US bankrupt MissPhos to shut down DAP production, seeks buyers

HOUSTON (ICIS)–Mississippi Phosphates (MissPhos) will shut down production of diammonium phosphate (DAP) as of early next week, which will result in the loss of 175 job, and it is seeking buyers for its assets while under bankruptcy protection, the US fertilizer producer announced on Friday.

The closure of MissPhos could have a significant effect on the domestic market since the company is the third largest phosphate producer in the US, behind Mosaic and PotashCorp.

When MissPhos announced its bankruptcy, market sources noted that it could affect North American buyers who prefer domestic product because of its technical specifications, especially for off-coloured and blondish DAP volumes.

MissPhos officials said that the employees being laid-off will be transitioned out over a two week period and that only 50 employees are being retained in order to bring down operations and perform the remaining core functions.

Beyond normal plant functions and logistical work at the facility, MissPhos said that its sulphuric acid operations will continue to run for several days in order to establish inventory needed to support on-going wastewater treatment needs.

The DAP granulation plant has a maximum annual production capacity of approximately 850,000 tons (771,000 tonnes) while the existing sulphuric acid plants have the capacity to produce acid sufficient for annual DAP production of approximately 600,000-640,000 tons.

“The company will continue with other aspects of its core operations, including ammonia terminaling operations, maintenance, security and environmental controls. At this time, we do not know when DAP production might resume. The company is actively seeking buyers for its assets while we continue to move forward with the other elements of our bankruptcy case,” said Steve Russo, MissPhos CEO.

On 27 October MissPhos filed for Chapter 11 protection in the US Bankruptcy Court, Southern District of Mississippi. 

In response to the filing, the Pascagoula-based producer said it had pursued bankruptcy so it could gain some relief from creditors and also secure an updated funding facility in order return to normal operations as soon as possible. Company officials had declined to comment on possible layoffs or employee furloughs as a result of the filing for protection.

Mississippi Phosphates owns and operates manufacturing and distribution facilities and produces agri-chemicals and fertilizers with its manufacturing facilities consisting of two sulphuric acid plants, a phosphoric acid plant, a DAP granulation plant and ammonia terminal operations.

Formerly a part of Yazoo-City-based Mississippi Chemical, Mississippi Phosphates emerged from that bankruptcy in December 2004.

The company listed assets and debt of more than $100m in Chapter 11 papers filed in US Bankruptcy Court in Gulfport, Mississippi. Two smaller subsidiaries also sought creditor protection. The case number is 14-bk-51667.

In July the company announced it was consolidating all operations at its Pascagoula manufacturing facility and closing administrative headquarter in Madison, Mississippi, in order to increase efficiencies and eliminate some costs. In August Russo was named as CEO replacing interim CEO James Sherbert.