All Posts from November 24, 2021

FBN Raises $300 Million in Funding; Expands Relationship with ADM

Featured, News, Specialty, U.S.

Farmers Business Network (FBN) on Nov. 18 announced the closing of $300 million in Series G funding, which the company will use for general corporate and working capital purposes and to fuel the growth of both its FBN Direct and FBN Financial platforms.

In particular, FBN said it will expand its financial offerings with new land and operating and equipment loan and insurance products to meet the financial needs of farmers. IP investment in FBN Direct will focus on crop protection, seed breeding and biologicals, and robotics with on-farm research and development.

FBN said it intends to hire more than 350 new team members in the next year and make significant investments in technology and data science. The funds will also support FBN’s Gradable® platform, which measures and verifies the carbon score of grain and other crops and allows farmers to connect with grain buyers who are looking to source low-carbon, higher-premium bushels.

“Our mission is always to increase the profit potential of family farms, and this investment will enable us to continue to innovate for our network of more than 33,000 farmers whose operations span North America and Australia,” said Amol Deshpande, FBN CEO and Co-Founder. “We continue to invest in IP and technology that deliver industry-leading efficiency, choice, and price transparency for purchasing ag inputs while we scale our fintech and sustainability platforms to provide farmers the information and data they need to make the best choices for their own bottom lines.”

The funding round was led by Fidelity Management & Research Company LLC, with participation from LN Mittal Family Office, ADM Ventures Investment Corp., Colle Capital Partners, Walleye Capital, and Tudor Investment Corp. The financing included existing investors such as funds and accounts managed by BlackRock, T. Rowe Price Associates Inc., GV, Baron Capital Group, DBL Partners, BAM Elevate, and certain funds managed by Fidelity Investments Canada ULC and Temasek Holdings.

FBN also announced on Nov. 18 that Chicago-based Archer Daniels Midland (ADM) has made an equity investment as part of FBN’s latest capital funding raise, and that the companies have signed a letter of intent to expand their relationship through a range of potential areas of cooperation. ADM’s minority investment in FBN is being made via ADM Ventures, the company’s corporate venture capital arm.

The companies said the partnership combines ADM’s scale across the global food and agriculture value chain with FBN’s digital farm commerce and data-analytics capabilities to identify opportunities to increase farmer profitability and expand sustainable agricultural practices and product accessibility.

“This partnership with ADM promises to accelerate the development of our technologies, including our grain and sustainability platforms, that are designed to increase farmers’ profit potential,” Deshpande said. “This partnership enables us to double down on putting farmers first by further investing in technologies that lower costs, improve transparency, and create local community development opportunities in rural areas.”

ADM and FBN said they have agreed to examine several areas of collaboration, including developing premium end markets for low-carbon grain that will reward farmers for the adoption of regenerative practices. The two companies launched a pilot program earlier this year to use FBN’s Gradable platform to measure and verify the carbon score of soybeans, and to connect farmers with customers wishing to purchase low-carbon intensity crops.

Other areas of potential cooperation include enabling FBN’s 30,000 farmers to sell grain to ADM’s network of origination facilities with digital record-keeping, sustainability tracking, and payments through the Gradable platform; advancing research to develop new biologicals, seed traits, fertilizers, and crop protection products; enabling FBN farmers to purchase ADM products such as fertilizer and animal nutrition through FBN’s e-commerce and finance platform; and increasing access to inputs for FBN farmers by leveraging ADM’s distribution network.

“Differentiated grain and sustainable solutions are two of ADM’s strategic growth platforms, and FBN is the perfect partner to help power our success as we work together to find new ways to cultivate incremental value for stakeholders across the food, sustainable solutions, and agricultural value chain,” said Greg Morris, President of ADM’s Ag Services & Oilseeds business.

“We’ve already been working with FBN and producers to connect verifiable low-carbon crops with market demand, and now we’re excited to explore new areas of growth, from digital technology and analytics, to e-commerce, to shared infrastructure and geographical expansion,” Morris said.

OCI Reports Methanol Strategic Alliance

Europe, Hydrogen, Methanol, Middle East, News, News Briefs

OCI NV, Amsterdam, on Nov. 22 reported that it has entered into a strategic alliance with ADQ and Alpha Dhabi Holding through the placement of 15 percent of the OCI Methanol Group. Consideration was US$375 million.

The unit will be incorporated as an Abu Dhabi Global Market (ADGM) company. OCI said the company will focus on clean methanol as a fuel for the future, with hydrogen as the primary feedstock.

OCI has been mulling its options for its methanol business for some time. It said the unit benefits from several strategic advantages as the only producer with facilities and extensive distribution and storage capabilities in the U.S. and Europe, which are located near major inland demand centers or on major global shipping lanes next to key bunkering hubs.

“This strategic partnership can accelerate the group’s position in the hydrogen economy,” said OCI Executive Chairman Nassef Sawiris. “With methanol as the leading clean fuel for the shipping industry and other applications, we believe we are best positioned to execute growth initiatives and capitalize on the growing demand for clean hydrogen in downstream markets.”

“Following the successful experience of Fertiglobe including the IPO and successful partnership with ADNOC, we believe this new strategic partnership strengthens our commitment to Abu Dhabi as a future hydrogen hub,” said Ahmed El-Hoshy, OCI CEO. “Together with a world-class OCI Methanol team and benefiting from strong support from our partners, we can look forward to a successful enterprise.”

OCI’s production capacity spans four continents and comprises approximately 16.2 million mt/y of hydrogen-based products including nitrogen fertilizers, methanol, biofuels, diesel exhaust fluid, melamine, and other products.

ADQ, established in Abu Dhabi in 2018, is one of the region’s largest holding companies, with direct and indirect investments in more than 90 companies locally and internationally. Alpha Dhabi Holding (formerly Trojan Holding), started in 2008, is one of the fastest growing holding companies in the Middle East, with investments and developments spread across various sectors, construction and real estate, hospitality, healthcare, and infrastructure, and transportation projects.

The transaction is expected to be finalized this year and remains subject to definitive legal documents.

Court Allows Ag Groups to Present Arguments in Mosaic Phosphate Trade Case

Featured, Morocco, News, Phosphate, Russia, Tampa, U.S.

The U.S. Court of International Trade on Nov. 22 granted a motion allowing agricultural trade groups – Agricultural Retailers Association, National Corn Growers Association (NGCA), American Soybean Association, National Cotton Council of America, and the National Sorghum Producers – to file an amicus curiae brief in a trade case that appealed U.S. Department of Commerce (DOC) and U.S. International Trade Commission decisions imposing countervailing duties on U.S. phosphate imports from Morocco and Russia.

DOC calculated subsidy margins and corresponding duty rates of 47.05 percent on EuroChem and 9.19 percent on PhosAgro, as well as 17.2 percent for other Russian producers. DOC imposed a rate of 19.97 on phosphates from Morocco’s OCP.

Ultimately, OCP, EuroChem, and PhosAgro appealed to the U.S. Court seeking to quash the duties, while U.S. phosphate producer The Mosaic Co., the petitioner, appealed seeking to increase the duties (GM May 14, p. 1; June 4, p. 1; June 11, p. 1).

The Court said the proposed brief represented the actual users of the fertilizer, the farmers, i.e., those who will ultimately pay the price of the tariffs imposed. It said to suggest that the interests of a farmer who tills a couple thousand acres of farmland are in all respects represented by multinational corporations is to ignore economies of scale.

NGCA said Nov. 23 that farmers now face severe shortages and high fertilizer costs, and called on Mosaic to withdraw the petition. Likewise, it had the same request of CF Industries Holdings Inc., which filed a petition against imports of UAN from Russia and Trinidad & Tobago.

NCGA said the financial impact of tariffs are beginning to dim planting forecasts for 2022. It said fertilizer costs between 2021 and 2022 are projected to lower net incomes by 34 percent in Illinois, according to new projections from economists at the University of Illinois.

“The tariffs have created a financial hardship for farmers,” said NCGA President Chris Edgington. “Another year of shortages and tariffs will be devastating.”

The Court could render a decision in 2022.

Trains Again Moving Toward Vancouver; Significant Commodity Backlogs Still Reported

Canada, Featured, News, Vancouver

Canadian Pacific announced on Nov. 22 that it would reopen its railway between Kamloops, B.C. and Vancouver by mid-day Tuesday, Nov. 23, while Canadian National Railroad Co. was expected to reopen its corridor to Vancouver on Wednesday, Nov. 24.

“I am extremely proud of the CP team,” said CP President and CEO Keith Creel. “Their extraordinary dedication, grit, and perseverance in the face of extremely challenging conditions are the reasons we are able to restore our vital rail network in only eight days. The following 10 days will be critical. As we move from response to recovery to full service resumption, our focus will be on working with customers to get the supply chain back in sync.”

CP said that some 30 locations across its Thompson and Cascade subdivisions were damaged, with 20 resulting in significant loss of infrastructure.

The Ag Transport Coalition told Bloomberg it may take two to four weeks for the normal flow of grain rail traffic to resume near the Port of Vancouver. More than 5,000 railcars carrying grain are estimated to be idled in the Vancouver corridor. The backlog in rail traffic far exceeds grain, with all commodity sectors impacted. Canpotex Ltd. earlier said it was looking to reroute potash exports to Oregon or New Brunswick (GM Nov. 19, p. 1).

FuelPositive Charts Aggressive Timeline to Green Ammonia Market

Ammonia, Canada, Green Ammonia, News, News Briefs

FuelPositive Corp., Toronto, which has been developing a modular and scalable system for producing green ammonia, reported on Nov. 18 that it is on track to launch multiple “real world” demonstration pilot projects to showcase its technology throughout 2022, with actual serial manufacturing, assembly-line style, to begin in 2023.

“FuelPositive’s technology and approach makes producing green ammonia economical, and with room for significant continuous improvements as the cost reduction curve is realized and carbon credits and other potential incentives are incorporated,” said Ian Clifford, FuelPositive CEO.

“FuelPositive’s decentralized, in situ model turns the ammonia industry on its head, dramatically reducing the dependency on massive refineries and unreliable, wildly fluctuating supply chains. End users will make what they need, where they need it, with a steady cost and supply – and all of this without greenhouse gas emissions,” Clifford added.

The company said about 80 percent of traditional or “gray” ammonia, which is produced using fossil fuels, is used by the agriculture sector, primarily as fertilizer. For green ammonia to be embraced by farmers, the company said it must be affordable, and FuelPositive is targeting farming for its first demonstration pilot project.

For the purposes of this costing model, FuelPositive has worked from a case study based on a 1,800-acre farm in Manitoba, where the average price of gray ammonia in 2021 has been calculated at C$900/mt. The delivered cost of gray anhydrous ammonia to farmers in Manitoba doubled from C$600/mt to over C$1,200/mt in a period of six months this year.

The initial FuelPositive systems will produce up to 300 kilos (500 liters) of green anhydrous ammonia per day, which amounts to roughly 100 mt/y. The company said this output is suitable for a model farm of 1,800 acres. Larger farms would add sufficient production capacity to meet their needs – easily done, since FuelPositive’s green ammonia production units are modular, scalable, and portable for precisely this purpose.

The cost of production for the case study has been calculated by FuelPositive at approximately C$560/mt (based on a hydrogen production efficiency rate of 65 percent), compared to the current average cost of C$900/mt of gray ammonia. FuelPositive is forecasting under C$500/mt for future systems as production efficiencies improve.

Electricity costs for the farm are estimated at C$0.045 per kilowatt hour. This is based on the current cost of electricity paid in Manitoba, which has a carbon-free, sustainable electricity grid. The electricity cost represents the largest component of the overall cost of the green ammonia produced in the FuelPositive system.

FuelPositive said this cost does not take into account any additional potential cost reductions related to carbon credits, which could reduce the cost by 50 percent or more, or the farmer’s own capacity to generate sustainable electricity for the FuelPositive system through solar or wind generation on site. The company said that today the cost of solar power is at parity with the Manitoba grid, however, the cost of renewables are predicted to continue to decline.

The company has raised some C$12 million, which it said will cover its cost to build a number of green ammonia production systems. The company began to build its first full-sized prototype system in June, immediately after filing for its provisional patent. The building of the second and third prototypes is scheduled to begin before the end of 2021, applying a batch-style approach to manufacturing.

The first pilot system will be ready to deploy in the summer of 2022. The second and third systems will deploy later in 2022. The company will also house one system in its facility for further development, monitoring and demonstration.

By the end of March 2022, the company said it will be validating the purity of the green ammonia produced by the first prototype system, as well as the cost expenditures. Pre-orders will begin at that point.

PhosAgro Greenlights Nitrogen Complex, Commissions Sulfuric Acid Unit

Ammonia, Featured, News, Russia, Sulfuric Acid, Urea

PJSC PhosAgro, Moscow, has taken the decision to go ahead with the building of a new ammonia and urea production complex.

The new facility will have production capacity of 1 million mt/y of ammonia and up to 1 million mt/y of urea, with construction due to start next year, according to an Interfax report, citing PhosAgro CEO Andrey Guryev.

First product is expected at the end of 2025. The group puts the capital expenditure for the project at RUB120 billion (approximately $1.62 billion at current exchange rates).

The Russian fertilizer group confirmed in June that it was studying the construction of new complex for the production of ammonia and urea, and in August said it was nearing a final investment decision (GM June 4, p. 1; Aug. 13, p. 30).

It has been considering two sites for the new project – either at Cherepovets, some 600 km north of Moscow, or at Volkhov in Russia’s Leningrad region, where it already has existing production sites.

It is unclear which site the group has chosen, or if indeed a final site decision has been made. In a Nov. 19 statement publicizing the launch of a new sulfuric acid production unit at Cherepovets, Guryev was cited as saying only that the group “is considering” the construction of a new ammonia and urea complex in Cherepovets.”

PhosAgro on Nov. 19 held a commissioning ceremony for the new “SK-3300” sulfuric acid unit, as well as for the newly-reconstructed nearby Kryolite rail station.

The new sulfuric acid unit has production capacity of 3,300 mt/d, and according to PhosAgro, is the highest-capacity sulfuric acid production unit of its kind in Russia.

The completed work at the Kryolite rail station will allow PhosAgro to boost rail freight volumes for the Cherepovets site’s railway infrastructure by more than a third – up to 16.5 million mt/y, the group said. Trains can now bring apatite concentrate to the Kryolite rail station, where they will be reloaded with fertilizers produced at the Cherepovets site and railed to Russian ports.

“This brings the logistical capabilities of our Cherepovets complex to a whole new level,” said Guryev.

U.S. Department of Interior Proposes to Axe Potash from Critical Minerals List

Featured, News, Potash, U.S.

Potash is not on the U.S. Department of Interior’s draft list of 50 mineral commodities for inclusion on the 2021 list of critical minerals; it was on the 2018 list, which included 35 minerals. The 2018 list was in response to Executive Order 13817, a federal strategy to ensure secure and reliable supplies of critical minerals.

The strategy directed DOI to locate domestic supplies of those minerals, ensure access to information necessary for the study and production of minerals, and expedite permitting for minerals projects.

However, according to Michigan Potash & Salt Co. CEO Ted Pagano, “the new infrastructure legislation included strategic and critical minerals to encourage domestic onboarding and investment to ensure adequate domestic supply. The loss of this designation would shift any pending incentive or legislation away from the only critical mineral responsible for food security and farmer welfare. Interestingly, Canada has it on their list, and on a per capita basis, has an overwhelming supply.”

Pagano said the DOI proposal appears short-sighted and is coming at a time when product is unavailable, inflation is pressing, and food security is threatened globally. “Clearly, the oligopoly is unwilling or unable to supply our current need at a time when it is needed most, which principally includes Canada.”

Green Markets potash prices for the Great Lakes on Nov. 19 stood at $720-$750/st FOB versus the year-ago $290-$294/st FOB.

Michigan Potash & Salt, a junior project, has been in the works for some time in Evart Township in Osceola County, with the company just recently receiving its air permit from the Michigan Department of Environment, Great Lakes & Energy (EGLE). Pagano said the project has widespread support from many grower associations and union labor demonstrating a clear need, including West Michigan Building Trades, Michigan Corn Growers, Michigan Farm Bureau, Michigan Wheat Program, Michigan Agri-Business Association, Michigan Soybean Association, and Michigan Ag Commodities.

According to a Nov. 9, 2021, Federal Register notice, potash, rhenium, and strontium, which were on the 2018 list, did not meet the quantitative threshold for 2021. All three have supply risk scores just below the quantitative threshold.

“These three commodities all had very high trade exposure but low disruption potential,” said the notice. “This reflects the fact that, while the United States was highly net import reliant for all three commodities, the production of these minerals was either not highly concentrated or was concentrated in countries considered to be reliable trade partners. Any changes in the supply chain dynamics of these commodities will be closely monitored but none of the three is recommended for inclusion on the 2021 draft list of critical minerals.”

Total U.S. potash imports in fertilizer year 2021 were 10.4 million mt, with Canadian tons representing approximately 75 percent. However, the U.S. and the E.U. both have sanctions on Belarus potash producer Belaruskali, though as has been noted, that does not specify Belarusian Potash Co., (BPC) which actually markets the potash. Belaruskali reportedly owns only a minority stake (48 percent) in BPC.

Phosphates did not make it on the 2018 or 2021 lists. DOI said that while it may be an essential mineral, its supply chain vulnerability is mitigated by domestic production, lack of import dependence, and diverse, secure sources of supply. A recent trade action by The Mosaic Co., Tampa, was successful in placing duties on major phosphate producers Morocco and Russia. The case is under appeal to the U.S. Court of International Trade.

DOI is soliciting comments on the critical mineral proposals before Dec. 9, 2021. They may be submitted online at http://www.regulations.gov by entering “DOI-2021-xxxx” in the search bar, or by mail to Draft List of Critical Minerals, MS-102, U.S. Geological Survey, 12201 Sunrise Valley Drive, Reston, Va., 20192. For more information contact James Mosley at 703.648.6312 or jmosley@usgs.gov.

Heringer 3Q Income Surges on Flat Volumes; Reports Record-Breaking EBITDA

Brazil, Earnings, News, Specialty

Fertilizantes Heringer, Viana, Brazil, reported third-quarter net income of R$101.3 million, up 1,330 percent, on net revenue of R$1.31 billion, up from the year-ago R$7.1 million and R$712.2 million, respectively.

EBITDA was up 300 percent, at R$247.5 million from R$64.5 million. Heringer said it was the best EBITDA ever recorded by the company in a quarter.

Third-quarter volumes were nearly flat, up 0.4 percent to 448,886 mt from the year-ago 447,314 mt. Tonnage to the coffee crop represented the largest amount of volumes at 34 percent, down slightly from the year-ago 37 percent.

Third-quarter specialty fertilizer volumes were up 6 percent to 220,000 mt from 208,000 mt, while conventional tons were off 4 percent, to 229,000 mt from 239,000 mt.

Nine-month earnings were R$238.6 million on revenues of R$2.62 billion from the year-ago loss of R$245 million on revenues of R$1.39 billion.

EBITDA was R$467.1 million, up from R$84.8 million. The company said it was the best nine-month EBITDA and EBITDA margin ever achieved by the company.

Nine-month volumes were up 17.5 percent, to 1.06 million mt from 904,551 mt. Tons to coffee represented 29 percent of the volumes, down from the year-ago 32 percent.

Nine-month specialty tonnage was up 25 percent, to 509,000 mt from 407,000 mt, while conventional was up 11 percent, to 554,000 mt from 498,000 mt.

Heringer said it is now operating 11 of its 14 units, with active units representing 4.22 million mt/y of installed capacity and 638,000 mt in storage. Three units remain idled – Porto Alegre, Rio Grande, and Paranagua. Plants in Rosario do Catete in Sergipe and Rio Verde in Goias were the most recent to come up.

Going forward, Heringer said the fourth quarter traditionally has the highest revenues. It expects it will strongly reduce inventories and indebtedness.

Tessenderlo Boosts Guidance; Agro Credited

Europe, News, News Briefs, Specialty

Tessenderlo Group, Brussels, reported on Nov. 22 that it anticipates adjusted EBITDA for 2021 to be approximately 10 percent higher than the 2020 adjusted EBITDA (€314.6 million).

The previous outlook projected the 2021 adjusted EBITDA to be in line with the 2020 adjusted EBITDA. This revised outlook for the 2021 financial year reflects the continued favorable market conditions in the Agro segment.

Tessenderlo will announce its full results for 2021 on March 24, 2022.

Driver Killed in NH3 Truck Crash

Ammonia, News, News Briefs, Texas

The 57-year-old driver of a tractor-trailer carrying anhydrous ammonia was killed Friday, Nov. 19, in Falls County, Texas, after his vehicle struck a tree and ammonia leaked from the tank.

He was able to exit the vehicle, but was overwhelmed by the ammonia. A first responder from the Falls County Sheriff’s Office was also impacted by the leak, but was reported to have recovered at a local hospital.

Local residents in the area near the accident on Farm-to-Market Road 1240 were evacuated, and the road was closed. Ammonia was offloaded from the tank, and the scene was cleared on Monday morning, Nov. 22, according to KCENTV.

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