All Posts from January 7, 2022

Ammonium Sulfate

Ammonium Sulfate, Brazil, China, Eastern Canada, Eastern Cornbelt, Market Watch, Northeast, Northern Plains, U.S. Gulf, Western Cornbelt

U.S. Gulf:

TheNOLA barge market was described as quiet, with the most recent business reported in the $525-$550/st FOB range, despite higher inland postings released by AdvanSix.

Eastern Cornbelt:

Although there were reports of granular ammonium sulfate offers on the table for as low as $550/st FOB Ottawa, Ill., most sources quoted the market firmly in the upper-$500s to low-$600s, with Cincinnati pricing reported solidly at $590/st FOB.

Michigan sources pegged the market at $615/st FOB terminals for January-March tons and up to $635/st FOB for Q2 offers.

AdvanSix on Jan. 6 raised its prices for granular ammonium sulfate by $30/st, with new postings at river warehouses firming to $615-$620/st FOB and inland warehouses priced at traditional premiums to river warehouses. The company said availability is limited.

Western Cornbelt:

Ammonium sulfate pricing in the Western Cornbelt was pegged at $575-$615/st FOB in early January, with the high reflecting new river terminal postings from AdvanSix on Jan. 6.

Northern Plains:

Granular ammonium sulfate prices firmed to $610-$615/st FOB St. Paul, with delivered pricing in North Dakota pegged at $610/st for 1Q tons and up to $635/st DEL for 2Q shipments.

Northeast:

The granular ammonium sulfate market was quoted at a firm $575/st FOB Lancaster at midweek. AdvanSix on Jan. 6 announced a $30/st increase for granular ammonium sulfate, with new reference pricing firming to $550/st FOB Hopewell, Va.

Eastern Canada:

Sources reported a firming ammonium sulfate market in Eastern Canada, with prices quoted at C$745-$850/mt FOB in the region in early January, up considerably from the last reported C$690-$770/mt FOB range.

China:

Even with limited production, producers are pushing to clear out their stockpiles before the Lunar New Year starts on Feb. 1. This seems to have pushed prices down to $365-$380/mt FOB for caprolactam ammonium sulfate.

Prices could see a rebound in February, because much of the production that turns out amsul as a byproduct will be closed for the Lunar New Year celebrations, and then again as part of the Chinese government’s efforts to limit air pollution during the Winter Olympics games.

Brazil:

Sources reported a one-off deal that dropped the low end of the landed price to $450/mt CFR. Other deals showed pricing closer to $500/mt CFR. The price shift, said sources, was in line with a general feeling that nitrogen prices are coming off for February and March.

The Rondonopolis price remained steady at $670/mt FOB ex-warehouse. Sources reported little activity, as buyers watch to see what happens with urea pricing.

Scotts Expands Hawthorne with More Acquisitions

California, Eastern Cornbelt, News, News Briefs, Specialty

The Scotts Miracle-Gro Co., Marysville, Ohio, said on Jan. 4 it has acquired Luxx Lighting, Los Angeles, and True Liberty Bags, Sonoma County, Calif., in order to strengthen The Hawthorne Gardening Co. business segment.

“These strategic acquisitions reinforce our commitment to provide commercial cannabis cultivators in state-authorized markets with a complete set of solutions driven by insight and innovation,” said Chris Hagedorn, Hawthorne President.

“While the cannabis market continues to see near-term challenges from an over-production in recent months, we see the current reality as an opportunity to further distance ourselves from the competition and strengthen our business for long-term success,” he continued.

“The True Liberty transaction gives us our first offering in this niche market, however, the acquisition of Luxx bolsters a lighting portfolio that is now several times larger and more diverse than our nearest competitor,” he said. “Luxx has deep roots in the cannabis industry with lights that were designed, tested, and refined in collaboration with the team at Jungle Boys, a company run by a group of some of the best cannabis cultivators in the world. We look forward to an ongoing relationship with Jungle Boys to support the sales and marketing efforts of the Luxx brand.”

Luxx joins a product lineup that also includes the Gavita and Sun System brands, and Scotts said this provides the opportunity for significant cost synergies and process improvements across the portfolio.

Scotts acquired the Luxx assets for $215 million. Hawthorne, which previously did not distribute Luxx, will expand the marketing and distribution of the brand in emerging markets, including the East Coast. The acquisition, which closed Dec. 30, 2021, adds approximately $100 million in sales and $20 million in operating income to Hawthorne on an annualized basis.

While approximately $75 million of revenue from Luxx is expected in the remainder of fiscal 2022, the transaction is expected to be neutral to earnings for the year due to the impact of purchase accounting and one-time deal costs.

True Liberty, which was acquired for $10 million, introduced storage solutions directly to the hydroponic market, developing a full offering of liners and storage solutions to dry and cure plant products. Hawthorne has been the primary U.S. provider of True Liberty brands, which expands Hawthorne’s harvest portfolio.

These deals follow the August 2021 acquisitions of HydroLogic Purification Systems (GM Aug. 6, 2021), which moved Hawthorne into the water reclamation and purification category, and Rhizoflora (GM Aug. 20, 2021), whose Terpinator and Purpinator brands expanded Hawthorne’s nutrient offering.

Scotts Retains Earnings Guidance Despite Expected Decline in Hawthorne Sales

Eastern Cornbelt, News, News Briefs, Specialty

ScottsMiracle-Gro Co., Marysville, Ohio, said on Jan. 4 it is maintaining its full-year company-wide outlook for adjusted earnings per share ($8.50-$8.90 per share) despite a greater-than-expected decline in Hawthorne sales for the fiscal first quarter, which ended Jan. 1. First-quarter sales in Hawthorne are expected to decline approximately 40 percent, caused by a slowdown in the cannabis market, as well as supply chain disruptions that have delayed the sale of certain product lines.

“We are optimistic the supply chain disruptions we’ve experienced will be corrected by the end of January and we’ll be able to meet the continued demand we’re seeing for our industry-leading signature products,” said Cory Miller, Scotts CFO. “We’re also encouraged by the year-over-year increase we’ve been experiencing in pre-orders for growing media products for delivery to commercial growers in the second and third quarters.

“However, the decline we’ve seen in the first quarter, against a 71 percent growth comparison a year ago, is greater than we had anticipated,” he continued. “Based on our current view of the market, we are lowering our full-year sales guidance for Hawthorne to a range of 0 to minus 10 percent on a year-over-year basis, including the expected benefit from Luxx (see related story). This range assumes a return to growth during the second half of the year.”

The company said its U.S. Consumer segment continues to perform well, with POS growth in both dollars and units in every major product category and continued support in all retail channels. “Consumer purchases, in units, were up 3 percent in the quarter against a 40 percent growth comparison a year earlier, and POS dollars increased 9 percent in the quarter,” Miller said. “Retail inventory levels are appropriate for this time of the year, and we remain optimistic about the potential for the segment as we prepare for the upcoming lawn and garden season.”

U.S. Consumer segment sales in the first quarter are expected to decline less than 20 percent, which is better than originally anticipated. Miller said it was too early to raise guidance for this segment, though he said current trends and continued optimism about the upcoming season, coupled with a focus on expense control in both Hawthorne and U.S. Consumer, allow the company to maintain per share guidance.

Sackett-Waconia Turns 125

News, News Briefs, Northeast

Sackett-Waconia, Baltimore, the U.S.-based designer and manufacturer of fertilizer equipment systems, is entering its 125th year. Founded in 1897 as The A.J. Sackett & Sons company, it acquired a controlling interest in Waconia Mfg. Inc. in 1994.

In 2006, Sackett do Brasil was formed with a Brazilian company to serve Brazil’s fertilizer industry. In 2016, the companies came together under the banner of Sackett-Waconia and have continued their mission of providing design, engineering, fabrication, and customer support to the fertilizer industry.

“We have seen an evolution over these many years from the early days of crushing and mixing organic fertilizers to the development of high analysis granular fertilizers,” said Larry Taylor, Sackett-Waconia CEO. “Modern agriculture has taken recent advancements a step further to a soil specific model, where accurate blends of high analysis macro and micro fertilizers, soil amendments, and biologicals are required to maximize plant and soil health and improve Nutrient Use Efficiency on every acre.

“Our mission, over the past 125 years, is to provide customers with products and services that offer state-of-the-art fertilizer production equipment solutions,” he added. “We take this opportunity to offer our gratitude to the fertilizer industry for supporting our success!”

Prophecy Potash Becomes Alpha Copper

News, News Briefs, Potash, Vancouver

Junior mineral exploration company Prophecy Potash Corp., Vancouver, said on Dec. 31 it will change its name to Alpha Copper Corp. It expected the name change and a change of its ticker symbol to occur on Jan. 4, 2022.

The common shares of the company will continue to trade on the Canadian Securities ‎Exchange under its new trading symbol, ALCU, commencing at market open on Jan. 4, 2022. ‎ The company said a new corporate website, www.alphacopper.com, will be available soon.

Novatek, Uniper Ink Term Sheet on Low Carbon Ammonia Supply

Ammonia, Germany, News, News Briefs, Northwestern Europe, Russia

Novatek, Moscow, Russia’s largest independent natural gas producer, and Uniper SE, Düsseldorf, an energy supply company, announced on Dec. 22 the signing of a term sheet on long-term supply of up to 1.2 million mt/y of low-carbon ammonia to the German and Northwest Europe markets. The product price will be indexed to relevant European and global benchmarks.

The product will be produced at Novatek’s planned Obskiy Gas Chemical Complex project, which will include carbon capture and storage facilities, and delivered to Uniper’s planned ammonia import terminal in Wilhelmshaven, Germany (GM April 16, 2021), equipped with an ammonia cracker operating with renewable power.

The imported low-carbon ammonia will be used as hydrogen carrier, transformed into gaseous hydrogen and fed into the future German hydrogen pipeline system, as well as supplied directly as a clean feedstock and as a fuel. The signing of the term sheet progresses cooperation based on a Memorandum of Understanding signed in January 2021.

“We are now at the pre-FEED stage for a low-carbon ammonia and hydrogen plant with CCS facilities, and signing of term sheets for long-term supply demonstrates growing demand for low-carbon products, which is an essential precursor for the Final Investment Decision on this project,” said Leonid Mikhelson, Novatek Chairman. “The plant will be located next to our LNG cluster in Yamal in order to minimize the infrastructure costs and provide the most competitive clean energy supplies to the global market.”

AGI Completes Eastern Fabricators Acquisition

Canada, News, News Briefs

Equipment supplier Ag Growth International Inc., Winnipeg, said on Jan. 4 it has completed the acquisition of Eastern Fabricators, Georgetown, Prince Edward Island. Eastern specializes in the engineering, design, fabrication, and installation of high-quality stainless-steel equipment and systems for food processors. Eastern operates three facilities in Canada, with two in Prince Edward Island and one in Ontario.

Consideration for the transaction includes an upfront purchase price of C$29.25 million, payable upon closing, plus the potential for an additional C$15.75 million in earn-outs based on the achievement of financial targets in future years.

As of October 2021, on a trailing twelve-month basis, Eastern generated approximately C$26 million in revenue and $8 million in adjusted EBITDA.

Amazon Invests in Sustainable Fertilizer, Ammonia Related Companies

News, News Briefs, Specialty

Amazon, Seattle, reported that it has invested in Hippo Harvest, Half Moon Bay, Calif., and Amogy, Brooklyn, N.Y. The investments are a part of Amazon’s $2 billion Climate Pledge Fund, established in 2020 to help the company meet its climate goals.

Amazon said Hippo Harvest’s pilot farm system uses a direct-to-root fertilizer system that requires 95 percent less water than traditional farming. Due to the controlled environment, the greenhouses can be built almost anywhere, which would eliminate the emissions from transportation and increase the shelf life of fresh vegetables. Going forward, this produce would likely be sold at Amazon-owned grocery ventures Whole Foods and Amazon Fresh.

Amogy, a technology startup, is focused on developing ammonia-to-power systems that are emission-free and will eventually be used to power heavy-duty transportation such as long-haul trucking, aviation, and marine transportation.

The Mosaic Co. – Management Brief

Management Briefs, Tampa

The Mosaic Co., Tampa, on Jan. 6 announced that Yijun “Jenny” Wang has been named Senior Vice President-Global Strategic Marketing, Head of China and India, and joined the company’s Senior Leadership Team, effective Jan. 1, 2022.

Wang, the current Vice President-Global Strategic Marketing, leads pricing strategy and product placement for phosphate and potash globally, strategic market and analysis, brand marketing, new product commercialization, and Mosaic’s distribution businesses in China and India. Wang has also served on the Board of Directors at Canpotex for two years.

“Jenny’s expertise in the global agriculture market has played a key role in Mosaic’s strategy for the past 10 years,” said President and CEO Joc O’Rourke. “Her leadership will be critical to Mosaic’s global positioning as the industry continues to evolve and we expand our distribution business in China and India.”

Prior to joining Mosaic in 2011, Wang held various leadership roles in Sales, Marketing, Strategy and Business Development, and Global Product Management, and as Country Managing Director at Syngenta for 16 years in China, Vietnam, and its global headquarters in Switzerland.

Wang earned a B.S. in Biology from Sun Yat-sen University and a Master of Biology degree from South China Agriculture University. She graduated from the Advanced Management Program at Harvard Business School.

Star of the West to Acquire Citizens LLC

News, News Briefs

Star of the West Milling Co., a Michigan ag retail company with agronomy locations at Emmett, Rapson, and Richville, announced in December that it is acquiring Citizens LLC, a Michigan-based grain handler, agronomy supplier, and global exporter.

Star of the West said the acquisition will bolster its capabilities across several key areas, including grain receiving and marketing, agronomy services, and food-grade soybean exports. Terms of the deal and an expected closing date were not confirmed.

“This acquisition brings together two successful companies that share strong Michigan roots, global business relationships, and a track record of success serving our farmers, customers, and employees,” said Jim Howe, President and CEO of Star of the West. “With much in common between our two companies, this acquisition aims to leverage shared areas of expertise to deliver strong results and continue growing Michigan agriculture.”

Citizens has a staff of more than 30 employees at Michigan locations in Vermontville, Potterville, Charlotte, and Battle Creek. The company’s products and services include chemicals, fertilizer, seed, specialty soybeans, custom application, seed treating, soil sampling, trucking, and overseas container hauling. The company receives and markets corn, wheat, and soybeans, including non-GMO soybeans, from Michigan farmers.

“Star of the West Milling Company is one of the oldest and most respected, successful independent agricultural businesses in Michigan,” said Bob Mansfield, Founder and President of Citizens. “Star of the West is a local company known for being good stewards of their customers, employees, and Michigan farmers, and I am proud to have them build on the success we have achieved at Citizens LLC since 1987.”

Star of the West is a 151-year-old company with headquarters in Frankenmuth, Mich. It began as one flour mill and now operates five mills in four states, including Indiana, Ohio, Michigan, and New York. In addition to its three agronomy locations, the company also operates ten elevators, as well as dry bean and food-grade soybean processing facilities.

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