Fertilizer Markets and Finance

K+S AG, Europe’s largest potash maker, delayed the starting date of a new plant in Saskatchewan by about six months as spending on the project will exceed targets by 26 percent. The stock fell to a five-month low.

K+S AG (SDF), Europe’s largest potash maker, delayed the starting date of a new plant in Saskatchewan by about six months as spending on the project will exceed targets by 26 percent. The stock fell to a five-month low.

The budget for developing the Canadian site was increased to C$4.1 billion ($4 billion) from the C$3.25 billion announced in November 2011, Kassel, Germany-based K+S said today in a statement. Operations will start in mid-2016 rather than at the end of 2015, the company said.

“The new plant will be the main source for distributing to the emerging regions in Asia” and South America, and as well to North America, Chief Executive Officer Norbert Steiner said in the statement. The plant “will earn a 15 percent premium on the cost of capital before taxes.”

The company is expecting volume for potash, a fertilizer ingredient, to hold steady this year after 2012 was the second- best year ever for the unit. K+S is placing what it calls the Legacy Project in Saskatchewan at the heart of plans to expand globally as ore grades decline in older German mines, limiting production, which currently stands at 7.5 million tons of potash and magnesium products.

Read more at Bloomberg

K + S Potash Canada, a subsidiary of K + S Group, has been awarded a major contract valued at several hundred million to Veolia Water Solutions & Technologies to supply the evaporation and crystallization equipment for the new project “Legacy” that K + S Potash is taking place in the Canadian province of Saskatchewan. It is the largest North American mining plant, designed to reach a production capacity of more than 2 million tonnes of potassium chloride in 2017.

The plant with HPD of Veolia technology -which will become operational in 2015 - will allow evaporation and crystallization at lower cost of operation. Furthermore, K + S Potash Canada has decided to partner with Veolia because of its ability to execute large projects and for his commitment to the efficient use of water and energy.

In this project, Veolia is responsible for the engineering and supply of equipment that make up the core of the process of evaporation and crystallization. The process involves the evaporation of the brine, then performing the crystallization of sodium chloride and potassium chloride (potash). As a final stage, the brine is separated from potash and this is refined to achieve a high quality end product.

The K + S Group is one of the leading global suppliers of standard and specialty fertilizers. In the salt business, K + S Group is the leading producer by production capacity, with plants in Europe, North and South.

Read more at iagua.es

• It is the largest North American mining plant, designed to reach a production capacity of more than 2 million tonnes of potassium chloride in 2017.
• The HPD technology plant of Veolia , which will become operational in 2015 - will allow evaporation and crystallization at lower cost of operation.
•  K + S Potash Canada has decided to partner with Veolia because of its ability to execute large projects and for his commitment to the efficient use of water and energy.

Bağfaş, one of the leading fertilizer makers in Turkey, is prepared to invest an additional 165 million euros in its Bandırma plant. 

Bağfaş Chairman Kemal Gençer, spoke over the weekend at the Bağfaş plant and said that in September or October the company would hold a groundbreaking ceremony for Turkey’s first stabilized granule ammonium nitrate and calcium ammonium nitrate (CAN) facility. He stressed that the facility would be capable of producing 660,000 tons of granule calcium ammonium nitrate. This new facility will be able to produce 1,200 tons of nitric acid, 1,550 tons of granule ammonium nitrate and 2,000 tons of calcium ammonium nitrate per day. “The total cost of the facility will be financed by roughly 140.7 million euros from foreign investors and 20-25 million euros by Bağfaş, leading to a grand total of 165 million euros. Some 85 percent of the 140.7 million euros will be provided by loans from the German government and will have a repayment window of 13 years,” said Gençer. “The there would be no loan payments in the first three years and the loan will then will be repaid in 10 years with 20 installments.” 

Gençer said Bağfaş had been given these loans without even a guarantee letter or mortgage, which demonstrated faith in the Turkish economy, Bağfaş, its employees and engineers.

Bağfaş’s Gençer (L) shakes hands with a German partner in this company photo.

The company that’s building the first new potash mine in Saskatchewan in 40 years is the same company that helped build the last new potash mine in the province in the 1970s, before it was taken over by the then-NDP government to become Potash Corp. of Saskatchewan’s Lanigan mine.

But Nobert Steiner, CEO of K+S Group of Kassel, Germany, which is building the $3.25-billion solution potash mine near Bethune, 80 km northwest of Regina, says there are no hard feelings about the forced sale of the former Alwinsal mine to the Blakeney government for $76.5 million in 1977.

“Even more than a generation later, you can hardly believe that such an act could happen in a country belonging to the western world,” Steiner told participants at a sod-turning ceremony at the Legacy project site Tuesday. “However, after so many years, we are not looking back in anger anymore.”

In fact, Steiner said K+S, which first came to Saskatchewan in the 1960s and started producing potash in 1968, was welcomed back to the province by none other than Premier Brad Wall. (Steiner said the K in K+S stands for Kali or potash in German, while the S stands for Salz or salt.)

BETHUNE, - Shovels hit the dirt when a German fertilizer company held a groundbreaking ceremony in Saskatchewan, but it’s what lies 1,500 metres below the surface that has drawn K+S Group to the province.

K+S officially broke ground Tuesday on the first new potash mine in Saskatchewan in nearly 40 years.

The C$3.25-billion Legacy mine project is near Bethune, about 60 kilometres northwest of Regina.

“People are watching very much what we are doing because we want to build a greenfield mine,” said K+S chairman Norbert Steiner.

“Our time frame is very tight as we want to have the first production available in the year 2015, maybe in the second half, not much, but we should start with that and then ramp it up 2017 to two million tonnes. And then the secondary mining phase will come along with more.”

Under skies that threatened rain, company officials and politicians were escorted around the future mine site.

K+S will use a solution process to remove minerals from under the rolling green fields that cover most of the land. Solution mining involves dissolving underground water-soluble minerals with water, which is then extracted from the ground and the minerals recovered from it.

Saskatchewan has the world’s largest deposits of potash, a mineral mainly used in fertilizer, and Steiner said the resource will help feed the world for generations to come.

“This is why we are investing a massive amount of effort, energy and capital into this project,” he said.

“We believe that the Legacy project is an investment in the future of our company, an investment in the people of Saskatchewan and an investment in a sustainable future.”

Read more at Winnipeg Free Press

The global volume of potash sold will fall 2012th In China and India, the largest decline is expected. For the salt and fertilizer supplier K + S are the rather poor prospects. The course is already fallen deeply. An entry may therefore be worthwhile.

The global potash sales, according to K + S will this year “up to 58 million tons of” decline. Last year 60.2 million tons were shipped worldwide. It expects the Mutual Group, that especially in the emerging markets of Asia will be less demand for fertilizer . This should not K + S but hit as hard as Potash and Uralkali. The two rivals will depend heavily on business with China and India. K + S the other hand, makes his headquarters in Europe. Asia less than 20 percent controls the proceeds of the potassium and magnesium in business.

Above expectations

The fertilizer and salt producer K + S in the first quarter, although much less deserving than a year ago, but could exceed analysts’ forecasts. Kassel’s group recorded in the first quarter of 2012, sales fell by twelve percent to 1.44 billion euros. The operating result fell by as much as 24 percent to 281 million euros, while net profit rose 29 percent to 193 million euros.

The market environment of K + S is currently not as good as you would have thought a few weeks ago. However, the long-term growth prospects of the FTSE Group continues to be good. With a price earnings ratio of 10 2012er, the stock is rated very low. On average, the investors had in the past ten years, willing to pay 15 times the profit. Unfortunately, the stock has fallen by the decline in recent weeks under the stop of 34 €. Investors should now necessarily wait and see if the important support holds around 33 €. Currently the stock is trading slightly below that value already.

K+S AG (SDF), Europe’s biggest potash producer, reported first-quarter profit that beat analyst estimates after demand for fertilizer rose at the end of the quarter, helping offset a decline in demand for de-icing salt.

Earnings before interest and tax excluding one-time items, which the company calls Ebit I, declined 24 percent to 281.1 million euros ($364.8 million) in the quarter, Kassel, Germany- based K+S said today in a statement. Analysts surveyed by Bloomberg had predicted 265.4 million euros.

Chief Executive Officer Norbert Steiner today reiterated a forecast for operating profit to decline “moderately” and sales to remain stable for the full year. Farmers ordered more potash fertilizer at the end of March after the European planting season started late because of dry and cold weather at the beginning of the year, the company said today.

Read more at Bloomberg

EuroChem, Russia’s largest fertilizer maker by revenue, is considering spinning off its potash business, billionaire Chairman Andrey Melnichenko told the Vedomosti daily in an interview.

EuroChem has projects to build two potash mines in Russia with combined capacity of 8 million metric tons a year, the newspaper said. EuroChem will be able to process only 1 million tons of these volumes into complex fertilizers, which is why it may spin off its potash business into a separate entity, Vedomosti cited Melnichenko as saying.

EuroChem may consider an initial public offering of shares once it builds the potash mines and spins off the business, Melnichenko told Vedomosti.

Melnichenko, 40, himself holds “slightly less than 10 percent” in German potash producer K+S AG (SDF), according to the interview. EuroChem cut its stake in K+S to about 1 percent, the German company said March 27.

Melnichenko’s fortune was valued at $10.8 billion by the Forbes magazine’s Russian edition published this month. He also controls coal producer Siberian Coal Energy Co., or Suek, and coal-fueled power generators in Siberia and Russia’s Far East.

To contact the reporter on this story: Ilya Khrennikov in Moscow at ikhrennikov@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

K+S is pleased to announce that Dr. Ulrich Lamp, currently managing

director of K+S IT Services GmbH has been appointed as President and

Chief Executive Officer of K+S Potash Canada GP effective July 1, 2012.

The position will be located in the Saskatoon office of K+S Potash Canada

GP.

Read more at K+S Potash Canada

OAO EuroChem, owned by K+S AG investor Andrey Melnichenko, is close to an agreement to buy the German potash maker’s nitrogen-fertilizer distribution unit, said two people with knowledge of the situation.

Talks are at an advanced stage and an agreement may come within the next three weeks, said the people, who declined to be identified because the negotiations are private.

The asset should fetch at least 100 million euros ($134 million), one of the people said.

EuroChem is in the process of buying BASF AG’s nitrogen fertilizer operations for 700 million euros, and adding the K+S distribution business would complement those assets. K+S, which is focusing on potash and salt, has an exclusive agreement to sell output from the BASF plants being acquired by EuroChem.

Melnichenko is also the largest investor in Kassel, Germany-based K+S with a 9.88 percent stake, as of Jan. 26.

Spokespeople for EuroChem weren’t immediately available out of hours, while K+S declined to comment.

To contact the reporter on this story: Aaron Kirchfeld in Frankfurt at akirchfeld@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

* Euro zone worries move again to forefront

* Indexes off: Dow, S&P, Nasdaq all 0.3 pct

* For up-to-the-minute market news, see (Updates to early trading)

By Chuck Mikolajczak

NEW YORK, Feb 6 (Reuters) - U.S. stock fell on Monday after a five-week rally on concerns Greece may be unable to avoid a chaotic default as it struggles to reach terms on a new bailout package.

Athens allowed another deadline to slip as political leaders failed to respond to terms for a new bailout from the European Union and Internation Monetary Fund. Greece needs the funds by March to meet big debt repayments.

German Chancellor Angela Merkel stepped up pressure on Greece, warning that time was running short for a deal to be struck.

“It’s inevitable the risk profile that Greece represents is definitely going to cool the market tone, there is absolutely no way around that,” said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.

“That lack of clarity, the protracted nature of this crisis and the fact that it simply will not go away, it’s a bit unnerving to people who have seen the market tack on some very nice early year gains, and it forces people to want to be a little cautious.”

The Dow Jones industrial average was down 39.01 points, or 0.30 percent, at 12,823.22. The Standard & Poor’s 500 Index was down 3.86 points, or 0.29 percent, at 1,341.04. The Nasdaq Composite Index was down 7.66 points, or 0.26 percent, at 2,898.00.

Read more at Reuters

In studies conducted at the Institute of Applied Plant Nutrition, which is part-funded by fertiliser business K+S Kali at Gottingen University, soil samples taken from long-term field trials showed potassium and magnesium fertilisation raised the water storage capacity of soils under field conditions.

Presenting the research results at a technical briefing in the UK, organised by K+S UK & Eire, Prof Andreas Gransee, head of applied research and agronomy at K+S Kali, said potassium protec-ted soil porosity, promoting the formation of optimal, medium sized soil pores which increased water storage and improved water use efficiency.

Diminished

In addition, where potassium and magnesium supplies were sub-optimal, diminished root growth reduced the ability of plants to efficiently use available water.

Read more at Farmers Guardian