CF Industries Holdings, Inc. (NYSE:CF) today announced that it has
entered into long-term ammonium nitrate (AN) supply agreements with
Orica International Pte. Ltd. (“Orica”) and Nelson Brothers, LLC, a
joint venture between an Orica affiliate and Nelson Brothers, Inc. Under
the terms of the related agreements, CF Industries has committed to
supply between 700,000 to 800,000 tons of industrial grade ammonium
nitrate and ammonium nitrate solution on an annual basis for a period of
at least 10 years beginning January 1, 2017.
“These agreements represent another in a series of moves that enhance
long-term value for CF Industries’ shareholders and customers,” said
Tony Will, president and chief executive officer, CF Industries
Holdings, Inc. “The agreements will provide CF Industries a steady base
demand for a majority of the production capacity from our Yazoo City
Nitrogen Complex at very attractive economics. They also show the value
we bring to customers as they assure Orica and Nelson Brothers access to
a reliable, long-term supply of industrial grade ammonium nitrate and
ammonium nitrate solution.”
Outside of Orica’s existing production facilities in Carseland, Alberta,
and Geneva, Utah, CF Industries will become the companies’ primary
supplier of industrial grade ammonium nitrate and ammonium nitrate
solution for the U.S. and Canada markets. Product pricing under the
related agreements will be tied to the cost of natural gas, providing CF
Industries a defined margin.
The volumes specified under the supply agreements will require CF
Industries to increase ammonium nitrate solution loading capacity and
industrial grade ammonium nitrate production capacity at Yazoo City. The
plant reconfiguration will begin in 2014 at an estimated total cost of
$65 million.
About CF Industries Holdings, Inc.
CF Industries Holdings, Inc., through its subsidiaries, is a global
leader in nitrogen and phosphate fertilizer manufacturing and
distribution, serving both agricultural and industrial customers. CF
Industries, headquartered in Deerfield, Illinois, operates world-class
nitrogen fertilizer manufacturing complexes in the central United States
and Canada; conducts phosphate mining and manufacturing operations in
central Florida; and distributes plant nutrients through a system of
terminals, warehouses, and associated transportation equipment located
primarily in the midwestern United States. The Company also owns 50
percent interests in GrowHow UK Limited, a fertilizer manufacturer in
the United Kingdom; an ammonia facility in The Republic of Trinidad and
Tobago; and KEYTRADE AG, a global fertilizer trading organization
headquartered near Zurich, Switzerland. CF Industries routinely posts
investor announcements and additional information on the Company's Web
site at www.cfindustries.com
and encourages those interested in the Company to check there frequently.
Forward-Looking Statements
All statements in this communication, other than those relating to
historical facts, are "forward-looking statements." These
forward-looking statements are not guarantees of future performance and
are subject to a number of assumptions, risks and uncertainties, many of
which are beyond our control, which could cause actual results to differ
materially from such statements. These statements include, but are not
limited to, statements about the benefits, expected timing of closing
and other aspects of the proposed transactions; statements about future
strategic plans; and statements about future financial and operating
results. Important factors that could cause actual results to differ
materially from our expectations include, among others: the cyclical
nature of our business and the agricultural sector; the global commodity
nature of our fertilizer products, the impact of global supply and
demand on our selling prices, and the intense global competition from
other fertilizer producers; conditions in the U.S. agricultural
industry; reliance on third party providers of transportation services
and equipment; risks associated with cyber security; weather conditions;
our ability to complete our recently announced production capacity
expansion projects on schedule as planned and on budget or at all; risks
associated with other expansions of our business, including
unanticipated adverse consequences and the significant resources that
could be required; potential liabilities and expenditures related to
environmental and health and safety laws and regulations; our potential
inability to obtain or maintain required permits and governmental
approvals or to meet financial assurance requirements from governmental
authorities; future regulatory restrictions and requirements related to
greenhouse gas emissions; the seasonality of the fertilizer business;
the impact of changing market conditions on our forward sales programs;
risks involving derivatives and the effectiveness of our risk
measurement and hedging activities; the significant risks and hazards
involved in producing and handling our products against which we may not
be fully insured; our reliance on a limited number of key facilities;
risks associated with joint ventures; acts of terrorism and regulations
to combat terrorism; difficulties in securing the supply and delivery of
raw materials, increases in their costs or delays or interruptions in
their delivery; risks associated with international operations; losses
on our investments in securities; deterioration of global market and
economic conditions; our ability to manage our indebtedness; and loss of
key members of management and professional staff. More detailed
information about factors that may affect our performance may be found
in our filings with the Securities and Exchange Commission, including
our most recent periodic reports filed on Form 10-K and Form 10-Q, which
are available in the Investor Relations section of the CF Industries Web
site. Forward-looking statements are given only as of the date of this
release and we disclaim any obligation to update or revise the
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
Copyright Business Wire 2014