back in good order. K+S expects positive Potash/Mag results to continue in coming months, with the company being able to mitigate a weather-related decline in its Salt segment. Salt income was a negative €11.4 million, versus a year-ago positive €11 million. Company-wide operating earnings were up 20.8 percent, to €219.8 million on sales of €996.5 million, versus the year-ago €181.9 million and €821.7 million, respectively. EBITDA was up 16.4 percent, to €275.8 million from the year-ago E237 million. Six-month Potash/Mag income was up 16.1 percent to €449.2 million on sales of €1.25 billion, compared to the year-ago €386.8 million on sales of E1.08 billion. Salt income was off 77.3 percent to €34.1 million, versus the year-ago €150.1 million. Company-wide, six month operating income was off 9.3 percent, to €468.6 million on sales of €2.08 billion from the year-ago €516.6 million and $2.12 billion, respectively. EBITDA was off 7.6 percent, to €580 million from the year-ago €627.6 million. Going forward, K+S expects Potash/Mag sales volumes of 6.9 million mt for 2012, in line with 2011. It expects operating income of €820-€900 million versus 2011’s €906.2 million; revenues of €3.9-€4.2 billion versus 2011’s €4 billion; and adjusted earnings per share from continuing operations of €2.85-€3.15, versus 2011’s €3.77.
Tel Aviv — ICL Fertilizer operating income was up 8 percent, to $409.9 million on sales of $1.19 billion for the second quarter ending June 30, 2012, up from the year-ago $379 million on sales of $1.1 billion. The company, a segment of Israel Chemicals Ltd. (ICL), sold 1.5 million mt of potash, up 12 percent compared to the year-ago quarter and 65 percent from the first quarter. This is the third-highest quantity sold in a quarter in company history. ICL Fertilizers said it reflects the accelerated pace of deliveries made to China, as well as strong sales to Brazil. The company sold 511,000 mt of phosphates, up 17 percent from the year-ago and 55 percent from first quarter 2012. ICL Chemicals had net income to shareholders of $407.3 million on sales of $1.96 billion, down from the year-ago $426.2 million on sales of $1.93 billion. The company cited higher finance expenses and taxes. Operating income was up slightly, to $545.1 million from $542.8 million. EBITDA was off slightly, to $610.6 million from $611 million. ICL Chemicals declared a dividend totaling $285 million, to be paid Sept. 12 with respect to second-quarter results. Six-month ICL Fertilizer income was $652 million on sales of $2.04 billion, up from the year-ago $622.5 million on sales of $1.94 billion. ICL Chemicals-wide net income was $696.2 million on sales of $3.52 billion, down from $705.9 million on sales of $3.46 billion. Operating income was $696.2 million, up from $705.9 million. EBITDA was up slightly, at $1.033 billion from $1.029 billion.
Seoul — Samsung Engineering Co. Ltd. said Aug. 14 that it had received a notification of award for a US$843 million nitrogen fertilizer plant from Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), Bolivia’s state-owned oil company. This marks Samsung Engineering’s first entry into Latin America. The plant will be built in the state of Cochabamba, Bolivia, in the city of Entre Rios. The plant is slated to produce 2,100 mt/d of urea after processing natural gas to ammonia and urea. Samsung said it is hoped that the local use of the urea will increase Bolivia’s cultivation area from 2.5 million hectares to 105 million hectares. Samsung is responsible for the FEED, engineering, procurement, construction, and pre-commissioning on a lump-sum turnkey basis, with completion set for 2015. In addition, operation and maintenance support will continue for two years after completion.
Toronto — Stonegate Agricom Ltd. has revised its mineral resource estimates significantly upward for the upper and lower zones at its Paris Hills Phosphate Project in Southeast Idaho, between the tiny communities of Bloomington and Paris. The upper zone’s resources are now estimated at 60.3 million mt, with an average grade of 22.7 percent phosphorus pentoxide (P205). After six more holes were drilled, the company raised its estimate in the lower zone by 33.6 percent, to 29.8 million mt from 22.3 million mt, with the P205 average remaining at 30.1 percent. Thirty-nine exploration holes were drilled there. President and Chief Executive Officer Steve Appleton said the latest estimates marked another milestone in the company’s development of its high-grade Idaho phosphate deposit. Definition drilling the past two years has been completed, but future exploration drilling is also possible, he said. Stonegate will now focus on completing the lower zone’s banking feasibility study by the end of 2012, and on environmental permitting for a planned underground mine. The lower zone’s high grade phosphate could be shipped directly without incurring capital or operating costs that come with processing it. The rock would position Stonegate as a supplier to North American fertilizer producers and West Coast ports for export to Asian fertilizer producers. All mineral resource estimates were completed by Agapito Associates Inc. of Grand Junction, Colo., which estimated the mine would produce 10 million mt of direct ship phosphate ore and have a life of 14 years. Slightly more than $134 million would be needed to develop the mine. Cash operating cost would be about $73/mt, with product cost assumed at $160/mt. It is anticipated the mining project will create 200 construction jobs and 300 permanent jobs.
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