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Friday, November 20, 2009
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BUSINESS TODAY
Business Today for November 20, 2009
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Moret: No steel mill decision until 2010
Despite strides in U.S. steel production, Nucor Corp. isn’t yet ready to pull the trigger on a more than $2 billion pig iron mill that could come to St. James Parish, a state official said. Nucor remains concerned about carbon-emissions legislation that could be passed by Congress, said Stephen Moret, the Louisiana economic development secretary. Steel production has steadily climbed for more than three months, rising in all but one week during the period. Steel plants in the U.S. now are at more than 65 percent of capacity since the recession dropped them from near full production in mid-2008 to the 40 percent range in early 2009. “Nucor continues to be very concerned about the potential impact of proposed cap-and-trade legislation at the federal level,” Moret said, adding that strict limits could dampen manufacturing competitiveness in the U.S. Nucor also is considering a Brazil site. “We don’t expect a decision from them on the potential Louisiana project until sometime next year,” he said. In Alabama, ThyssenKrupp AG, which is the company that chose the Mobile area over the same St. James Parish site in 2007, will soon open its steel mill. A trade journal, Steel Business Briefing, reported today that ThyssenKrupp’s Duisberg steelworks in Germany will supply slabs for the Alabama mill when it opens in the second quarter of 2010. A year later, that supply chain will convert to a ThyssenKrupp joint venture mill in Sepetiba, Brazil, reported Steel Business Briefing, citing company financial reports in which ThyssenKrupp said the Mobile mill is “largely on schedule.”
Terra stockholders vote for CF slate
Three nominees to the Terra Industries Inc. board of directors — who were backed by fertilizer rival CF Industries — have been elected over Terra candidates, according to unofficial results at Terra’s annual meeting today. Each company operates ammonia-based chemical plants on the Mississippi River near Donaldsonville, with CF’s being the largest in North America. For months, CF has attempted to buy Terra, a $2.9 billion-a-year company, and for months Iowa-based Terra has resisted what it describes as inadequate offers from CF Industries Holdings Inc. Though CF doesn’t control a majority of the Terra board, the election of John Lilly, David Wilson and Irving Yoskowitz over three Terra candidates increases the odds a merger could occur, and CF — while not tipping its hand about its next strategy — isn’t backing off from the deal. “We are pleased that Terra stockholders have voiced their support for CF Industries’ proposed acquisition of Terra by voting for all three of our director nominees,” CF Chairman Stephen Wilson said in a statement this morning. A spokesman for Wilson and CF, which had $3.9 billion in 2008 sales, wasn’t immediately available for comment. In a recent bid for Terra, CF lined up $2.5 billion in financing with Morgan Stanley and said it would offer $32 per share for Terra stock and give Terra stockholders more than one-tenth of a share CF stock. CF claims Terra’s focus on industrial customers and CF’s focus on agricultural customers would create a $6 billion enterprise with complimentary business lines. “CF’s latest proposal substantially undervalues Terra’s near- and long-term prospects,” Terra officials said in a statement today, though they said the board would remain open to “any bona fide opportunity to create meaningful value for Terra shareholders.”
Imperial, Cargill secure bond for new Gramercy refinery
Imperial Sugar Co., the Sugar Growers & Refiners of Breaux Bridge, La., and Minneapolis-based Cargill have secured a $100 million tax-exempt bond offering to finance the new construction of the largest sugar refinery in the United States, creating about 500 construction jobs and 145 permanent jobs in the New Orleans-Baton Rouge area. The refinery will be built next to Imperial’s existing Gramercy facility in the Gulf Opportunity Zone, under a federally backed and state-run program designed to help the region recover from hurricanes Katrina and Rita. The refinery is expected to cost $120 million. Imperial, SUGAR and Cargill will each contribute $30 million to fund construction of the refinery and for operations. The three will equally own the refinery. The bonds are rated Aa3 by Moody’s Investors Service on the basis of a letter of credit from Natixis, acting through its New York Branch, and were underwritten by Thornton Farish Inc. and Natixis Securities North America Inc. “Construction of the refinery will begin immediately,” Lonnie Champagne, chief executive officer of SUGAR, said. “We expect that the new facility will be in operation early in 2011.”
Donelon to discuss Chinese drywall-related insurance issues
Insurance Commissioner Jim Donelon will hold a press conference at 11 a.m. Monday to discuss the insurance coverage issues consumers have encountered when their homes have defective drywall imported from China. Some insurance companies have cancelled coverage because homeowners can't live in the houses until the drywall is removed. Homeowners policies typically require the owner to live in the house. U.S. Rep. Charlie Melancon, D-La., has offered a bill to stop insurers from dropping coverage for people whose homes have the defective drywall but industry experts say the bill would have little effect because insurance is regulated at the state level.
AG Center gets grant to study sweet potato
The LSU AgCenter has been awarded a $2.84 million federal research and extension grant for improving sweet potato production efficiency, quality and food safety. The U.S. Department of Agriculture grant was included in more than $46 million awarded through the Specialty Crop Research Initiative, which was established by the 2008 Farm Bill to support specialty crops in the United States. The LSU AgCenter grant is for a multi-state, multi-disciplinary project, according to Tara Smith, sweet potato specialist and research coordinator at the LSU AgCenter Sweet Potato Research Station in Chase. “The AgCenter is the lead institution on this project along with Mississippi State University, North Carolina State University and University of California, Davis,” Smith said. The project includes 27 participants, including 11 from the LSU AgCenter. The three-year project will focus on overcoming production limitations that reduce yield, improving sweet potato quality and safety and addressing emerging disease threats, Smith said.
American Electric to buy Valley Electric assets
American Electric Power utility subsidiary AEP Southwestern Electric Power Co. plans to pay $94 million for the transmission and distribution assets of Valley Electric Membership Corp., which serves 30,000 member customers in eight parishes south of Shreveport. AEP Southwestern will also pay $30 million to co-op members at closing to cover patronage capital, the money left over after the co-op pays its bills. “We expect that our membership will appreciate the opportunity to vote for the substantial savings in rates offered by SWEPCO and will vote positively on the dissolution when it's presented to them in early 2010,” said Tom Epperson, president and chief executive officer of the co-op.
NATIONAL/INTERNATIONAL NEWS
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