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EuroChem EBITDA up, revs down; Ben-Trei contributes in 2015

February 22, 2016News2192

EuroChem Group AG reported a 4 percent rise in EBITDA, to $1.58 billion on revenues of $4.54 billion for the year 2015. EBITDA was up from $1.51 billion in 2014, but revenues were 11 percent lower on the prior year’s $5.09 billion. Cash from operations for 2015 increased 10 percent, to $1.06 billion from $964 million.

EuroChem attributed the decline in revenues primarily to the lower pricing environment across the group’s business, despite a slight increase in sales volumes. Favorable currency movements continued to mitigate the effects of lower prices and supported the 4 percent growth in EBITDA for the year, the group said.

Fourth-quarter EBITDA fell 15 percent, to $360 million on revenues of $1.05 billion, down from $422 million and $1.15 billion respectively, for the same prior-year period. Cash from operations for the final quarter of the year plummeted 80 percent, to $36 million from $176 million in fourth-quarter 2014.

EuroChem increased sales volumes of nitrogen and phosphate fertilizers by 2 percent to a full-year total of 10.81 million mt, up from 10.62 million mt in 2014. The additional 195,000 mt were primarily generated by higher nitrogen volumes, which benefited from additional ammonia production capacity. The start-up of Nevinnomysskiy Azot’s 1B ammonia unit last year boosted the plant’s annual ammonia production by 19 percent, to over 3 million mt for the first time.

EuroChem said its acquisition of the U.S.-based Ben-Trei distribution assets in the second half of the year supported a 35 percent year-on-year increase in sales of third-party products (GM Nov. 2, 2015). For the year, EuroChem sold 2.13 million mt of third-party products, including 1.27 million mt of ammonium sulfate. Ben-Trei supported a 5 percent increase in North American sales, with the region accounting for 12 percent of 2015 sales, compared with 10 percent in 2014.

	Q4 2015	Q4 2014	Change	Full year 2015	Full year 2014	Change
Nitrogen
Revenues ($m)	459	540	-15%	1,919	2,322	-17%
EBITDA ($m)	202	207	-3%	867	865	+0.2%
Sales volumes¹(‘000 mt)	1,818	1,641	+11%	6,914	6,751	+2%
Phosphates
Revenues ($m)	394	469	-16%	1,937	2,185	-11%
EBITDA ($m)	88	150	-42%	540	477	+13%
Sales volumes¹ (‘000 mt)	826	889	-7%	3,896	3,865	+1%
Potash
Revenues ($m)	–	–	n/a	–	–	n/a
EBITDA ($m)	-10	-15	n/a	-16	-32	n/a
¹ Includes some intra-group sales

PhosAgro to focus on expansion/modernization

February 22, 2016News, News Briefs2192

Moscow — PhosAgro on Feb. 16 said its top priority for 2016 is to move ahead with new production capacities and modernization plans for existing facilities. Investment projects include construction of a new, high-tech ammonia production facility with an annual capacity of 760,000 mt, a new 500,000 mt/y granulated urea line, and overhaul of existing urea and phosphate-based fertilizer capacities at PhosAgro-Cherepovets, all of which are due to be completed in 2017. The company will also focus on developing its upstream capacities at Apatit, including increases to mining capacities at the Kirovskiy and Rasumchorrskiy mines, as well as completing the modernization of ANOF-3, which will increase phosphate rock production capacity and add nepheline concentrate production capacity. These projects are due to be completed by 2017. PhosAgro said it was able to increase fertilizer production in 2015 by 630,000 mt, to 7 million mt. It expects to be able to grow production another five percent going forward. “We have increased sales volumes to premium markets, while in parallel strengthening our position as the top fertilizer supplier to Russian farmers,” said CEO Andrey Guryev. “Over the past three years our domestic sales have grown by more than one third, to 1.63 million mt of fertilizers and feed phosphates. We have increased quality and range of fertilizers we sell, and we have also expanded the selection of services we offer regarding proper application of mineral fertilizers, their storage and delivery to end customers.”

North Iowa Co-op details expansion

February 22, 2016News, News Briefs2192

Thornton, Iowa — North Iowa Cooperative’s new $5.5 million dry fertilizer facility is ready to come online in the next few weeks. “We’ll be using a Kahler Automation system, which automates the plant from the point of receiving the product and blending and delivering to our customers,” Agronomy Manager Creighton Nelson told Green Markets. “And all that can be controlled from a single computer console.” Nelson added that the new facility, constructed over the last several months, will operate eight fertilizer bins with a total capacity of 13,000 tons. Two anhydrous ammonia tanks with a total capacity of 62,000 gallons for filling nurse tanks will be located only a couple of blocks from the main facility. At the same time, the co-op is setting its sights on breaking ground this spring, at a cost of $635,000, for a two-million-gallon tank to store UAN. There are also plans to install a bulk chemical and package warehouse. Ten new employees were added recently, increasing the total number to about 50, with expectations to hire two more full-time employees and six-to-eight part-timers on a seasonal basis.

Simplot boosts CRF coating production

February 22, 2016News, News Briefs2192

Boise — The J. R. Simplot Co. said Feb. 17 that it has increased the availability of its controlled release fertilizer (CRF) coating Gal-Xeone™ in conjunction with newly expanded operations in Florida. All polymer-coated products contained within the Best and Apex product lines will be converted to Gal-Xeone coating in the next several months. Simplot first introduced Gal-Xeone polymer coating capabilities in 2013, and has now expanded product availability through its relationship with Florikan-ESA, Sarasota, Fla. Plans are also in place for Simplot to commission coating operations at its Lathrop, Calif., facility later this spring. Simplot says the Gal-Xeone polymer coating is a controlled-release technology that provides continuous nutrient delivery to match plant uptake needs for optimal plant health. This patented coating uses a technology developed with support from NASA to allow water to enter the prill, then carry the nutrient solution out through a precise, semi-permeable membrane. “Plants, including turf and ornamentals, are healthiest with constant nutrition over an extended period of time,” said Dr. Terry Tindall, Simplot director of agronomy. “Simplot Gal-Xeone polymer coating allows consistent, predictable delivery of plant nutrients using advanced technology not common with traditional fertilizers.” Simplot said today’s environment demands attention to sustainability, and Gal-Xeone is based upon that principle. It says with proven and controlled nutrient release from two-to-12-plus months, this sustained nutrient delivery improves plant health. At the same time, it reduces loss of nutrients due to volatilization and leaching while minimizing plant injury. Moreover, because of the precise release of nutrients, there is less labor and logistics expense in nutrient application. The company said the product is a 4R Nutrient Stewardship® best practice.

Hezbollah threatens Israeli NH3 tank

February 22, 2016News, News Briefs2192

Tel Aviv — The leader of the Lebanese Shiite Hezbollah organization has threatened to use missiles against the Haifa Chemicals ammonia storage facility and wreak havoc in northern Israel in the event of a war. Hassan Nasrallah said Feb. 16 that the impact of firing missiles at the ammonia tank in Haifa would be equivalent to a nuclear bomb. He cited an Israeli expert as saying that an attack on the ammonia plant could kill tens of thousands of people in the region. Nasrallah said that the residents of Haifa are worried about the plant with or without a war. The Israeli government approved plans to shut down the facility, which has a storage capacity of 12,000 mt of ammonia, back in 2013, and open an ammonia production plant in southern Israel that would use domestic natural gas (GM Jan. 29, p. 15). Israel’s Environmental Protection Ministry said in response to the Hezbollah threats that it would issue a final tender for the project by the end of March. Industry sources said that the tender has been delayed in recent months over concerns about the economic viability of the project, which would be based on domestic natural gas from the Tamar offshore field. The sources said that domestic gas prices are currently too high at a time when global ammonia prices are falling. Even if all of the outstanding issues are resolved in the coming weeks, the southern Israel project will not be up and running before 2019.

Anglo accelerates phosphate sale

February 22, 2016News, News Briefs2192

London — Anglo American plc has 16 bidders to date for its niobium and phosphates business, which it put up for sale late last year. The company expects to draw up a shortlist in the next two weeks. Anglo CEO Mark Cutifani, commenting on the sale in a television interview to Bloomberg this week, said the company may sell the Brazil-based unit within the next two-to-three months. A spokesperson for Anglo confirmed Cutifani’s comments and told Green Markets the company is still open to submissions from other bidders for the unit. Anglo put the niobium and phosphates unit on the block in December as part of an accelerated and more radical restructuring to redefine the focus of the group’s asset portfolio and cut debt (GM Dec. 14, 2015). Anglo said Feb. 16 it was accelerating its asset sales to raise a targeted $3-$4 billion this year, and is planning to focus its core portfolio on diamonds (De Beers), platinum group metals, and copper. The group reported a full-year 2015 loss of $5.62 billion and an end-year net debt of $12.9 billion.

Agrium announces stock buyback

February 22, 2016News, News Briefs2192

Calgary — Agrium Inc. on Feb. 17 announced plans over the next 12 months to buy back up to 6,908,450 common shares, being 5 percent of Agrium’s 138,169,000 issued and outstanding shares as of Feb. 5, 2016. All common shares purchased will be returned to treasury for cancellation. In 2015, Agrium purchased approximately 5,574,331 common shares at an average share price of $100.25 pursuant to its prior normal course issuer bid that expired Jan. 25, 2016.

USN expects full production in mid-2016

February 22, 2016News, News Briefs2192

Mosheim, Tenn. — US Nitrogen LLC (USN) told Green Markets Feb. 18 that it is completing construction on its liquid ammonium nitrate plant in Greene County, Tenn. Commissioning processes are in progress and will continue over the following months in a phased approach. Current plans call for the facility to come online for full production in mid-2016. Local residents, many of whom are vocally opposed to the project, had complained last week that orange smoke and a smell of burnt rubber was coming from the plant. USN did not respond to the allegations.

El Dorado NH3 plant mechanically complete

February 22, 2016News, News Briefs2192

Oklahoma City — LSB Industries Inc. said Feb. 16 that the new 375,000 st/y ammonia plant at its El Dorado, Ark., facility is now mechanically complete, adding that process vessels and rotating equipment, including associated piping and valves, have been installed. It said utility equipment systems such as cooling water, steam generation, raw water treatment, and air systems, along with related piping, have been installed. Currently, all that remains to fully complete construction activities is the connection of the electronic instrumentation wiring to the field instruments, along with the painting and insulation of the piping and process vessels and the final grading and concrete containment for proper drainage of the process area. As of Jan. 31, 2016, LSB’s investment in its El Dorado Expansion Project, which, along with the ammonia plant, includes the construction of a new nitric acid plant and concentrator that was completed in 2015, totaled approximately $730 million. LSB expects the remaining expenditures necessary to complete the pre-commissioning and commissioning of the ammonia plant and to put it into production to be in the range of $101-$125 million. Pre-commissioning will involve the flushing of any materials from the piping throughout the plant, in addition to the installation of the process catalyst inside the reactor vessels. The commissioning phase will entail the activation and filling of the utility systems, reduction of process catalyst, and final testing of process control systems. “Mechanical completion represents one of the final critical phases in our EDC expansion project,” stated Daniel Greenwell, LSB CEO. “We were able to achieve mechanical completion in the timeframe that we outlined in September of last year, and we continue to expect ammonia production at El Dorado to begin early in the second quarter of 2016. We also expect that the cost of the project will not exceed the budget of $831 million – $855 million that we have previously disclosed. We believe that the ammonia plant will significantly enhance the financial performance of the El Dorado facility and have a positive economic impact to LSB’s overall performance. We look forward to sharing these results with our shareholders in the upcoming quarters.”

Agro leads way for Tessenderlo in 2015

February 22, 2016News, News Briefs2192

Brussels — The Tessenderlo Group’s Agro segment led the way for the company in 2015, posting a 39.7 percent increase in REBITDA and a 23.2 percent uptick in revenues. Agro REBITDA was €138.9 million on revenues of €645.6 million, up from 2014’s €99.3 million and €524 million, respectively. The company told analysts that with the strong dollar and good margins on potassium sulfate, it was able to considerably increase the unit’s cash flow. Agro includes Phoenix-based Tessenderlo Kerley Inc. Tessenderlo-wide REBITDA was up 33.1 percent to €180.4 million on revenues of €1.59 billion, an increase from €135.6 million and €1.43 million. Fourth-quarter REBITDA was €38.4 million on revenues of €374.4 million, up from €19 million and €319.8 million, respectively.

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