All Posts from October 29, 2012

Papo Maritime to raise bid price for Eilat port

News, News Briefs

Tel Aviv — Papo Maritime has agreed to raise its bid for the port of Eilat following negotiations with representatives of the Israeli Finance Ministry’s tenders committee. Papo Maritime, owned by the U.S.-based Nakash family, is the sole bidder in the tender for a 25-year concession on the port. The Finance Ministry has been attempting to get Papo Maritime to improve its $25 million bid, which was the minimum for participating in the tender. The target is $30 to $35 million. The Finance Ministry’s tenders committee, which is not obliged to accept the bid, is expected to decide within the coming weeks whether to accept it. The government has agreed to undertake – at its expense – repairs to the potash pier at the port, which are expected to cost $12 million. Papo Maritime has accepted an agreement between Israel Chemicals Ltd. (ICL) and the Eilat Port management to grant the company priority on 216 days a year for its shipments. Under the terms of the agreement, the two sides agreed that payments by ICL to Eilat Port would be on a progressive rate: $1 per ton for the first 2.5 million metric tons, $1.90 for handling of an additional 500,000 tons, and $2 per ton for each additional amount above 3 million tons a year. The amounts are over and above a flat rate of $2.15 on each ton. In the past ICL opposed the privatization of the port, fearing that it would have an adverse impact on its operations out of Eilat. Eilat is Israel’s third largest port, and has been handling an increasing share of the burgeoning trade with the Far East. ICL ships some 2.5 million tons of potash and other chemicals via the Eilat port, and the importance of the port has continued to grow in recent years as sales to the Far East increase. ICL accounts for nearly 20 percent of the port’s revenues.

Andersons buys elevators, ag centers

Breaking Industry News

The Andersons Inc. announced today it has signed an agreement to purchase a majority of the grain and agronomy assets of Green Plains Grain Company LLC, a subsidiary of Green Plains Renewable Energy, Inc. The transaction, which remains subject to certain customary closing conditions, is expected to close in the fourth quarter.

"This will be the largest acquisition in our company’s 65 year history, and will increase the storage capacity of our Grain Group by nearly 30 percent," says CEO Mike Anderson.
"This acquisition aligns with our geographic growth strategy for both our grain and plant nutrient businesses and we expect it will be accretive on a full-year basis in 2013."

The agreement involves the purchase of seven facilities in Iowa and five in Tennessee, with a combined grain storage capacity of about 32 million bushels, 12,000 tons of nutrient storage and more than 130 employees and working capital.

"This acquisition is consistent with our strategy of expanding our footprint into high grain production geographies where we can leverage our core capabilities to serve more customers in diverse trade areas. It enables us to push further to the west and south, increasing our presence in Iowa and entering Tennessee," says Denny Addis, president, Grain Group. "An additional benefit is our ability to now offer agronomy services in a combined manner with our grain business."

No problems seen for OCI permits

News, News Briefs

Wever, Iowa — Orascom Construction Industries’s plans for a $1.4 billion fertilizer plant located here are online to get a green light, at least so far, according to a state regulator. Between 100-150 interested residents overflowed the meeting room in the local library earlier this month for the single public hearing on air quality permits, and most of them were in favor of the project. According to Chris Roling, senior environmental engineer in the air quality bureau of the Iowa Department of Natural Resources, those opposed were concerned about the nitric acid plant. “All the units at the plant will be required to install best available technology," Roling said. "Specifically, the nitric acid plant will have controls that as far as I know have not been installed in the U.S.” He explained that the plant will need an individual permit for each emission, adding up to about 23 separate permits. “I am currently going through all the comments. But as long as they meet all of the state and federal requirements, they will be issued the permits. I have not seen anything at this point that would stop the issuing of the permits.”

Bunge 3Q fertilizer earnings off

News, News Briefs

White Plains, N.Y. — Bunge Ltd. said Oct. 25 that while results from its fertilizer business showed considerable improvement in the third quarter ending Sept. 30, 2012, compared to the first-half, it still trailed last year due to lower margins in its Brazil business. Currently, Bunge says the market is seasonally strong, but competitive. Third-quarter fertilizer earnings before interest and tax (EBIT) were $23 million on sales of $898 million, down from the year-ago $33 million on sales of $1.03 billion. Volumes were 1.79 million mt, down from 1.87 million mt. Nine-month EBIT was a negative $52 million on sales of $2.18 billion, compared to the year-ago positive $27 million on sales of $2.3 billion. Nine-month volumes were up, at 4.3 million mt from 4.24 million mt. Company-wide, Bunge more than doubled net income in the third quarter, to $297 million ($1.92 per diluted share) on sales of $17.3 billion, compared to the year-ago $140 million ($0.89 per share) on sales of $15.6 billion. Nine-month income, however, was lower at $663 million ($4.29 per share) on sales of $45.8 billion, versus the year-ago $688 million ($4.42 per share) on sales of $42.3 billion.

Mitsui and Sumitomo cancel plans for fert integration

News, News Briefs

Tokyo — The Japanese trading companies Mitsui & Co. Ltd. and Sumitomo Corporation announced that they have canceled an agreement to integrate their fertilizer businesses in Japan. The two companies first announced plans to explore integration in March 2012 (GM March 19, 0. 10), but reported on Oct. 24 that both had reached “a conclusion that integration would not yield the benefits that were initially anticipated.” Under terms of the basic agreement reached last spring, Mitsui and Sumitomo were considering the establishment of a new company through a joint incorporation-type company split, allowing a newly-merged company to take over the fertilizer raw materials export and import business of both companies. The two companies also planned to merge Japanese manufacturing and sales subsidiaries Summit Agri-Business Corp. and Mitsui Bussan Agro-Business Co. Ltd., and make it a wholly-owned subsidiary of the newly-merged company. A business alliance established between Mitsui and Sumitomo in March 2010 involving an overseas fertilizer raw materials import business will continue, however. The companies have also promoted cooperation in areas such as the joint allocation of vessels and logistics. It was the results achieved by this original alliance that led the two companies to explore a broader fertilizer integration.

Koch subsidiary buys Nebraska ethanol plant

News, News Briefs

Bloomington, Minn. — Ethanol producer Advanced BioEnergy LLC announced on Oct. 16 that it plans to sell its Fairmont, Neb., ethanol plant to Flint Hills Resources, an indirect, wholly-owned subsidiary of Koch Industries Inc. The transaction is expected to close later this year, and is subject to regulatory approval. The Fairmont ethanol plant has annual capacity of more than 115 million gallons and produces more than 320,000 tons of dried distillers grains each year, as well as more than 18 million pounds of non-food grade corn oil. The plant began production in October 2007, and has about 50 employees. “The announcement today underscores the value we have created over the past four years developing the Fairmont plant into a superior ethanol production asset,” said Richard Peterson, CEO of Advanced BioEnergy. “Maximizing the value of our business has been a priority in the face of continuing market consolidation and compressed operating margins as the industry works toward long-term alignment of supply and demand.” Advanced BioEnergy will continue to operate its two ethanol plants in Huron and Aberdeen, S.D., after the transaction closes. The company has current ethanol production capacity of approximately 200 million gallons/yr. “We feel very fortunate to add Advanced BioEnergy’s Fairmont plant to our biofuel business,” said Brad Razook, CEO and president of Flint Hills Resources. “This is a best-in-class operation located in one of the highest corn-producing regions in Nebraska.” Flint Hills Resources, based in Wichita, Kan., is a leading refining, chemicals, and biofuels company, with operations primarily in the Midwest, Texas, and Alaska. The company operates four Iowa ethanol plants with a combined capacity of 435 million gallons/yr, a biodiesel plant in Texas, and investments in biofuels technology and feedstock development.

Novozymes and Syngenta form biofungicide partnership

News, News Briefs

Copenhagen — Scandinavian bioinnovation company Novozymes announced on Oct. 26 that it has entered into an exclusive global marketing and distribution agreement with Syngenta for the product Taegro®, a microbial-based biofungicide developed by Novozymes to combat fungal disease for a range of crops. Financial details about the agreement were not disclosed. “This collaboration matches Syngenta’s global market strength and leading position within fungicides and integrated solutions with Novozymes’ deep know-how on sustainable, biobased technologies,” said Thomas Videbæk, executive vice president of Novozymes. “Using technology developed by Novozymes, Syngenta will provide farmers all over the world with a biological product to help sustainably combat fungal diseases in a powerful manner.” Taegro is based on the naturally occurring Bacillus subtilis bacterium, which effectively targets fungal diseases such as Rhizoctonia and Fusarium on fruit and vegetables. Its application is expected to be expanded to a wider portfolio of broad-acre crops such as wheat, soy, and corn. “We’re delighted to enter into another agreement to commercialize a Novozymes technology,” said Syngenta CEO John Atkin. “Having worldwide commercial rights for Taegro will further strengthen our ability to offer high-performing integrated crop solutions.” Under terms of the agreement, both companies will help bring Taegro to market. Syngenta will be responsible for sales, marketing, and distribution, while Novozymes will be responsible for production and registration. Taegro is currently registered in the U.S., and trials are planned to secure data for a global rollout.

Syngenta purchases Florida biotech company

News, News Briefs

Basel, Switzerland — Syngenta has announced that it has agreed to acquire Pasteuria Bioscience Inc., a Florida-based biotechnology company. Syngenta and Pasteuria have had an exclusive global technology partnership since 2011 to develop and commercialize biological products to control plant-parasitic nematodes using the naturally occurring soil bacteria Pasteuria spp. The first product will be a seed treatment for soybean cyst nematode that will be launched in the U.S. in 2014, but the companies say the acquisition will facilitate the introduction of key products across a broad variety of crops, including corn, cereals, sugar beets, and vegetables. Under the terms of the agreement, Syngenta will acquire Pasteuria for aggregate payments of $86 million, with additional deferred payments of up to $27 million. The transaction is expected to close in the fourth quarter of 2012.

Senator wants farmers to get biodigesters

News, News Briefs

Washington — A plan being spearheaded by Sen. Charles Schumer, D-N.Y., is aimed at helping dairy farmers in his state purchase biodigester facilities, which could result in a sizeable amount of fertilizer from cattle manure. He is seeking to reinstate an expired energy grant program that essentially would give farmers upfront cash to pay for up to 30 percent of biodigester facilities. At the same time, N.Y. Gov. Andrew Cuomo is working on a legislative change to enable farmers with fewer than 200 cows to increase their herd sizes up to 300 without violating the state concentrated animal feeding operations program. It all has to do with growing demand on dairy production to serve the booming Greek yogurt industry in the state. “With more cows there’s going to be more manure, and with more yogurt production there are more waste products,” Schumer pointed out. “As dairy production grows, this will reduce waste costs and increase the efficiency of dairy farms with fertilizer and electricity. It’s an absolute game-changer.” With biodigesters costing up to $7 million, he added, farmers can form joint efforts to make purchasing the equipment feasible. Called the Federal 1603 Grant Program, the energy grant funding can provide valuable startup costs to get projects off the ground. Synergy Biogas in Wyoming County, N.Y., for instance, used the program to garner a $2.4 million grant for its facility, which converts manure and waste products from local food processors into energy and generates nutrient-rich fertilizer for the dairy farm. That facility, which sells electricity on the energy grid, creates enough electricity for 1,600 homes.

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