FNA announces Limited Partnership moving on fertilizer plant

SASKATOON, Sept. 26, 2012 /CNW/ - A new fertilizer plant to serve the Canadian market has moved from the conceptual stage to full project development, where farmers are getting involved.

Today FNA announced that a new business in the form of a limited partnership, the FNA Fertilizer Limited Partnership, has been created specifically to provide farmers a mechanism for ownership of a new fertilizer manufacturing facility.

In turn, FNA Fertilizer Limited Partnership has launched a formal project named "ProjectN" (as in Project Nitrogen fertilizer) which will begin raising seed capital immediately.

It had been previously reported that FNA was "pondering" the idea of building a fertilizer plant, but no direct actions to that end have been publicly disclosed until now.

"It needs to be clear that FNA is not talking about getting into the manufacturing business itself," said spokesman Bob Friesen. "Rather, as we have done in the past, we are organizing and providing the catalyst to see a fertilizer plant built. Participation in fertilizer manufacturing will allow farmers to capture more of the value chain."

The ProjectN working group has conducted a review of the sector, analyzed natural gas pricing, plant scale, market demand, competitive supply and other indicators framing the business case for a new development. The results of these preliminary investigations have been positive.

"The business case is compelling," said Friesen. "The real question is if and to what extent farmers want to gain a return on investment to offset the high cost of fertilizer rather than merely paying for it. Whether or not farmers participate, they will pay for new fertilizer plants indirectly as part of the base fertilizer cost." He added that since North America imports nearly seven million tonnes of fertilizer a year, it is obvious that farmers are paying for all the plants that now exist and the profits they make.

The intention of FNA Fertilizer Limited Partnership (FNA FLP) to connect committed purchase contracts for the products of the fertilizer plant to farmers that will own an equity stake in the plant provides a unique form of stability and risk mitigation to underpin the success of the project, while providing farmers a certainty of supply of a key farm input.

FNA has already gauged a high level of interest in its Membership. To further solidify and document farmer commitment, today FNA FLP is launching a seed capital raise.

A new website, www.ProjectN.ca, has been created where Members and non-members can indicate their interest and sign on to commit to the project. The website will provide core information about the fertilizer industry, the nature of the tasks involved in building a plant and the benefits and commitments Members may expect once the plant is built. The earlier farmers commit to the project, the greater the benefits that are expected to accrue from their participation.

Friesen said that if ProjectN receives a strong response through the website and the seed capital raise, FNA & FNA FLP will be in a position to make additional "concrete announcements in a relatively short time frame."

Farmers of North America is a farmers' business alliance with the mission of "Improving Farm Profitability."
FNA Fertilizer Limited Partnership is a separate legal entity designed to align farmers together to build a fertilizer plant.

SOURCE: Farmers of North America

Cathi O'Neill, FNA & FNA FLP Media Co-ordinator | [phone]

Bob Friesen, FNA FLP Spokesperson & FNA VP Government Affairs | [phone] / [phone] | www.ProjectN.ca