All Posts from April 23, 2021

Magro Steps Down as Nutrien CEO; Growth Strategy Expected with Successor

Featured, News, Saskatchewan

Nutrien Ltd. on April 18 announced that Chuck Magro is stepping down from his role as President and CEO of the company. Nutrien said its Board of Directors has appointed former Viterra Inc. President and CEO Mayo Schmidt to succeed Magro. Schmidt has served as Nutrien’s independent Board Chair since March 2019 (GM March 29, 2019).

Nutrien said Magro is leaving the company to pursue other opportunities, but will be available until May 16, 2021, to facilitate a smooth transition. The company also announced that Russ Girling, former President and CEO of TC Energy, has been named Chair of the Nutrien Board of Directors, succeeding Schmidt.

“Mayo is a remarkable leader who is committed to our values of safety and integrity, our purpose, and our strategy focused on sustainably feeding the world,” said Girling. “Under his leadership, along with our deep and experienced executive leadership team and our 27,000 dedicated employees, the board is confident the company is well positioned to continue to grow and create enduring shareholder value.”

Magro had led Nutrien since its formation in January 2018 from the merger of Agrium Inc. and Potash Corp. of Saskatchewan Inc. (GM Jan. 5, 2018). Prior to that he had served as Agrium’s CEO since 2013 (GM Oct. 7, 2013) after taking on the role of Chief Operating Officer in 2012. He also served as Agrium’s Executive Vice President, Corporate Development, and Chief Risk Officer after joining the company in 2009.

“I am very proud of the strong foundation we have built at Nutrien over the last several years,” Magro said. “I am grateful for the dedication of our employees, and the important partnerships we have forged with our customers and stakeholders. I have enjoyed every moment of my time at Nutrien, and I wish the company and its people continued success. I look forward to working with Mayo over the coming weeks to support a seamless transition and to my next adventure.”

The abrupt shakeup was a surprise to shareholders and the fertilizer industry. The National Post in Toronto, citing a number of industry and financial analysts, said the appointment of Schmidt to succeed Magro likely signals a more aggressive growth strategy for Nutrien, given Schmidt’s history of deal-making in his more than 30 years of agricultural business experience.

This history includes orchestrating the acquisition of Agricore United by Saskatchewan Wheat Pool in 2007 (GM Sept. 3, 2007) while Schmidt was serving as President and CEO of the Canadian grain cooperative, a position he had held since 2000. That deal created Viterra Inc., one of Canada’s largest grain handlers and a globally diversified agri-business company. Under Schmidt’s leadership, Viterra acquired Australia’s ABB Grain (GM May 25, 2009) before being purchased by commodity trader Glencore PLC in 2012 (GM March 26, 2012).

As part of the Glencore deal and to satisfy regulators, Viterra sold its Canadian retail assets – which included approximately 210 retail stores across Western Canada – to Agrium (GM Oct. 7, 2013), and Schmidt joined Agrium’s board in 2012 (GM Feb. 18, 2013). His most recent senior position was as President and CEO of Hydro One Limited, Canada’s largest utility, from September 2015 to June 2018.

“The outlook for our business is exceptionally strong,” said Schmidt. “I look forward to leading the continued execution of Nutrien’s strategy and driving industry-leading performance across all our lines of business. Over the coming weeks, I will be connecting with our employees, valued customers, and shareholders to continue building our positive momentum and our focus on advancing sustainable solutions to feed a growing planet.”

According to a number of investors cited by the National Post, the list of possible moves that Schmidt might consider includes selling Nutrien’s retail business to focus on fertilizer production, or selling its phosphate business to consolidate the nitrogen industry, including a potential takeover bid for some North American rivals.

Others see a more aggressive move to potentially expand Nutrien’s retail footprint or its position in digital agriculture. “Magro delivered synergies from the PotashCorp-Agrium merger,” said Jason Miner, Senior Analyst with Bloomberg Intelligence. “Seizing the opportunity to lead in digital agriculture is Schmidt’s top opportunity, in our view.”

“We believe Schmidt has the right expertise and background in agriculture to step into the new role, but we think the initial uncertainty around company strategy under Schmidt’s new leadership may weigh on shares in the near-term,” said Andrew Wong of Royal Bank of Scotland. Nutrien shares were down 1.3 percent on April 20 after falling 3.5 percent on April 19. Shares are up 35 percent year-over-year on the strength of soaring fertilizer and corn prices, but have gained only 2 percent since trading began in 2018.

With Magro’s resignation from the board, Nutrien said it has decided to reduce the number of directors from 12 to 11, which were identified in Nutrien’s management proxy circular on March 29. Those directors will stand for election at Nutrien’s Annual Meeting of Shareholders scheduled for May 17, 2021.

Senate Committee Passes Ag Climate Bill

News, News Briefs, U.S.

The U.S. Senate Committee on Agriculture, Nutrition, and Forestry on April 22 voted unanimously in support of S. 1251, Growing Climate Solutions Act of 2021. The bill, sponsored by Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) and Sen. Mike Braun (R-Ind.), establishes a USDA technical assistance and certification program to assist producers and forest owners seeking to participate in voluntary carbon markets.

“Addressing the climate crisis is one of the most urgent challenges we face, and our farmers and foresters are an important part of the solution,” said Stabenow. “Our bill is a perfect example of how we can work across the aisle and find common ground to address a critical issue affecting all of us and our future.”

The bill is supported by numerous agriculture groups, including the Agricultural Retailers Association (ARA) and the Food and Agriculture Climate Alliance (FACA).

“This important legislation will create a clearer framework for how this private sector carbon credit marketplace operates and decrease barriers to entry for the ag industry,” said ARA President and CEO Daren Coppock. “By creating a more defined certification process for greenhouse gas technical assistance through USDA’s third-party verifier certification program, a role that ag retailers will be involved in, farmers will have a better understanding of the market and benefits it can provide for the industry.”

As companies seek to offset greenhouse gas emissions, Coppock said ag retailers can help their farmer customers navigate a “cumbersome” carbon credit marketplace that should be voluntary and incentive-based.

“Any long-term solutions to addressing the challenges we face with an ever-changing climate will only be found through the continued partnership between the agricultural retailer and their farmer customers,” Coppock said. “While this is the first of many hurdles for the bipartisan proposal, ARA will continue to support its passage in Congress and looks forward to being involved as it moves forward through the legislative process.”

Yara International ASA – Management Brief

Management Briefs, Scandinavia

Yara International ASA, Oslo, has named Geraldo Mattioli as Senior Vice President and President of Yara North America Inc., effective May 1. He is currently Vice President Farming Solutions America and has close to 30 years of experience in the ag industry, including a career with Yara North America that started in 2005.

Mattioli has held a number of positions within Yara North America’s Sales & Marketing team, including Vice President of Western U.S. and Vice President of Premium Products. He has also worked with Yara in several geographies such as Europe, Brazil and Latin America, during his career. He will be based in Tampa.

Magnus Ankarstrand, who has been heading up Yara’s activities in North America, was recently appointed to lead Yara’s new Clean Ammonia division (GM Feb. 12, p. 1).

Martin Results Exceed Internal Forecast; Fertilizer Volumes Up, Sulfur Down

Earnings, News, Texas

Martin Midstream Partners LP (MMLP), Kilgore, Texas, reported a decline in first-quarter net income to $2.5 million ($0.06 per limited partner unit) on revenues of $201 million, compared to the year-ago $8.8 million ($0.22 per unit) and $199 million, respectively. Adjusted EBITDA was $30.9 million down from $31 million. However, MMLP said the results exceeded internal forecasts.

“For the first quarter of 2021, the partnership exceeded our internal earnings forecast by $3.7 million despite headwinds from the February winter storm that plunged Texas and surrounding areas into a deep freeze,” said Bob Bondurant, President and CEO of Martin Midstream GP LLC, the general partner of the partnership.

“The majority of the impact from winter storm Uri was centered around our Transportation and Sulfur Services segments as refineries ran at reduced rates or halted operations entirely. Our Smackover Refinery was down approximately nine days due to the storm, during which time we began preparations for the previously scheduled turnaround in March,” he continued. “This allowed us to minimize the amount of downtime at the refinery which was back in operation by March 9th. In the NGL segment, butane and propane margins were strong as customary seasonal demand returned.

“At this time, the refineries we service have restored operations and utilization has climbed back to 86 percent of Gulf Coast capacity,” he added. “The COVID-19 pandemic continues to impact demand, but appears to be lessening as vaccinations become more widespread and the economy improves as a result. The partnership remains focused on our leverage reduction goals and optimizing our assets to maximize free cash flow generation.”

MMLP declared a quarterly distribution of $0.005 per unit or $0.02 per unit annually.

Operating income at MMLP’s Sulfur Services segment, which includes both sulfur and fertilizer, was off 43 percent to $6.4 million on revenues of $34.8 million, down from the year-ago $11.3 million and $28.3 million. Adjusted EBITDA for the unit was $9.2 million, down from $10.1 million.

The results reflected increased fertilizer demand compared to the first-quarter 2020 offset by lower refinery utilization volumes during first-quarter 2021 as a result of COVID-19 and the impact from winter storm Uri. First-quarter 2020 also benefited from business interruption insurance proceeds received of $2.7 million as a result of storm damage to the Neches shiploader.

First-quarter fertilizer volumes were up 28 percent to 95,000 lt from the year-ago 74,000 lt, while sulfur was off 60 percent to 73,000 lt from 183,000 lt. Total volumes were down 35 percent to 168,000 lt from 257,000 lt.

Gensource Potash Corp. – Management Brief

Management Briefs, Saskatchewan

Junior miner Gensource Potash Corp., Saskatoon, said on April 21 it has appointed Stephen Dyer and Alton Anderson to its Board of Directors, effective April 21, 2021.

Dyer is the former CFO, Senior Vice President, and Retail President at Agrium Inc. and has 30 years of experience in the ag sector.  

Anderson is the current Gensource CFO and has over 30 years of experience in the fertilizer industry, including 22 years at Potash Corp. of Saskatchewan Inc. and Nutrien Ltd. He is a Chartered Professional Accountant (CPA, CA) with a Bachelor of Commerce degree from the University of Saskatchewan. I

Gensource noted that Paul Martin stepped down from the board, effective April 9, 2021. “Paul has been with Gensource since the beginning of the company’s focus on small-scale, sustainable potash production,” said Gensource President and CEO Mike Ferguson. “He has added tremendous value and provided unwavering support over the years, and the board and management at Gensource convey sincere thanks and wish Paul great success in his next ventures.”

Ostara Procures Funding for Acquisition

Featured, News, Specialty, Vancouver

Ostara Nutrient Recovery Technologies Inc., Vancouver, B.C., said on April 19 it has closed US$20 million in financing led by Forage Capital, Riverview, Fla., with additional participation from Export Development Canada (EDC). Ostara said the proceeds will be used to acquire and upgrade a strategically located granulation fertilizer production facility in St. Louis from Bruce Oakley Inc., Little Rock, Ark.

The deal was announced last November (GM Nov. 6, 2020). Ostara said the purchase will allow it to significantly scale up its capacity for the production of its Crystal Green fertilizers.

“Ostara is at the center of a movement in agriculture where end-users are demanding crop nutrition solutions that are superior from both an agronomic and environmental perspective,” said Dan Parmar, Ostara President and CEO. “Our corporate philosophy is based on these fundamentals, and we are very pleased to be aligned with leading global investors in agriculture who support our strategy.”

RWE, H2U Partner on Green Hydrogen/Ammonia

Ammonia, Australia, Germany, Hydrogen, News, News Briefs

Germany’s RWE Supply & Trading, Essen, and Australian hydrogen project developer The Hydrogen Utility Pty Ltd (H2U), Adelaide, said on April 15 they have signed a Memorandum of Understanding to join forces to develop hydrogen trading between Australia and Germany.

The two companies plan to bring green hydrogen produced in Australia to Europe. This is in line with the objective of HySupply, a 24-month German-Australian feasibility study that was started in December 2020 by the German Academy of Science and Engineering and the Federation of German Industries.

RWE said a planned LNG terminal in Brunsbüttel, Germany, where RWE intends to book capacity, could potentially handle imports of H2U green hydrogen.

H2U is developing several hydrogen projects in Australia and New Zealand, such as the Eyre Peninsula Gateway Project. At the planned location in South Australia, they want to build a 75-megawatt electrolysis plant that can supply hydrogen for about 40,000 mt/y of ammonia. In a second phase of expansion throughout the 2020’s H2U wants to extend the capacity to 1.5 gigawatts of electrolysis.

“H2 is the perfect long-term solution to decarbonize industry, aviation, and the transport of heavy goods,” said Javier Moret, RWE’s Global Head of LNG. “Australia is one of the countries that has excellent conditions to produce green hydrogen – low cost of production and a stable framework. As a globally active trader of commodities, we have a lot of experience with shipping energy carriers – including Australian LNG – around the globe, and see ourselves as a facilitator for global hydrogen trading.”

“We see the trading of green hydrogen to Europe being fully decarbonized using green ammonia as the shipping fuel of the future,” said H2U CEO Dr. Attilio Pigneri. “H2U has attracted a cornerstone investment from Mitsubishi Heavy Industries of Japan, and we see a strong future for green hydrogen as the decarbonizing energy in power grids, gas grids, mobility, and industry.”

RWE is also constructing renewable energy plants in Australia. In Limondale, the company is currently building one of the largest solar farms in the country. RWE said it is driving forward some 30 hydrogen projects, mostly located in the Netherlands, Germany, and the U.K.

Verdesian Acquires Cytozyme Laboratories

News, News Briefs, Specialty

Specialty crop input producer Verdesian Life Sciences, Cary, N.C., announced on April 16 that it has acquired Cytozyme Laboratories Inc., Salt Lake City.

“This acquisition is a tremendous sign, not just for Verdesian Life Sciences, but for the category of nutrient use efficiency products,” said Verdesian CEO Kenny Avery. “For the past three years we have worked side by side with Cytozyme leadership as we partnered on Crop+, Seed+, and Seed+ Graphite technologies – products that have filled needs across agriculture and that have been embraced by the market. This partnership ensures that Verdesian will continue to innovate for the betterment of farmers everywhere. The knowledge and experience that Cytozyme brings to global agriculture is a tremendous asset as well.”

“For more than four decades, Cytozyme’s mission has been to help farmers achieve sustainable yields through innovative solutions,” said Cytozyme CEO Eric Baughman. “We firmly believe that Verdesian Life Sciences has the technology, capabilities, and the people to continue that mission in a way that is true to our ideals. Our two companies’ product mixes are incredibly complementary; this is a great day for growers everywhere.”

Since its start in 2012, Verdesian has grown its nutrient use efficiency technologies with the addition of products such as Avail, NutriSphere-N®, NUE-Charge G, Take Off LS, MicroSync products, Primacy Alpha, Nutri-Phite®, and Primo R1.

“This acquisition is part of Verdesian’s broader merger and acquisition growth strategy toward maintaining leadership across the nutrient use efficiency space,” said Rick Riegner, Verdesian Executive Vice President of Strategy & Business Development, “and it is further evidence of the continued embrace of products that offer sustainable solutions to farmers.”

Indian Coal-to-Urea Plant Receives Subsidy

India, News, News Briefs, Urea

India’s Cabinet Committee on Economic Affairs (CCEA) has given approval for a subsidy to promote the use of coal gasification being used to revive the Talcher Fertilizers Ltd. (TFL) urea project, according to the Press Trust of India. India has large coal reserves but is short on natural gas, a traditional nitrogen feedstock. There are currently no operational coal-to-urea plants in India.

Stamicarbon, a unit of Maire Tecnimont Group, Milan, has licensed the technology for a grassroots urea plant for TFL (GM Jan. 24, 2020). It will deliver a package for a 3,850 mt/d melt and prilling plant. At the time of the license, plant commissioning was expected in 2023. The complex is in the Angul District in the State of Odisha, in eastern India.

TFL is a joint venture between Gail India Ltd., Coal India Ltd., Rashtriya Chemicals and Fertilizers Ltd. and Fertilizer Corp. of India Ltd. (FCIL).

Despite the subsidy, other press reports have recently suggested that tensions between China and India may have slowed the project. China’s Wuhuan Engineering has the contract to build TFL’s coal gasification unit (GM Sept. 20, 2019).

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