All Posts from March 26, 2012

Israel Chemicals Ltd. (ICL) – Management Brief

Management Briefs

Israel Chemicals Ltd. (ICL) has made a number of management appointments in light of executive retirement plans. Mr. Yossi Shahar, 63, executive vice president, corporate development, since 2008, plans to retired March 31, 2012, while Nathan Dreyfuss, 60, vice president, finance, since 1994, plans to step down April 30, 2012.

Shahar will be replaced by Mr. Avi Doitchman, currently executive vice president and CFO, who will be appointed executive vice president, CFO and strategy, and will be responsible for corporate development, strategy and regulatory affairs. Doitchman will be assisted by ICL’s current controller, Mr. Amir Benita, 38, who will be promoted to the position of vice president, accounting; by Mr. Hezi Israel, 44, who will be promoted to the position of vice president, business development and strategy; and by Mr. Yakir Menashe, Adv., 40, who will be promoted to the new position of vice president, regulatory affairs and compliance. The latter is a new position that will be responsible for all of the company’s activities related to global regulations and enforcement issues, both in Israel and throughout the world.

Menashe has served as assistant to the CEO for the past six years. He holds a B.A. in Law from the College of Management, and worked previously for the law firm Efrati Galili and Partners, where he specialized in securities law, transactions, and mergers and acquisitions.

Most recently, Israel has served for the past five years as vice president, strategy and business development, for ICP Products Inc. He holds an M.B.A. from Tel Aviv University and a B.A. in Economics and Political Science from Tel Aviv University.

Benita has served during the past five years as ICL’s controller. Previously, from 2001-2009, he served as a lecturer for the College of Management, and as a senior manager for the Ernst & Young accounting firm. He is a CPA and holds a B.A. in Business Management from the College of Management.

Dreyfuss will be replaced by Michael Hazzan, 46, who will be promoted to the position of vice president, finance. Hazzan, a CPA, has worked in ICL’s finance department for 18 years, including five as the company’s group treasurer. He holds a B.A. in Economics from Tel Aviv University and an M.A. in Economics from Bar Ilan University.

Israel considers new ammonia plant

Ammonia, Israel, News, News Briefs

Tel Aviv — Israel’s Industry and Trade Ministry has issued a request for information from Israeli and international companies on setting up an ammonia plant in southern Israel. The request is part of an effort by the ministry to speed up the removal of the Haifa Chemicals ammonia storage facility in Haifa. The request notes that the proposed plant would use natural gas from Israeli offshore fields. The ministry is looking to shut down an existing storage facility for imports as soon as possible, and has asked for information from interested parties to establish a production plant based on local natural gas supplies. Israeli demand for ammonia is 120,000 mt/y, and more than 90 percent goes to the local fertilizer industry. Israel currently imports all of its ammonia needs. Earlier this month, the country’s Industry and Trade and Environmental Protection Ministers agreed to move the current ammonia storage facility from its location in Haifa to the south. The facility is owned and operated by Haifa Chemicals, and is located in the Haifa Bay industrial zone in close proximity to population centers. The existing facility stores 12,000 mt, and there has been strong opposition to its location in a metropolitan area from environmental groups and the Haifa Municipality. There has been a growing movement supporting the closure of the facility, and the municipality actually went to court to get it moved. A Haifa court put off a decision on the matter until May. Environmental and security experts warned in recent years of the potential hazards of the facility to the nearby civilian population. A commission appointed in 2006 recommended improving the protection of the facility and the banning of the entry of vessels transporting ammonia into Haifa port during war time. In 2010 a team of experts from government ministries and private consulting firms studied various alternatives and found that the facility was well protected by international standards, but was located closer to population centers than is customary The team recommended that an ammonia production plant be set up that would supply the needs of the local fertilizer and other industries. Officials at the Environmental Protection and Industry and Trade Ministries said that the determining factor was the fear of missile attacks in the Haifa region, and that was the main reason for the decision to shut the facility down and find an alternative location. Late last year Ratio Oil Exploration said it was considering building an ammonia plant in the northern Negev region that would use natural gas from the huge offshore discoveries. Ratio is a partner in the Leviathan offshore field, which was discovered in December 2010. The field has estimated reserves of 20 trillion cubic feet. The cost of the plant is put at $500 million and would be able to meet all domestic needs and export as well.

Strict new Maryland nutrient regs on hold; ag interests say they pose a threat to industry

News

Maryland officials apparently aren’t in any hurry to adopt strict new statewide nutrient management regulations that were met with strong opposition from agriculture interests, who fear the changes would lower yields for crop farmers and take thousands of acres out of production for livestock operators.

“They’re on hold at least until after the state general assembly ends its session next month,” Maryland Department of Agriculture (MDA) spokeswoman Julie Oberg told Green Markets. “Gov. Martin O’Malley has had his scientific advisory committee reviewing the proposals and will be discussing them with his BayStat cabinet.” Oberg said there is no set timeframe for adopting what she described as changes that would make the regulations more effective at protecting water quality and easy to implement, adding that it was unlikely that new regulations would be out in the near future.

Meanwhile, critics, including the Maryland Farm Bureau, have been very vocal. “We are sincerely disappointed at the direction that is being taken, which will turn our site-specific farm management tool into a one-size-fits-all prescription for farming,” Farm Bureau President Patricia Langenfelder wrote O’Malley. Langenfelder warned that one stipulation could result in the costly removal of thousands of acres from production because “fencing every mile of stream that meanders through a pasture is not economically feasible and constitutes a ‘taking’ of agricultural land without compensation.

“Frankly,” the letter continued, “it appears to the farm community that the most recent proposal to change nutrient management guidelines is designed to simply ‘check off boxes’ in the state’s TMDL requirements rather than as reasonable, economically feasible, practices that take into consideration the varying factors on each farm in the state.” Langenfelder said farmers are frustrated by the whittling away of their ability to make farm-specific decisions while meeting nutrient reduction goals, adding that the speed at which Maryland is placing mandates and restricting farm practices makes it impossible for good scientific research and cost/benefit analysis to be conducted.

The changes causing these concerns involve defining additional management practices that may be required related to crop production; the storage and handling of organic sources of nutrients; prohibiting the application of organic sources of nutrients in winter months; setback requirements for the application of crop nutrients, including fencing for livestock; and new guidance for the use of soil amendments and soil conditioners on agricultural land.

Langenfelder reminded the governor of a pledge in the summer of 2010 not to put Maryland farmers at a disadvantage compared to growers in other states. “I can assure you this proposal will do exactly that,” she said. “We are calling upon you now to uphold your pledge.”

The proposed regulations, finalized this past summer, were the result of almost two years of an interactive process involving a broad-based group, said MDA Assistant Secretary Royden Powell. MDA had planned to publish the proposed changes Dec. 2 in the Maryland Register, but MDA spokeswoman Oberg reported that objections from both sides of the issue have delayed that date.

4Rs part of Ohio basin nutrient reduction plan

Eastern Cornbelt, Midwest, News, News Briefs

Columbus, Ohio — Officials from the Ohio Department of Agriculture, the Ohio Department of Natural Resources, and the Ohio Environmental Protection Agency (OEPA) have finalized a plan to reduce excess agriculture nutrients from affecting or entering the western basin of Lake Erie by adopting the fertilizer industry’s 4R Nutrient Stewardship program (the right fertilizer source at the right rate, the right time, and in the right place). The program was first announced in October 2011 (GM Oct. 24, 2011). OEPA Director Scott Nally said Ohio’s agricultural community is “not being singled out,” but stressed that “fertilizer is a contributing source to the problem” and action was needed on the part of the agriculture community as a result. “Our agencies worked with Ohio’s agricultural community to identify the best ways to decrease this nutrient loading into Ohio’s water bodies,” said Ohio Department of Agriculture Director David Daniels. “The farmers, private companies, agricultural organizations, agri-businesses, environmental organizations, and academic institutions were all asked to provide their best input, ideas, advice and guidance. That was the foundation for developing these initial recommendations.” In addition to endorsing the 4Rs developed and promoted by The Fertilizer Institute, the agencies are calling for a voluntary statewide “Certified Nutrient Stewardship Program” for farmers, giving the Department of Agriculture authority to better train Ohio farmers about applying commercial fertilizer, expanding the regulatory authority of the department to collect more specific geographical data on where fertilizer sales are currently made, clarifying the authority of Natural Resources to aggressively pursue habitual bad actors, and expanding the department’s authority to development nutrient management plans. In addition to continuing to stress the use of the 4R nutrient management methodology, the division of soil and water resources will be tasked with coordinating an extensive education and outreach effort, as well as developing a roadmap for implementing the other policy recommendations. The three agencies also agreed to utilize a three-tiered, statewide structure for prioritizing the implementation of any recommendations, based upon the condition of any given watershed in Ohio. “There is no question that there are a variety of factors that are contributing to the increased frequency of harmful algal blooms in Lake Erie, and many of Ohio’s other streams and water resources,” said OEPA Director Nally.

Enviros sue EPA over Dead Zone inaction

News, News Briefs, U.S. Gulf

New Orleans — In two separate legal actions, environmental groups are challenging what they claim is the U.S. Environmental Protection Agency’s (EPA) refusal to address nitrogen and phosphorus pollution that is stimulating excessive growth of algae, which severely depletes oxygen levels and chokes off marine life in the Gulf of Mexico and other aquatic ecosystems. “The ecology and economy of the Gulf of Mexico have paid the price for EPA’s endless dithering about Dead Zone pollution,” said Matt Rota, director of science and water policy with the non-profit Gulf Restoration Network. “The most meaningful action the EPA can take is to set limits on the amount of these pollutants allowed in the Mississippi River watershed so that the fish and the fisheries can recover.” As members of the Mississippi River Collaborative represented by the Natural Resources Defense Council, these interests are challenging EPA’s denial of a 2008 petition to the agency asking EPA to establish quantifiable standards and clean up plans for Dead Zone pollution. Separately, several conservation groups are seeking to compel EPA to finally respond to an even older petition – a 2007 request that EPA modernize its decades-old pollution standards for sewage treatment plants and include the Dead Zone pollutants nitrogen and phosphorus in those standards. “Decisive EPA action on Dead Zone pollutants is a decade overdue,” said Glynnis Collins, executive director of the Illinois-based Prairie Rivers Network. “Illinois is the biggest contributor of pollution that creates this yearly crisis. With little action coming from the state, we clearly need an external push to be a more responsible neighbor.” There was no comment from EPA. Robin Craig, an environmental law expert at Florida State University College of Law, said nutrient pollution is “definitely on EPA’s radar as the next step forward in implementing water quality protection.”

Senate transportation bill clarifies HOS exemption

News, News Briefs

Washington — The Agricultural Retailers Association (ARA), the Agricultural and Food Transporters Conference (AFTC) of the American Trucking Associations, the National Council of Farmer Cooperatives (NCFC), and The Fertilizer Institute (TFI) applauded the U.S. Senate’s passage on March 14 of the Surface Transportation bill. The bill included an amendment introduced by Sens. Amy Klobuchar (D-Minn.) and Pat Roberts (R-Kan.) and co-sponsored by Sens. Claire McCaskill (D-Mo.), Ben Nelson (D-Neb.), Mike Johanns (R-Neb.), and Richard Lugar (R-Ind.) that resolves questions regarding the applicability of the agricultural hours of service (HOS) exemption. Specifically, the legislation clarifies that the agricultural HOS exemption is applicable to drivers transporting agricultural commodities within a 100 air-mile radius; drivers transporting farm supplies for agricultural purposes from a wholesale or retail business to a farm or other location where the farm supplies are intended to be used within a 100 air-mile radius from the distribution point; or drivers transporting farm supplies from a wholesale location to a retail location so long as the transportation is within a 100 air-mile radius. “We appreciate the leadership demonstrated by Senators Klobuchar and Roberts through their introduction of this important amendment to the Surface Transportation Bill,” said Daren Coppock, ARA president and CEO. “The Senate’s passage of this legislation helps ensure that agricultural retailers are able to supply farmers with the products they need in an efficient manner during critical times of the year.” Added TFI President Ford B. West, “TFI is very pleased with the passage of this important legislation and we are grateful for the efforts of Senators Klobuchar, Roberts, and others who offered their support of the agricultural hours of service exemption. We hope the House will work quickly to pass similar legislation.”

Rentech details East Dubuque expansion project

Ammonia, Midwest, News, News Briefs

East Dubuque, Ill. — Rentech Nitrogen Partners LP reported that the ammonia capacity expansion project currently underway at its East Dubuque plant remains within budget and on schedule, to be completed by the end of 2013. The project is designed to increase ammonia production capacity by approximately 23 percent, or 70,000 st annually, and includes the addition of a 20,000 st ammonia storage tank. The expansion will bring Rentech’s annual ammonia production capacity to approximately 370,000 st, and will increase on-site ammonia storage capacity to 60,000 st. Rentech also has access to 15,000 tons of leased ammonia storage in Niota, Ill. The additional ammonia production is expected to be sold primarily as ammonia, but could also be available for upgrade to other products. Rentech said it continues to expect the expansion project to generate a return of greater than 20 percent, given current expectations for pricing of products and costs of natural gas. In February, Rentech secured a $100 million multiple draw term loan to finance the entire projected cost of the ammonia production and storage capacity expansion. GE Capital served as administrative agent and GE Capital Markets served as sole lead arranger and book-runner on the financing, which also included a $35 million working capital credit facility. Simultaneously with the closing of the capital expenditures facility and the working capital facility, Rentech Nitrogen terminated the bridge loan facility provided by parent company Rentech, Inc., that was put in place in December 2011. The company has drawn approximately $8.5 million on the capital expenditures facility to repay the outstanding principal under the bridge loan facility and to pay fees associated with the new credit facility.

Higher sales prices boost RentechÆs profits

Ammonia, California, Midwest, News, News Briefs, UAN, Urea

Los Angeles — Fueled by higher sales prices, Rentech Nitrogen Partners LP, which manufactures and sells ammonia, UAN, and urea at its plant in East Dubuque, Ill., reported net income of $10.5 million for the quarter ended Dec. 31, 2011, more than double the $4.3 million in net income reported in the prior year quarter. The company generated operating income of $22.6 million and EBITDA of $25.9 million for the 2011 quarter, compared with $14.6 million and $17.2 million, respectively, in the prior year. The reduced EBITDA was attributed to a scheduled biannual plant turnaround at East Dubuque in the fall of 2011, which included roughly 15.5 days of plant downtime in October 2011. Revenues for the latest quarter were $63 million, compared with $43 million for the comparable period in the prior year. Higher sales prices in 2011 also boosted the company’s gross profit margin on product shipments to 46 percent for the period, up from 38 percent in the 2010 quarter. “Rentech Nitrogen reported exceptional results, which benefitted from strong product pricing,” said D. Hunt Ramsbottom, Rentech CEO. “We continue to see robust fundamentals driving nitrogen demand, especially in our core market of the Mid Corn Belt region. We expect natural gas prices to remain at low levels, which will continue to positively impact product margins.” Ramsbottom said the company implemented several production efficiency-related improvements at the plant during the October turnaround, which resulted in record production rates and lower natural gas usage. Rentech produced 63,000 st of ammonia during the latest quarter, of which 30,000 st was available for sale as ammonia, 28,000 st was upgraded into UAN, and 5,000 st was upgraded into other nitrogen products. Average prices for ammonia and UAN during the quarter were $684/st and $307/st, respectively, compared to $512/st and $193/st, respectively, for the comparable period in the prior year. Rentech delivered 55,000 st of ammonia, 65,000 st of UAN, and 10,000 st of other nitrogen products during the quarter, compared with 44,000 st, 79,000 st, and 10,000 st, respectively, during the comparable period in the prior year. Rentech said it has secured strong product pricing in its spring forward sales book. Product prices have strengthened recently, it noted, and the company anticipates further nitrogen price appreciation as the spring season develops. Rentech noted that its board of directors has approved a change of the company’s fiscal year-end to Dec. 31 from Sept. 30. With this change, Rentech’s 2012 fiscal year began on Jan. 1, 2012, and will end on Dec. 31, 2012.

Ameropa completes deal for Romanian producer

Eastern Europe, News, News Briefs, Northwestern Europe

Binningen, Switzerland — Ameropa Holding AG, the Swiss-based international grain and fertilizer trader, has finalized a transaction to take an indirect majority stake in Romanian fertilizer producer Azomures SA, according to a March 22 statement from Azomures. In an agreement that was signed last November, Pelican Fertilizers GmbH, a unit of Ameropa, acquired a 75.88 percent stake in Azomures, which is directly held by Eurofert Investments LLC and Azomures Holdings LLC. Financial details of the transaction were not disclosed.

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