All Posts from December 31, 2021

EuroChem IPO Not Expected in 2022

Europe, News, News Briefs

EuroChem AG has no plans for an initial public offering (IPO) in 2022, according to an Interfax report citing Russian billionaire Andrey Melnichenko, who controls the company. He explained that it is more profitable to raise capital in other ways.

The Zug, Switzerland-based company has held preliminary discussions with potential advisers about listing as soon as 2022, sources told Bloomberg earlier this month (GM Dec. 10, p. 33). The company declined to comment at the time.

EuroChem Buys Majority Stake in Fertilizantes Heringer

Brazil, Europe, Featured, News, Specialty

EuroChem Group AG, Zug, Switzerland, has announced the signing by one of its subsidiaries of an agreement to purchase a controlling 51.48 percent share in Brazilian fertilizer distributor Fertilizantes Heringer SA, Viana, further strengthening the group’s production and distribution capabilities in Brazil.

Fertilizer Heringer has 14 storage, blending, and distribution units in the southeast, midwest, south, and northeast regions. It is the country’s fourth-largest distributor in terms of installed capacity, at more than 4 million mt/y.

The transaction price was R$554.6 million (US$97.4 million), or about R$20 per share (US$3.51). Half will be due at the closing date. Once the deal is complete, tagalong rights for the remaining shareholders will come into play, and EuroChem will tender to buy their shares at the same price.

EuroChem said it may consider delisting the company as part of the tagalong offer. At last report, Nutrien Ltd. and OCP SA both owned about 10 percent of Heringer. The Heringer family controlled the 51.48 percent sold to EuroChem.

The transaction is EuroChem’s third in Brazil in the past five years. In 2020, it bought the remaining stake in Fertilizantes Tocantins (FTO) (GM Aug. 21, 2020), which distributes about 4 million mt/y of fertilizer in the country. In August, it announced the purchase of the Serra do Salitre project (GM Aug. 6, p. 1, Sept. 10, p. 1) in Minas Gerais, which will add about 1 million mt/y of phosphate production by 2024.

“This acquisition, following antitrust approval, will enable EuroChem to better serve the total market of Brazil – from north to south – even more reliably, while providing more outlets for our full product line of standard and premium fertilizers,” said EuroChem Group Global Head of Sales and Distribution Charles Bendaña.

“It will also help the EuroChem Group to achieve higher efficiency in our shipping and logistics programs in order to provide reduced costs to our customers in Brazil, as well as increased netbacks to our global production facilities,” he continued. “Taken with the recent full acquisition of Fertilizantes Tocantins SA and the ongoing purchase of the Serra do Salitre phosphates project, this move will help anchor the group as a leader both locally and abroad.”

“With Heringer joining a South America distribution base that already includes EuroChem Fertilizantes Tocantins in Brazil and EuroChem Emerger Fertilizantes in Argentina, this deal, once approved, will cement EuroChem’s reputation as the crop nutrient supplier of choice across great swathes of the continent,” said Lieven Cooreman, EuroChem FTO CEO and Head of EuroChem’s Commercial Division in South America. “This naturally gives our customers added confidence in our ability to cater to any crop on any farm in a timely manner.”

Tessenderlo to Build Plant in Ohio, Acquires European Port Assets

Eastern Cornbelt, Europe, Featured, News, Specialty, Sulfur

Tessenderlo Group, Brussels, has announced that its subsidiary, Tessenderlo Kerley Inc. (TKI), plans to construct a liquid fertilizer plant in Defiance, Ohio, serving the eastern Great Lakes region. The facility will focus on the company’s sulfur-based crop nutrition brands – Thio-Sul, KTS, and K-Row 23 – as well as sulfite chemistries for the industrial markets. The plant is expected to become operational in the first quarter of 2024.

“Our investment in this new manufacturing facility will service the local community and support the increased demand in the region,” said Russell Sides, TKI Executive Vice President. “This strategic venture not only combines excellence in process technology, but also diversifies our local market position, and strengthens our sustainability goals by bringing us closer to our customers.”

In other news, Tessenderlo Group has agreed to acquire the assets of B.V. Fleuren Tankopslag, a tank storage and transshipment company for liquid products located in the Port of Cuijk (the Netherlands). The acquisition is expected to be completed by May 1, 2022, at the latest. The company said the transaction will have no material impact on the results of Tessenderlo Group.

Once the deal is completed, the Fleuren Tankopslag operations will be integrated within its Tessenderlo Kerley International business unit, which supplies value-added liquid, soluble, and solid plant nutrition products. The company said the acquisition will further strengthen Tessenderlo Kerley International’s position in the Western European liquid fertilizer market.

It said while securing the longer-term business of Fleuren’s incumbent customers, it will also provide additional storage for Tessenderlo Kerley International’s portfolio of liquid fertilizers, including Thio-Sul, KTS, and ammonium polyphosphates.

In addition, its location by the Maas River and its close connection to the new Tessenderlo Kerley International plant that is due to be constructed in Geleen, the Netherlands (GM March 26, p. 33), will allow for easier and more sustainable connections for transport of Thio-Sul via waterways into the Netherlands, Germany, and France.

Construction works on the Geleen plant are planned to start in April 2022 and the factory is scheduled to be operational in the second quarter of 2023.

SABIC Agri-Nutrients Co. – Management Brief

Management Briefs, Saudi Arabia

SABIC Agri-Nutrients Co., Riyadh, announced its first CEO, replacing the “Company President” position, as part of its new management organizational structure, the company said in a Dec. 20 filing to Saudi Arabia’s Tadawul.

Abdulrahman Shamsaddin has been appointed CEO and will take up the position on Jan. 1, 2022. Shamsaddin has held several leadership position at SABIC, the last of which was as Executive Vice President for Shared Services.

Fahd bin Misfer Al-Battar, SABIC Agri-Nutrients Co. President since May 1, 2021 (GM March 19, p. 27) has been appointed Chief Operations Officer.

SABIC owns a 50.1 percent stake in SABIC Agri-Nutrients Co.

K+S Secures Permit Through 2027

Germany, News, News Briefs

K+S Group has secured the discharge permit from the Kassel Regional Council until the end of 2027, providing further security for the production of mineral fertilizers and high-purity salt products at its Werra and Neuhof-Ellers production sites. The current permit expires at the end of 2021.

Under the new discharge permit, the maximum annual discharge of saline wastewater permitted is reduced to 5 million cubic meters, down from the permitted 6.7 million cubic meters in 2021.

In addition, a limit value for chloride of 2,000 milligrams per litre (mg/l) will apply at the Gerstungen gauging station from Jan. 1, 2022; in 2023, this limit drops to 1,820 mg/l. For the years 2024 and 2025, the maximum permitted salt concentration is 1,700 mg/l. In 2021, the limit was 2,400 mg/l.

K+S said the new permit follows the target values set in mid-November by the Weser River Basin Community (FGG Weser) for the river management period from 2022 to 2027, and therefore is limited until the end of this period.

The company added that the goal of no longer discharging process water from potash production into the Werra River from 2028 onwards remains unchanged.

It sees in particular storage and tailings pile-covering as the two key components for ensuring environmentally compatible disposal in the Werra-Fulda potash district in the long-term, and for continuously contributing to an improvement in the water quality of the Werra and Weser Rivers.

PhosAgro Capex Up on New Projects; 2021 Production Output Up 3 Percent

News, News Briefs, Russia

PhosAgro, Moscow, plans to increase its capital expenditure in 2022 to RUB52.5 billion, excluding capitalized repairs (approximately $711 million at current exchange rates), under the draft budget approved by its Board of Directors, the group reported on Dec. 22. Planned capital expenditures for 2021, excluding capitalized repairs, was RUB31.5 billion.

“Key projects for the year ahead include the final stage of construction of a modern phosphate-based fertilizer production complex and supporting infrastructure in Volkhov, as well as expansion of our mining operations, the start of construction of a new ammonia and urea complex at Cherepovets, and an increase in production capacities at the Balakovo site,” said PhosAgro CEO Andrey Guryev in a statement.

He added that these and other projects will be included in the updated version of the group’s “Strategy to 2025,” which will be submitted to the Board of Directors next spring.

The Russian fertilizer group took the decision in November to go ahead with the new RUB120 billion ammonia and urea complex, which will have a production capacity of 1 million mt/y of ammonia and up to 1 million mt/y of urea (GM Nov. 26, p. 1). Construction is due to start in 2022, with first product expected at the end of 2025.

Meanwhile, PhosAgro expects its total finished fertilizer output to reach 10.5 million mt this year, up 3 percent over 2020’s output.

K+S & Remex Complete REKS JV Transaction

Germany, News, News Briefs

K+S Group reported on Dec. 22 that it and Germany’s Remex GmbH have completed the transaction for the new REKS waste management joint venture. Under the 50:50 jv, which will operate under the name REKS GmbH & Co. KG, the two partners aim to tap into “the attractive and strongly growing” European market for the recovery and disposal of waste, as well as the implementation of sustainable waste management solutions.

The German Federal Cartel Office, Bundeskartellamt, gave final clearance for the merger – following the fulfillment of certain conditions – on Dec. 1 (GM Dec. 3, p. 27).

As a result of the contribution of the K+S stakes to REKS, K+S said previously it will generate a one-off gain of about €200 million in the fourth quarter of 2021. At the same time, it expects a total cash inflow of about €90 million before taxes to be generated).

K+S and Remex, which is owned by Germany’s Rethmann Group, reached an agreement in December 2020 to partner up to bundle their respective waste management activities in a new jv (GM Dec. 31, 2020).

Incitec Pivot to Scale-Up Tech Grade Urea Production for AdBlue

Australia, Featured, News, Urea

Incitec Pivot Ltd. (IPL), Southbank, said it is working closely with Australia’s Federal Government to undertake a manufacturing assessment to produce technical grade urea and expand AdBlue production at its Gibson Island plant in Brisbane.

The group has mobilized “expert teams” to work on expanding manufacturing capability and increase the country’s supply of AdBlue, according to a Dec. 20 company statement.

IPL currently supplies around 10 percent of the Australian market for AdBlue solution and is the only Australian manufacturer to make the solution from urea melt. The company said earlier this month it was investigating ways it could increase manufacturing capacity of the urea used to make AdBlue (GM Dec. 10, p. 29).

Australia is facing a domestic supply crunch for AdBlue solution that is threatening to bring the country’s transport industry to a halt. The country has been turning to the international market to try and alleviate some of the deficit (GM Dec. 17, p. 17). Australia is heavily reliant on diesel trucks, which use the product as an additive to reduce levels of nitrogen oxides (NOx) pollution from their engines.

Around 90 percent of the Australian AdBlue market is reliant on imports of technical grade urea. China typically supplies around 80 percent of that urea, but supply has dried up since China imposed restrictions on its urea exports.

Worries about the current AdBlue supply shortages in the country have been compounded by the impending closure of IPL’s Gibson Island plant at Brisbane at the end of next year (GM Nov. 12, p. 1).

IPL said its plans to expand technical grade urea production will not impact its supply of fertilizer-grade urea to Australia’s agricultural sector.

Poland’s Anwil and Tecnimont Agree on New Deadline for Nitrogen Plant

Europe, News, News Briefs, Poland

Polish fertilizers and chemicals company Anwil SA and Milan-based Tecnimont SpA have inked a Memorandum of Understanding (MOU) providing for the preparation of an “Annex to the Agreement” the two parties signed on June 28, 2019, Polish oil refiner and petrol retailer PKN Orlen SA said in a Dec. 20 statement.

The original agreement was for the design, deliveries, and building “in turn key” formula of a new nitrogen granulation unit at Anwil’s existing production site in Włocławek, in central Poland, said PKN Orlen, which owns 100 percent of Anwil’s registered capital (GM July 3, 2019).

It said the main provisions of the MOU that will be finally implemented in the Annex to the Agreement, caused the change of the date of finalizing the building of the granulation unit for the end of 2022, and its start-up by the end of January 2023. The original schedule was for a mid-2022 completion.

Under the original plan, the granulation unit was to have an average production capacity of about 1,500 mt/d, depending on the type of fertilizer. Once commissioned, the new facility would boost Anwil’s production capacity to 1.461 million mt/y, m from the current 966,000 mt/y.

The implementation of the MOU provisions to the Annex to the Agreement remains subject to certain corporate approvals by Anwil.

PKN Orlen said the disclosure of this inside information regarding the new deadline for the finalization of the investment was delayed on Nov. 16.

NeuAG Responds to APF Lawsuit, Says “Nothing Improper About Competition”

Ammonium Sulfate, News, News Briefs, Texas

NeuAG LLC, The Woodlands, Texas, has strongly denied claims made by American Plant Food Corp. (APF), Galena, Texas, in a Property-Other Property Fraud lawsuit filed in Harris, Texas, in November (GM Dec. 3, p. 30). APF alleged that NeuAG had stolen trade secrets, including its ammonium sulfate contract with BASF, APF’s customer list, APF’s third-party truck driver list, and APF’s plan for a facility in Freeport, Texas.

“When APF filed this case, they also filed for a Temporary Restraining Order; that request was rejected by the Judge in no uncertain terms,” a NeuAG attorney told Green Markets. “In fact, that Judge told APF’s lawyers that on the record before him he did not think that APF had any trade secrets at all. More fundamentally, despite what APF alleges, NeuAG did not steal anything from APF.

“What is really going on here is that BASF chose NeuAg as their contracting partner over APF, and as much as APF might wish things were otherwise, there is nothing improper about competition,” he added.

He said there will be a second hearing on this matter in early 2022, and his side is confident that it will be successful there, as well as in the overall case.

APF had a contract to buy ammonium sulfate from BASF’s Freeport, Texas, plant since 1967. In 2020, BASF opted to instead contract with NeuAG (GM May 15, 2020), effective Nov. 1, 2021. NeuAG CEO Jerry Newcomb is a former President and CEO of APF. Newcomb and APF did not part on good terms; an APF lawsuit ensued and was later settled in 2018 (GM May 22, 2020).

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