All Posts from January 22, 2021

Verdesian Reports Purchase Agreement

Featured, News, Specialty

Specialty crop input producer Verdesian Life Sciences, Cary, N.C., said on Jan. 19 it has entered into a definitive stock purchase agreement with funds managed by AEA Investors LP, New York City. Verdesian’s management team, including President and CEO Kenny Avery, will continue to lead the company following the close of the transaction.

Terms were not announced. Private equity firm Paine Schwartz Partners, New York City, which formed Verdesian in 2012, was reported in negotiations to sell its stake in Verdesian this past November (GM Nov. 13, 2020). At the time, Verdesian was valued at over $500 million.

“AEA is the right partner to help us continue scaling Verdesian and doing what we do better than anyone else: offering Nutrient Use Efficiency technologies for growers all over the world,” said Avery. “With AEA, we are gaining a global partner who recognizes the potential of our products and will support our growth, both organically and through strategic investments, in North America and around the world.

“We are proud of what we have accomplished since our founding and have had a very successful partnership with Paine Schwartz,” he continued. “Looking ahead, we are excited to work with AEA as we continue to provide critical products to farmers that increase their productivity, profitability, and ability to do so sustainably.”

“We believe Verdesian’s leading product suite, R&D capabilities, entrepreneurial and customer-focused culture, and industry leading management team truly differentiate the Company from its peers and create a strong platform from which to grow and expand,” said Rahul Goyal, Partner, AEA.

“The company has considerable opportunities ahead as the need for greater productivity and more sustainable farming practices drives global demand for Verdesian’s Nutrient Use Efficiency solutions. We look forward to partnering with Kenny and the entire Verdesian team to help the company take the next steps in building on its portfolio of plant health and nutrition products, both organically and through strategic acquisitions around the world,” Goyal added.

“Our success with Verdesian, from creating the platform to building it into an important market-leader, is another validation of our thesis driven approach to investing in agribusiness,” said Kevin Schwartz, Paine Schwartz CEO. “We identified plant health and nutrition as important aspects of the agribusiness value chain and as areas that align closely with our sustainability strategy in the sector.

“We were able to help Verdesian capture opportunities through key strategic acquisitions and substantial investments across the platform. AEA Investors will be a great partner for the company, and we are confident that Verdesian will continue to thrive and create enormous benefits for farmers and the environment in the years ahead,” Schwartz said.

Paine Schwartz formed Verdesian to invest in plant health and nutrition. Within the fertilizer space, over the years it acquired Northwest Agricultural Products LLC (GM March 8, 2013); INTX Microbial LLC, Specialty Fertilizer Products LLC (GM July 7, 2014); Biagro Western Sales Inc. (GM Sept. 17, 2012); QC Corp. (GM Oct. 6, 2014); and U.K.-based Plant Syence Ltd.

The company has expanded geographically into new markets, including South America, and has over 240 employees.

Verdesian manufactures seed treatments, inoculants, and fertilizer enhancers with facilities in Pasco, Wash., Kentland, Ind., Cape Girardeau, Mo., and North Lima, Ohio. It said its portfolio includes more than 300 patent proprietary technologies developed in partnership with global research institutions and universities.

Founded in 1968, AEA manages funds that have over $15 billion of invested and committed capital, including the leveraged buyouts of middle market companies and small business companies and mezzanine and senior debt investments. AEA invests across three sectors: value-added industrials, consumer, and services.

In the meantime, a lawsuit alleging fraud against Paine Schwartz and Verdesian’s Board of Managers continues in a Delaware court, where two minority equity holders – David Bergevin and MKE Holdings Ltd. – allege that the defendants over-inflated the value of Verdesian acquisition SFP, Leawood, Kan. (GM July 7, 2014), in order to get them to help fund the deal (GM Feb. 7, 2020).

Trammo, Proton Cooperate on Green NH3

Ammonia, Featured, France, News, Scandinavia

Trammo DMCC, Paris, a subsidiary of Trammo Inc., New York City, and Proton Ventures BV, Schiedam, the Netherlands, an engineering company specializing in ammonia technology, said on Jan. 18 they have signed a Memorandum of Understanding (MOU) for joint cooperation on green ammonia projects. Proton Ventures would construct green ammonia production units, storage facilities, and import and export terminals (NFuel Projects), and subsequently supply the green ammonia produced through wind and solar energy to Trammo.

Trammo, which has more than 55 years of ammonia marketing and logistics experience, would offtake and market the green ammonia and transport it to customers around the world using its fleet of specialized refrigerated vessels.

“We are pleased and proud to use Trammo’s long-standing transportation and distribution expertise to develop green ammonia projects,” said Christophe Savi, Head of Trammo’s Ammonia Division.

“Trammo strongly supports sustainable systems as well as environmentally friendly solutions, and intends to participate actively, together with its existing suppliers and other participants, in the industry’s green transition. We believe that this innovative partnership with Proton Ventures will create great synergies between our respective companies, allowing us collectively to service the global decarbonization process while adding new key logistics solutions for many of our partners in the marketplace,” Savi said.

“We are thrilled with this MOU with Trammo,” said Hans Vrijenhoef, CEO of Proton Ventures. “From a technical point of view, Proton Ventures will take the lead to organize, design, and execute NFuel Projects on behalf of our clients. We believe that the participation of Trammo as offtaker, with its extensive experience, reputation for reliability, and global marketing network, will ensure the required offtake agreements for the projects.”

In addition to its ammonia position, Trammo is active in sulfur, sulfuric acid, and petroleum coke. It is also a producer and marketer of nitric acid in the U.S.

Proton Ventures technologies and products include storage concepts for chemical and liquid energy carriers. It designs and builds pressurized ammonia storage facilities, small-scale ammonia production facilities “NFuel” units, and SCR processes.

Major Fertilizer Complex Proposed for Australia’s Northern Kimberly Region

Ammonia, Australia, DAP/MAP, Methanol, News, News Briefs, Phosphate Rock, Urea

Plans for a major Australian fertilizer project seemingly took a step forward this week with the inking of three memorandums of understanding connected with the development. A little known Australian consortium that is reported to have the in-principle backing of a large Dubai water and energy company, ARJ Holding Group, is proposing a A$4.1 billion project that would frack gas in Western Australia’s Canning Basin 150 kilometers southeast of Broome, according to a report by Australia’s Financial Review.

The project’s developer, Derby Fertilisers and Petrochemical Complex (DFPC), on Jan. 20 announced non-binding memorandums of understanding with Danish catalysis company Haldor Topsøe for the design, and with little known Australian firm Theia Energy for the gas supply, according to the report. DFPC is also reported to have signed a memorandum with China’s Shanghai Electric for the construction of a 100 MW solar farm.

According to its website, DFPC is proposing to develop ammonia, urea, methanol, and complex fertilizer plants and a power station near Derby, in the Kimberley region of Western Australia’s sparsely populated northern region. Proposed production capacities include 3,500 mt/d of ammonia, 5,000 mt/d of methanol, and 4,000 mt/d of urea under phase 1 plans. A second phase utilizing domestic supplies of phosphate rock is proposed for a plant with capacity to produce 350,000 mt/y of complex fertilizers and 375,000 mt/y of MAP/DAP.

The ambitious proposal would be dependent on a gas supplier that has not yet established certified reserves for the project, and which would have to overcome multiple environmental, heritage, and planning approvals to drill wells and process and pipe the gas over about 450,000 hectares of the Canning Basin, according to the report.

Theia Energy has a prospective resource of 3-5 billion barrels of oil equivalent in the 450,000 hectares covered by its exploration license, but the report, citing Theia’s COO Jop van Hattum, said the energy company would not be able to estimate certified reserves until the project received a final investment decision, due in about two years.

Australia’s Leigh Creek Urea Project Awards ISG Contracts

Ammonia, Australia, News, News Briefs, Urea

Adelaide-based Leigh Creek Energy (LCK), which plans a 1 million mt/y urea facility in South Australia, north of Adelaide, has awarded two engineering, procurement, construction, and management (EPCM) contracts for the Stage 1 commercial development of the US$2.6 billion project.

The Leigh Creek Energy project (LCEP), which is located 550 kilometers north of Adelaide and overlays the Leigh Creek coalfield, aims to initially produce 1 million mt/y of urea, utilizing in-situ gasification (ISG) technologies.

LCK said on Jan. 18 the Upstream contract has gone to InGauge Energy Pty., Brisbane, which has been hired to manage drilling services for development of initial gasification wells to provide feedstock syngas for a 5 MW power plant. The Downstream contract has been awarded to Brisbane-based Prudentia Process Consulting Pty Ltd. to manage selection, engineering, construction, and commissioning of the 5 MW gas-fired power plant.

These two commercial stages of the project will be developed in parallel. LCK said it will separately contract for long lead items that will then be managed by respective EPCM contractors.

The positive project economics for the development of the urea production facility supported by syngas feedstock were confirmed in LCK’s recently-released pre-feasibility study (PFS), the company said.

“The PFS outlined an average nominal production cost of US$109/mt, which places the LCEP project in the lowest cost quartile of the global urea cost curve,” said LCK. “Pre-tax leveraged Net Present Value (NPV) is A$3.4 billion, with an internal Rate of Return (IRR) of 30 percent.”

LCK expects first urea production in late 2023.

“With the award of these contracts, LCK moves closer to becoming a significant supplier of domestically-produced urea providing additional security to a critical product to the Australian agricultural sector,” said LCK’s Managing Director Phil Staveley.

Two other major urea projects are under development in the country. Strike Energy Ltd., also headquartered in a suburb of  Adelaide at Thebarton, earlier this month announced the launch of Project Haber, an ammonia and 1.4 million mt/y urea complex for Western Australia’s Narngulu Industrial Estate. The site lies adjacent to Geraldton Port (GM Jan. 15, p. 1).

Like the LCK project, Strike Energy said its Haber Project will be primarily focused on meeting the needs of Australian farmers, with surplus product to be made available to international markets.

Perth-based Perdaman Industries’ (Chemicals and Fertilisers) is also working to establish a 2.14 million mt/y urea project near Karratha on Western Australia’s Burrup Peninsula. A long-time-in-development project, Perdaman only signed an engineering, supply of equipment and materials, construction, pre-commissioning, and commissioning contract for the execution of the urea plant in December (GM Dec. 31, 2020). This followed the inking of a 20-year natural gas supply agreement with Woodside Energy for the project in November 2018 (GM Nov. 21, 2018),

This week also saw news of the announcement of the signings of memorandum of understandings – albeit non-binding – for a giant fertilizer complex in Western Australia’s  sparsely populated northern region, which would include ammonia and urea production, by a little known Australian consortium. The consortium is reported to have the in principle backing of a large Dubai water and energy company, ARJ Holding Group (see separate news story).

Belaruskali Seeks Cooperation with Yara, Ready to Re-Hire Dismissed Workers

Belarus, News, News Briefs, Potash, Scandinavia

Belarus-state-owned potash producer Belaruskali said it wants to continue its partnership with Norwegian group Yara International ASA and has confirmed it is ready to take back employees fired over their participation in political protests and strikes following the disputed presidential election on Aug. 9.

“Following a regular dialogue with Yara International, Belaruskali declares its readiness to cooperate on a long-term basis with Yara in the field of industrial safety, and is ready to accept Yara specialists on the ground to monitor production processes,” the Belarus producer said in a Jan. 20 statement on its website.

“We will continue cooperating with Yara to ensure the health, safety, and well-being of Belaruskali employees,” the company said.

“Belaruskali management has made the decision to remove disciplinary sanctions against employees who went on strike or who were involved in protests of the enterprise, and reinstate allowances and bonuses for workers who had been subject to disciplinary penalties. Previously dismissed employees can be re-employed by Belarusakali if they submit appropriate applications,” the potash producer said.

Belaruskali in November was reported to have dismissed 49 strikers, and had warned other employees that they would also face dismissal if they disregarded their work duties and participated in strikes (GM Nov. 27, 2020).

On Jan. 19, the Belarusian Supreme Court rejected an appeal by the potash producer’s strike committee against a ruling by the Minsk regional court in September that found the strike, started on Aug. 17,  was illegal (GM  Sept. 18, 2020).

Yara International ASA President and CEO Svein Tore Holsether in December said the continued suppression of human and workers’ rights in Belarus, as described in the recent report by the OSCE Rapporteur, was “unacceptable,” and that the current situation was “not tenable” for Yara (GM  Dec. 11, 2020). He also cited recent safety incidents at Belaruskali sites as “alarming.” Holsether, who visited Belaruskali in September to make his position clear, did not say whether Yara would sever business ties with the potash producer.

The Norwegian group in a statement on its website on Jan. 21 reiterated that “it has a strong commitment” to the universal human rights agenda, including the right to strike, and backs the UN High Commissioner for Human Rights in her “condemnation of human rights abuses in Belarus.”

As a long-term partner to one of Belarus’s biggest companies, Yara reminded that it has over the past months sought positive change through a close and regular dialogue with the management of BPC and Belaruskali, including physical visits to Belarus in September and December to make clear the importance Yara attaches to the ethical conduct of its business partners.

Yara said it continues to engage with a number of stakeholders inside and outside Belarus, including the leader of the Belarusian democratic opposition, Sviatlana Tsikhanovskaya, to evaluate how it can have the most positive impact.

Tikhanovskaya earlier this month had called on Yara to suspend its supply contracts with Belaruskali, and to support the potash workers on strike (GM Jan. 15, p. 37).

In its statement this week, Yara said its main concern remains the health, safety, and well-being of Belaruskali workers.

“Following a series of meetings between Yara and its Belarusian business partners over the past months, Belaruskali has announced steps to improve the situation for and relations with its workforce, including reintroducing allowance and bonus schemes for workers who had previously been subject to disciplinary penalties, and offering to re-employ terminated workers. The company also declared its readiness to cooperate with Yara on industrial health & safety improvements,” said Yara.

While the Norwegian group sees these steps as “positive,” it said it will continue to monitor the situation closely and expects Belaruskali to further improve the situation for its workforce, respect workers’ rights, enhance occupational health and safety, and refrain from repression of employees.

Belarus pro-democracy and a pro-human rights news site Charter 97 said on Jan. 21 Belaruskali management’s response was because they were “frightened about the termination of contracts with Yara.”

BHP Jansen 89 Percent Complete

Australia, News, News Briefs, Potash, Saskatchewan

BHP Ltd., Melbourne, said on Jan. 20 its current investment program to complete the shafts at the Jansen potash project in Saskatchewan was 89 percent complete, up from 86 percent in October (GM Oct. 23, 2020).

The group last October increased the budget to fund the completion of the shafts by US$272 million, raising the budget for the current scope of work to US$2.972 billion. The additional costs followed delays to the shafts’ completion as a result of initial challenges with placement of the shaft lining, since rectified, and impacts from the group’s COVID-19 response plan.

BHP last August revealed it had pushed back the final investment decision for Jansen Stage 1 to mid-calendar year 2021 from February 2021 (GM Aug. 21, 2020). Jansen Stage 1 currently is designed to provide between 4.3 million and 4.5 million mt/y of potassium chloride production capacity on completion.

Nigeria’s Notore Chemical Starts Turnaround Maintenance

Africa, News, News Briefs, NPK, Specialty, Urea

Nigeria’s Notore Chemical Industries Plc shut down its urea plant in Onne near Port Harcourt on Jan. 15 ahead of a turnaround maintenance program (TAM), the company said in a Jan. 15 corporate disclosure.

The turnaround is aimed at restoring the plant to its nameplate capacity of 500,000 mt/y of granular product, improve its reliability, and sustain a daily output of 1,500 mt, according to a report by This Day Nigeria, citing Notore’s company Secretary Otivbo Saleh.  Early work began last year, and the turnaround is expected to be completed on March 8.

The most recent urea production figure provided by the company indicated output reached 80,777 mt in the fourth quarter of 2019, suggesting a capacity utilization of around 65 percent.

In a separate development, Notore commissioned a new 2,000 mt/d NPK blending plant in March 2020. The company said in late November its production of NPK fertilizers had begun “to ramp up gradually,” with some local market introduction achieved in its fiscal fourth quarter ended Sept. 30. It reported that Nigerian fertilizer demand remains robust and it anticipates “significant increases” in its NPK production output and sales in FY2021.

EuroChem, SUEK Set Up Transport Firm

News, News Briefs, Russia

EuroChem Group AG and Russia’s Siberian Coal Energy Co. (SUEK) have set up a joint transport company and are putting more than 50,000 cargo railcars and six Russian seaports under its control, according to a Prime Business report this week, citing a SUEK representative.

The new company, named National Transport Co, was established at end of 2020 to further develop the two owners’ transport business.

National Transport Co. is set to become one of Russian Railways’ largest clients, with a 115 million mt/y cargo base, according to the report.

EuroChem Group’s owner, Russian businessman Andrey Melnichenko, is also SUEK’s principal owner.

Scottish Company Gets Planning Nod for Green NH3 Plant

Ammonia, News, News Briefs, United Kingdom

Scottish company Eneus Energy has secured planning consent for a proposed green hydrogen/ammonia plant in Orkney, Scotland, which would be the first commercial facility of its kind in the U.K.

The development, near Evie, was approved by the Orkney Council Planning Committee on Jan. 20, according to a ReNews.biz report, citing Eneus Energy. Initial reports indicated the plant would produce 11 mt/d of ammonia.

Along with the proposed wind turbines’ extension at Hammars Hill, Eneus said the plant will harness the renewable electricity generated by the wind turbines to produce hydrogen from water, and then combine the gas with nitrogen from the air to form ammonia.

Eneus Energy is working in conjunction with locally-owned Hammars Hill Energy and Green Cat Renewables. The latter company has been acting as planning agent for both parties. Green Cat also provided technical support and project management services, producing the planning and technical assessments to support the planning application.

The wind farm extension will see two 150-metre turbines built, adding 8.4MW to the existing 4.5MW project.

Russia’s Natural Resources Agency Cites PhosAgro, Acron for Lake Contamination

News, News Briefs, Russia

Russia’s Federal Service for the Supervision of Natural Resources (Rosprirodnadzor) has assessed the cost of environmental damage at Lake Umbozero in the country’s northwest Murmansk region as a result of contamination last summer following anomalous flooding allegedly by apatite mining subsidiaries of PhosAgro and Acron Group, respectively JSC Apatit and JSC Northwestern Phosphorus Co. (NWPC).

The natural resources’ directorate calculated the cost of the damage at over RUB5 million (approximately $68 million at current exchange rates), according to an Interfax report, citing the Baltic-Arctic interregional directorate of Rosprirodnadzor.

Acron Group had not responded to Green Markets’ enquiries for comment by press time.

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