All Posts from May 21, 2012

Norwegian authorities charge two Yara execs

News, News Briefs, Northwestern Europe

Oslo — Yara International ASA said May 18 that the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (Økokrim) has
charged two members of the corporate executive management team, Head of Upstream Tor Holba and CFO and Head of Strategy Hallgeir Storvik. The charges are related
to issues within the scope of the on-going investigation of Yara, which commenced in 2011. “I am surprised by this development. However, Yara has had a close cooperation with Økokrim throughout the process, and will continue this also in this new phase. It is important for us to see this process through to its conclusion, and we will now await Økokrim’s further investigation,” said Jørgen Ole Haslestad, Yara president and CEO. Økokrim has been investigating two matters – one involving negotiations preceding Yara’s investment in Libya, and another relating to a proposed joint venture in India that was never realized.

Agrium hints at N expansion

Alberta, News, News Briefs

Calgary — Last week Agrium Inc. President and CEO Michael Wilson hinted that Agrium might be looking at some nitrogen brownfield and/or greenfield opportunities; however, the company said it could not further elaborate until the company’s June 13 Investor Day. Wilson said that after the IFA conference in Doha he would be heading to Central Europe to look at potential opportunities. In the meantime, Wilson said the company’s retail business is just now moving into Brazil, and that it is currently in Chile and Uruguay, in addition to Argentina. Wilson was speaking at the BMO Capital Markets Farm to Market Conference.

Province releases Viterra/Agrium study

News, News Briefs, Saskatchewan

Regina — While the Canadian national government will make the final decision on Glencore International’s acquisition of Viterra Inc., the Province of Saskatchewan has commissioned a study on the deal, which includes implications from Glencore’s eventual shedding of input assets to Agrium Inc. The study by Informa Economics is concerned over the vertical integration of Agrium having over 50 percent of the nitrogen production capacity in Canada, and also having after the acquisition the largest network of crop input retailers (42 percent) in Saskatchewan. The study said there is the potential this will harm competition, though it noted that Agrium currently runs its retail and wholesale businesses separately. If they were run in a coordinated effort, the study said the firm might have the ability to sustain price increases in some locations. Viterra’s share of Saskatchewan retailers is 37 percent. After the transaction, Agrium’s would be 42 percent. At the wholesale level, Agrium would own 53 percent and 49 percent of Canadian ammonia and urea production capacity, respectively. The study noted that the Competition Bureau has a criterion suggesting the need for more detailed investigation of a single company with a market share of over 35 percent. The study also noted that the Competition Bureau would view the potential operational efficiencies of Agrium’s large dealer network – 1,250 outlets on three continents – as a consideration that can mitigate concerns about possible negative impacts of the merger. It said Agrium has indicated that it plans to bring best practices from those to the Canadian network. Agrium CEO and President Michael Wilson told analysts last week that the study does not look negative in his view. He said while Agrium’s retail presence in the province would go up 10-15 percent, it is not material, adding that he believes Saskatchewan is looking into the net benefit to the province and is more focused on investment and jobs remaining in the province. “I don’t see a competitive issue,” said Wilson.

CVR Energy opts not to sell LP shares

News, News Briefs

Sugar Land, Texas — CVR Energy Inc. on May 14 informed CVR Partners LP that it has determined not to proceed with a public offering of the LP’s common units at this time. Accordingly, the LP has submitted a letter to the Securities and Exchange Commission requesting the withdrawal of the LP’s Registration Statement on Form S-1, File No. 333-179930, and all exhibits thereto. CVR Energy owns the LP’s general partner and approximately 70 percent of its common units representing limited partner interests. Prior to majority ownership by billionaire investor Carl Icahn, CVR Energy had planned to sell some of its LP shares and use the proceeds for a special dividend to CVR Energy shareholders. Currently, Icahn is seeking to further increase his 69 percent stake in CVR Energy, with a tender set to close May 18 at 11:59 p.m. EST (GM May 14, p. 14). In the meantime, a spokesman for CVR Energy and CVR Partners told Green Markets that the Coffeyville nitrogen plant may not be sold after all. A spokesman said while Icahn has said he would sell CVR Energy, and thereby its majority stake in CVR Partners, which owns Coffeyville Resources Nitrogen Fertilizers, that this is not the same as selling the nitrogen plant, which would be an entirely different process as it is a distinct subsidiary of CVR Partners. The spokesperson reiterated that Icahn has not stated that he actually plans to sell the nitrogen plant.

Fertilizer groups launch global initiative

News, News Briefs, Western

Paris — A coalition of the world’s leading fertilizer associations – the Brazilian industry association (Associação Nacional para Difusão de Adubos, or ANDA), Canadian Fertilizer Institute (CFI), Fertilizers Europe, International Fertilizer Industry Association (IFA), and The Fertilizer Institute (TFI) – has launched a new online campaign called “Roots for Growth,” highlighting the important role that fertilizers play in addressing global food security responsibly, efficiently, and sustainably. This is as the Group of Eight (G8) leaders prepare to meet in Camp David May 18-19. The topics of agriculture and nutrition security are expected to feature high on their agenda. Back in 2009, G8 leaders pledged to spend US$22 billion on agriculture and rural development at the L’Aquila G8 summit. With funding due to expire this year, the global groups say there is an urgent need for leaders to agree on a new and improved commitment. The campaign includes an array of new online materials, aimed at informing policy debates and encouraging dialogue. These include: introductory video; interactive infographics on food/nutrition security, soil health, environmental stewardship, and sustainable agriculture; and links to key industry news, external policy papers, multimedia, and key industry spokespeople. “Moving forwards, the fertilizer industry wants to partner even more with farmers, environmental leaders, agronomists, scientists, and governments to share knowledge, develop further innovations and improve farmers’ access to markets, both locally and globally,” said Luc Maene, IFA director general.

Acron seeks majority stake in Azoty Tarnow

News, News Briefs, Russia

Moscow — The Acron Group announced on May 16 a tender offer to purchase up to 66 percent of the shares of Polish company Zaklady Azotowe w Tarnowie-Moscicach S.A. Investors may tender between June 6-22. The offered price is PLN 36 per share, representing a premium of 18.3 percent over Azoty Tarnow’s six-month average market price and 12. 1 percent over the May 15 close. Acron is a mineral fertilizer and ammonia producer and has a diversified portfolio, including some 40 chemicals. Azoty Tarnow has several chemical groups, including nitrogen, multi-component and mineral fertilizers, plastics, and OXO alcohol. In 2011, the company generated PLN 5.3 billion in revenue, with PLN 770 million in EBITDA and PLN 499 million in net earnings. Poland’s State Treasury is its largest shareholder, with 32.05 percent.

Israeli group touts Angola phosphate project

Israel, News, News Briefs

Herzliya, Israel — Israel’s privately owned LR Group is looking to invest $1 billion in a phosphate mine and fertilizer project in Angola. LR said the investment is through its wholly-owned Angolan subsidiary, Vale Fertil Lda. LR officials said the twostage plan calls for developing deposits in Zaire province in northern Angola, approximately 30 kilometers from the town of Nzeto and 300 kilometers north of the capital Luanda. Ehud Levy, project manager, said that 115 million mt of reserves have already been discovered in the 408 square kilometer concession area, and LR hopes to reach the 150 million mt level in ongoing testing. The first stage of the development plan calls for investing $60-$70 million in a plan for upgrading 300,000 mt/y of phosphate and the production of about 500,000 mt/y of NPK fertilizers for the domestic market. Levy said this is the first-ever fertilizer project in Angola. While the target is for production to begin in mid-2014, LR hopes to advance the timetable. The second – and far more ambitious – stage involves a $950 million investment in a 400,000 mt/y phosphoric acid plant, to be used to produce 850,000 mt/y of DAP. Levy said the DAP production will be earmarked for export and targeted for the Latin American market, specifically Brazil and Argentina. The investment includes $300 million in a port facility at Mucula for importing sulfur and possibly ammonia for use in the production process. The timetable calls for production to commence in 2017. Levy cites a number of advantages of the project, including the proximity to the market, low mining and production costs, and easy accessibility to local natural gas for the second stage of the project. “We are studying the financing model and are also considering strategic investors for the project,” said Yuval Omer, Vale Fertil’s director for the phosphate project. Vale Fertil was established by LR in 1991, and has substantial investments in Angola’s construction, telecommunications, and natural resources sectors.

LOL input results better-than-expected

Midwest, News, News Briefs

Arden Hills, Minn. — Land O’Lakes Inc. (LOL) said Crop Input results were better than expected for the first quarter due to an early spring and stronger demand. However, overall performance for the company was called “solid, but mixed.” First-quarter net earnings were off 16 percent, to $85 million from the year-ago $101 million, but sales were up 12 percent, to $3.9 billion from $3.5 billion. LOL said the $85 million earnings represented the second-best first quarter for the company. Earnings were up for Crop Inputs and Feed, but off for Dairy Foods and Layers/Eggs. Net sales were up in all business units.

CP Rail under new management in hostile takeover

Alberta, News, News Briefs

Calgary — Canadian Pacific (CP) Railway’s CEO, Fred Green, was replaced on May 17 in a hostile takeover led by activist investor William Ackman of Pershing Square Capital Management LP, which had become CP’s largest investor. As a result of Ackman’s victory in the proxy fight, six other members of CP’s board of directors will not stand for re-election, including the chairman of the board, John Cleghorn, allowing a slate of seven new directors proposed by Ackman to join the railroad’s 16-member board. Following the proxy fight, the new board named Stephen Tobias, the former operating chief of Norfolk Southern Corp., as interim CEO. First on the agenda for CP’s new management will be selecting a permanent CEO, and a top contender is reportedly Hunter Harrison, the 67-year-old former CEO of rival Canadian National Railway Co (CNR). Harrison has said he can improve CP’s returns and cut operating expenses to 65 percent of sales by 2015. CP has a low operating ratio and has lagged behind CNR and its peers on profitability measures since Green became CEO in 2006. Another concern is the looming strike by the Teamsters Canada Rail Conference, which represents 5,000 conductors, trainmen, yardmen, locomotive engineers, and rail traffic controllers. CP has been in contract negotiations with the union since early October, and a strike is planned if terms are not reached by May 22.

Yara eyes DEF, TAN for Belle Plaine

News, News Briefs, Northwestern Europe

Oslo — Yara International ASA recently told analysts that it is considering significant DEF (diesel exhaust fluid) and TAN (technical grade ammonium nitrate) capacity at a new Belle Plaine, Sask., nitrogen plant. Yara acknowledges such expansions would be more expensive; however, sources note growing DEF and explosives markets in North America, though the latter suffered in the U.S. this past quarter due to a mild winter and lower coal demand. Yara told Green Markets back in February that the new world-class expansion could mean an additional 1.3 million mt/y of urea and 800,000 mt/y of ammonia (GM Feb. 13, p. 1). Yara hopes to make a decision on its Belle Plaine expansion this summer. The existing Yara Belle Plaine nitrogen plant expects to take a one-month turnaround this summer, beginning in late June. Current, capacity at the site is 1 million mt/y urea, 700,000 mt/y ammonia, and 200,000 mt/y UAN. Agrium President and CEO Michael Wilson told analysts that he is not worried about new capacity from Yara. “The impact would be there’s more supply, but it would replace from our perspective imports into the U.S. from outside of Canada. And Yara hasn’t built the plant yet. It is quite expensive to build facilities in Saskatchewan and Alberta.”

Disclaimer of Warranty
All information has been obtained by Green Markets from sources believed to be reliable. However, because of the possibility of human or mechanical error by our sources, Green Markets or others, Green Markets does not guarantee the accuracy, adequacy, or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.

For additional details visit our Terms of Use.