All Posts from March 24, 2014

K+S Kali GmbH – Management Brief

Management Briefs

K+S Kali GmbH, Kassel, has appointed Alexa Hergenröther, 43, as a member of the company’s executive management team, effective June 1, 2014. She will be responsible for marketing and sales. Her term of office will last until May 31, 2019. She succeeds Dr. Ernst Andres, who tendered his resignation by mutual consent, effective March 31.

Hergenröther was most recently CEO of K+S Chile SA. She has been with the K+S Group since 2002 and played an important part in the acquisitions of Morton Salt and Potash One. Until her term of office starts, Dr. Ralf Diekmann will serve as acting head of marketing and sales.

Chief Human Resources Officer Steffen Kirchhof will tender his resignation for personal reasons, effective June 30. His successor will be announced later.

The term of office for Dr. Diekmann was extended until Dec. 31, 2015, and he will remain responsible for production and technology.

Trial set for case involving U.S. Nitrogen approval process

News, News Briefs

Greeneville, Tenn. — A trial involving U.S. Nitrogen LLC’s fast-track approval by local governmental entities has been set for three days starting Oct. 22, 2014, instead of in March as originally planned (GM March 10, p. 11, GM March 17, p. 13), according to the local Greeneville Sun. Plaintiffs allege that the local Greene County government, the Greene County Commission, Greene County Zoning Board, and Greene County Partnership (GCP) unlawfully and unconstitutionally fast-tracked the approval process for the $220 million U.S. Nitrogen plant in violation of the Tennessee Open Meetings Act. The GCP, which functions as a local development board, continues to seeking dismissal from the case, saying that it is not a government agency. In the meantime, plaintiffs have filed for discovery of information leading up to the 2011 approval. U.S. Nitrogen is not a party to the case. The nearly completed plant is expected to be in operation later this year.

Indiana now a K hub; large warehouse expected by 2016

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Hammond, Ind. — Potash Corp. of Saskatchewan Inc. expects its large potash transfer facility here (GM May 20, 2013, p.11) to include a 150,000 mt potash storage facility by 2016. For now, PotashCorp Chief Operating Officer David Delaney told a J.P. Morgan conference that the facility can currently place numerous unit trade loads of potash at the facility awaiting just-in-time orders. “It’s good to be able to start that origination point from Hammond, Ind., versus Saskatchewan.” Add to that, said Delaney, some 150 terminals in PotashCorp’s system. Delaney said he is expecting a later spring, but feels the company is set to meet demand for all nutrient products.

CHS N.D. plant valued at $2.04 billion

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Spiritwood, N.D. — CHS Inc. and the Stutsman County Commission have valued CHS’s proposed nitrogen plant for Spiritwood at $2.04 billion, according to the Jamestown Sun. The value for actual taxation is $1.33 billion. Some $701 million worth of machinery and equipment are not taxable in the county, according to the Sun. The valuations were a basis for CHS and the local entities to proceed for tax exemption discussions. Back when the plans for the plant were first floated (GM Sept. 17, 2012, p. 1), the cost was put between $1.1-$1.4 billion, but cost projections have steadily progressed to $1.5-$1.8 billion and now over $2 billion. As initially planned, the plant would produce ammonia, urea, and UAN. The local tax director informed the commission that the CHS board is expected to make a final decision on the plant in April or May. CHS had not responded to inquiries at press time.

H.J. Baker completes upgrade to Atmore facility

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Westport, Conn. — H.J. Baker announced on March 17 that the company is now operating a third specially customized rotoformer production belt at its Atmore, Ala., fertilizer plant. H.J. Baker said this upgrade will enable the facility to significantly increase production of its Tiger-Sul products and meet customer demand during critical peak seasons. “This new customized production belt is part of H.J Baker’s ongoing capital improvement plan at our Atmore facility,” said CEO Christopher Smith. “It is another clear example of H.J. Baker’s continued commitment to innovate using the latest technology and to ensure our facilities meet and exceed today’s market demands.” H.J. Baker said the new rotoformer went through a customized refurbishment that included both Sandvik and Berndorf technologies, as well as the addition of other features to allow employees to customize its mechanics based on individual customer needs. “The belt will give our facility an overall 50 percent increase in production capacity to better serve our customers during increased seasonal volumes,” said Atmore Plant Manager Matt Kimes. “Our employees can influence and customize the direction of the belt and make changes to meet specific customer requests.” H.J. Baker’s Atmore facility manufactures Tiger-Sul’s sulfur bentonite fertilizer products, including boron, iron, zinc, and magnesium, which are specifically formulated for row crops in the southeastern U.S., including corn, cotton, soybeans, and peanuts. The facility also manufactures fertilizer for specialty crops such as citrus, vegetables, sugar cane, blueberries, and forage and turf grass. The plant was recently upgraded, adding a 1,500-ton molten sulfur storage tank. “Customer demand for our fertilizer products is growing throughout the country and around the globe,” said Smith. “In addition to the Atmore upgrades, we recently purchased a production facility in Irricana, Alberta, which will be operating soon. This will increase manufacturing capacity to address customer needs domestically and internationally, and add capabilities such as sulfur forming in the future.”

CF completes sale of phosphate business to Mosaic

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Deerfield, Ill. — CF Industries Holdings Inc. announced on March 17 that it has completed the sale of its phosphate business to The Mosaic Co. for $1.4 billion, or approximately $1 billion net of taxes and other adjustments. The sale follows the terms of the definitive agreement announced on Oct. 28, 2013 (GM Nov. 4, 2013). “We are pleased to have completed the sale of our phosphate operations to Mosaic,” said Tony Will, CF president and CEO. “The net proceeds from the sale will be redeployed to execute the strategic initiatives we already have in progress, namely our nitrogen capacity expansions and completing our share repurchase authorization. Additionally, the supply agreements we have put in place with Mosaic will provide us a steady base of ammonia demand with attractive economics.” In conjunction with the close of the sale transaction, CF will begin to supply Mosaic with its share of the ammonia produced by the company’s 50 percent-owned production facility in the Republic of Trinidad and Tobago. Additionally, CF has a long-term supply agreement with Mosaic to supply 600,000-800,000 tons of ammonia per year for up to 15 years from its Donaldsonville, La., nitrogen complex. Deliveries of ammonia will begin no later than Jan. 1, 2017, and will be priced at a defined margin over the cost of natural gas at Donaldsonville.

Rentech activist shareholders seek special meeting

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Newport Beach, Calif. — Concerned Rentech Shareholders (CRS), a group led by Engaged Capital LLC and Lone Star Value Management LLC, together one of the largest stockholders of Rentech Inc. (RTK), said March 20 that they intend to solicit fellow shareholders of RTK for written requests to call a special meeting of shareholders to amend the company’s charter. The amendment seeks to require the company to obtain the approval of shareholders prior to issuing dilutive equity or equity-linked securities greater than 5 percent of the outstanding shares of the company, except in limited circumstances such as a public offering. "It appears the board and management of RTK are planning a dilutive capital raise against, we believe, strong shareholder opposition. It is clear to us that management and the board are acting contrary to the shareholders’ interests and further disenfranchising shareholders and entrenching themselves,” said Glenn Welling, chief investment officer of Engaged Capital. CRS said the written support of shareholders who own at least 10 percent of the issued and outstanding shares of the company is required in order to call a special meeting of shareholders to consider the amendment proposal. Once this special meeting is called, CRS plans to send proxy materials to shareholders soliciting votes in favor of the amendment proposal as described in the solicitation statement. CRS released a letter March 17 citing RTK’s March 11 conference call, in which RTK said it may need to spend $100 million on its wood business prior to making an initial public offering. Also, RTK referenced possible $600 million in additional investments. CRS is fearful RTK will initiate these activities prior to an annual shareholders meeting. RTK expressed its concerns in a February letter as well (GM Feb. 17, p. 11). RTK had not responded to inquiries at press time.

LSB to spend millions to satisfy EPA

News, News Briefs

Washington — LSB Industries Inc., Oklahoma City, the largest merchant manufacturer of concentrated nitric acid in North America, and four of its subsidiaries have agreed to reduce emissions of nitrogen oxides (NOx) by meeting emission limits that are among the nation’s lowest for the industry at plants in Alabama, Arkansas, Oklahoma, and Texas, the U.S. Environmental Protection Agency (EPA) and Department of Justice have announced. EPA estimates that the settlement measures will cut NOx emissions by more than 800 st/y, directly benefitting surrounding communities, which include low-income and minority populations living near the Arkansas and Texas plants. LSB estimates it will cost $6.3-$11.7 million to implement the measures. LSB and its subsidiaries will also pay a total penalty of $725,000 to resolve alleged violations of the Clean Air Act and applicable Oklahoma state law. In addition to the penalty, the companies must continuously monitor emissions and make any necessary operational improvements, such as installing new pollution controls or upgrading current controls to meet the new NOx limits. The settlement applies to the ten nitric acid manufacturing plants owned or operated by the following Oklahoma City-based LSB subsidiaries: El Dorado Chemical Co., in El Dorado, Ark. (four plants); Cherokee Nitrogen Co. in Cherokee, Ala. (two plants); El Dorado Nitrogen Co. in Pryor, Okla. (three plants); and El Dorado Nitrogen Co. in Baytown, Texas (one plant). The complaint, filed concurrently with the settlement, alleges that the Cherokee, El Dorado, and Pryor subsidiaries constructed or made modifications to their plants that resulted in increased emissions of NOx without first obtaining pre-construction permits and installing pollution controls. The complaint does not allege any violations regarding the Texas facility. The companies have also agreed to spend $150,000 to remediate and reforest ten acres of land with acidified soils located near El Dorado, Ark. The States of Oklahoma and Alabama are co-plaintiffs and will receive a portion of the total penalty, with $206,250 for the Oklahoma Department of Environmental Quality, and $156,250 to the Alabama Department of Environmental Management.

Mosaic details MicroEssentials expansion

News, News Briefs

Plymouth, Minn. — The Mosaic Co. recently announced that it will spend some $225 million to expand MicroEssentials capacity from 2.3 million mt to 3.5 million mt by 2017. Mosaic says the DAP product, which is embedded with micronutrients, has allowed it to de-commoditize its portfolio. Mosaic put the MicroEssentials net margins over $40/mt relative to DAP and MAP. Mosaic said it set a new MicroEssentials sales record in fourth-quarter 2013, and that for full-year 2013 sales grew 22 percent over 2012. It said it invoiced over 1 million mt of the product in North America in 2013. Mosaic also sells MicroEssentials S9, specifically developed for Brazil; MicroEssentials S5, which is focused on grain; and Nexfos, a feed phosphate, and is developing a MicroEssential-type potash product called Aspire. Aspire has undergone a few years of field trials and has had its first small production run, and will be available at select dealers this spring. In the meantime, a complicated patent infringement suit brought against Mosaic over MicroEssentials by Specialty Fertilizer Products (SFP), Leawood, Kan., in 2009, continues to linger in the court system (GM April 23, 2012, p. 13), according to Mosaic. SFP had not responded to inquiries at press time.

Israel Corp. may sell percentage of ICL

News, News Briefs

Tel Aviv — Israel Corp. is considering the sale of up to 7 percent of its stake in Israel Chemicals Ltd. (ICL) as part of a planned offering on the New York Stock Exchange. The holding company, which holds a majority interest in ICL, said it was considering the sale of shares to an international financial company, which would then sell or distribute them, sell them directly, or a combination of both options. The Israel Corp. board of directors instructed management to proceed with plans for such a sale. Israel Corp. holds a 52.3 percent stake in ICL. ICL shares current trade only the Tel Aviv Stock Exchange. The value of the 7 percent is currently around $760 million. "The purpose of the deal is to increase the flexibility of the company’s capital structure and create the necessary infrastructure, and reduce the company’s net debt," Israel Corp. said. The holding company added that it considers its holdings in ICL as a strategic investment. Israel Corp. said if the deal is consummated it would take place during 2014. However, the company said that the board had not yet decided on a deal, its structure, or the exact number of ICL shares to be offered, and there is no assurance that the deal will in fact be completed. The latest moves comes as the holding company is trying to reduce its overall debt due to losses at two of its other holdings: Bazan Group (refinery and petrochemicals) and Zim Israel Navigation Co. In addition, it is also part of a plan announced last year to split Israel Corp. into two separate entities, one that would continue to hold stakes in ICL and Bazan, and a new company that would own Zim, Coros, Tower Semiconductor, and IC Power. Israel Corp has a debt of $1.4 billion to Israeli and foreign financial institutions as of the end of the third quarter of 2013.

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