Security concerns cause player to halt ammonium nitrate production

04 July 2005 00:01  [Source: ICB Americas]

Faced with tightening regulations due to the security of the highly explosive product, Canada’s Agrium Inc. became the second producer to choose to halt production of ammonium nitrate (AN). Private US agribusiness J. R. Simplot exited the AN business earlier last month.

Agrium says it sold about 300,000 metric tons of agricultural ammonium nitrate in 2004. These sales represented less than 2 percent of its fertilizer gross profit last year. Agrium expects previous sales of AN will be largely replaced by increased sales of other nitrogen products. The company says the decision will not have any material effect on earnings or assets.

Agrium’s retail operations will also no longer market ammonium nitrate. The company anticipates replacing these sales with increased sales of other nitrogen products and services in North and South America.

Earlier in June, J.?R. Simplot sent a letter to its US and Canadian customers stating that the growing climate of concern about ammonium nitrate had resulted in the decision to remove the product from the company’s fertilizer line. “This action is an unfortunate reality of the times we live in,” noted Bill Whitacre, president of Simplot AgriBusiness.

Simplot produced around 40,000 tons of AN annually at its Brandon, Manitoba, Canada facility.

Ammonium nitrate has been under intense scrutiny since 1995, when Timothy McVeigh used it in combination with fuel to blow up the Alfred P. Murrah Federal Building in Oklahoma City, Okla.

Since then, producers have been working under a voluntary program that involves registering all sales and photographing buyers as well as reporting unusual interest or purchases.

However, some politicians have called the program ineffective and are working on plans that would require licenses for buyers and sellers, better storage safety and the immediate reporting of theft and losses.

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