Because every molecule counts

TESSENDERLO
KERLEY
Because every molecule counts
Jordan Burns
EVP Tessenderlo Kerley
TKI’s unique attributes
• World’s largest producer of sulfur-based
thiosulfate fertilizers with clear growth potential as
well as sound business drivers
• Our cutting-edge liquid fertilizers are well-suited for
drip irrigation applications and are sustainable due to
water availability constraints
• Lowest cost-to-serve producer
• Enhanced market position through innovative
products and business practices
2
Tessenderlo Kerley
MEGA-CHALLENGES
OFFER OPPORTUNITIES
FOR TKI
3
The Challenge
“ 7 billion people to feed today with
2 billion more to join by 2050
70% more food needed ”
Source: UN
The Opportunity
“ More food production with less
arable land and less water ”
The Solution
“ We support food production in
the drought prone regions of the world
through the production and sale of liquid
fertilizers which can be applied
via fertigation ”
Tessenderlo Kerley
HOW KERLEY CORE
IS SEIZING
OPPORTUNITIES
7
TKI produces sulfur-based
liquid fertilizers
Tessenderlo Kerley
Refinery Services
•
Strong relationships with
suppliers ensure low cost
and sustainable supply
•
Raw materials are managed
by long-term contracts
•
Integrated players
(combining raw materials
and fertilizer production)
have a competitive
advantage
•
Raw Materials
Hydrogen sulfide, sulfur
•
and a small percentage of •
ammonia are sourced
through the environmental
service that TKI provides
to the refinery
Key
Products
Liquid thiosulfates •
Slow release
nitrogen
(Triazone®)
Distribution
Extensive terminals
(60+) and transporters
(truck and rail) ensure
supply continuity
•
End-use
Proper plant nutrition
leads to higher plant
yields and added
nutritional
consumption benefit
to humans and
livestock
8
Source: Kerley
Tessenderlo Kerley footprint
Billings
Finley, WA
Burley, ID
ATS (under const)
2011 Net Sales
€ 271 m
REBITDA
€ 66.5 m
Ham, Belgium
ATS expansion
Izmir, Turkey
Mc Pherson
Fresno, CA
Coffeyville
Bahrain
joint venture
Eufaula, AL
Phoenix, AZ
Corporate
Tucson, AZ
R&D Lab
Carlsbad, NM
TKS Office
Garry Williams
Wynnewood
Agriphos
Ponca City
Mining
Plant
New project
Tolling
Admin
9
Unique business model giving
strong competitive advantage
Value proposition
Refineries
Waste
streams
containing
H2S
Regeneration
service steam
improved compliance
Service
fee
capital
H2S, SO2 recovery production and distribution of S-derivatives
Sell products
Revenue
Markets: agrochemicals, industrial
10
Competitive strengths
Low cost
producer
•
•
•
Backward integrated into raw materials
Economies of scale
Largest North American non-integrated KOH consumer
Product
portfolio
•
Unparalleled range of sulfur-based liquid fertilizers
Image
•
Kerley is the market leader
•
•
Refinery Services – Kerley's strength is its operating history and the
Tail Gas Technology that provides regulatory compliance
Niche liquid fertilizer know-how
•
•
Strategically located distribution terminals
Extensive rail and truck networks
Know-how
Logistics
set-up
11
Source: Kerley
Products & applications
Name
Description
•
Liquid fertilizer, primarily used
on broad acre crops, e.g., corn & wheat
•
Potassium thiosulfate specialty fertilizer, used on e.g., corn,
wheat, vegetables, grapes, almonds, citrus
•
Calcium thiosulfate specialty fertilizer, used on e.g.,
almonds, vegetables, citrus
•
Family of urea-triazone based, slow release nitrogen, clear liquid
fertilizers applicable as a foliar and/ or soil-applied solution,
used on e.g., corn, cotton, row crops, orchards
•
Magnesium thiosulfate fertilizer used on e.g., grapes,
citrus, some vegetables
•
Applications in both agriculture
and industry
•
Used in coloring in soda industry and beet processing;
also effective in cyanide destruction in gold recovery
•
Ammonium sulfide solution, generally an
intermediate used to make other Kerley products
•
Potassium sulfur-based nutrient that is placed next
to the seed safely, used on e.g. corn & wheat
12
Source: Kerley
Products & applications
ATS
KTS
CaTS
MgTS
Triazones
Barley
x
x
x
x
x
Corn
x
x
x
x
x
Grapes
x
x
x
x
x
Oats
x
x
x
x
x
x
x
x
x
x
x
x
x
Nuts
x
x
x
x
Soybeans
x
x
x
x
x
x
x
x
Peanuts
Potatoes
Wheat
x
x
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Source: Kerley
Products & applications
ATS
KTS
Flowers
Cotton
CaTS
MgTS
Triazones
x
x
Orchards
x
x
x
x
x
x
x
x
Sorghum
x
x
x
x
Sugar Beets
x
x
x
x
Tobacco
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Tomatoes
Vegetables
Watermelons
x
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Source: Kerley
Strategy - Kerley
Long-term growth and sustainability
• Further focus on the Americas and expand
into Europe, Middle East and Australia
• Expand product portfolio to broaden offering into
specialty niche markets
• Remain lowest cost-to-serve producer
• Continue to collaborate with stakeholders to
optimize supply chain
• Expand mining and industrial pillar
15
Tessenderlo Kerley
HOW NOVASOURCE
IS SEIZING
OPPORTUNITIES
16
NovaSource
expertise & excellence
• Business model: the efficient exploitation of
established crop protection labels
• Niche player with above industry average
profitability thanks to focus and cost efficiency
• Registration requirements and need for ongoing
studies create barriers to entry
• Lean organization – focused on sales,
marketing & distribution
• Global #1 in Metam sodium soil fumigant production
17
Crop protection product value chain
NovaSource core activities
Raw materials
Activity
Sourcing of basic
raw materials
Intermediate
production
Finished active
ingredient prod.
Processing basic
raw materials
into key building
blocks
Synthesizing
finished active
ingredients (AI’s)
Finished good
production
• Formulating end
use products
(Mixing ai’s with
diluents and
carriers)
• Packaging
Commercialization
• Sales
• Marketing
• Development
• Registration
• Regulatory
defense
Distribution &
End-use
• Distribution
• Warehousing
• Pest control advice
• Application of
products
Regulation ensures control across value chain
The ownership of registered labels and regulatory dossiers creates barriers to
entry and allows NovaSource to support and expand uses (create value)
18
NovaSource’s markets and locations
•
Fumigants
Competitive Position
• Low-cost integrated model
• Sold through distributors
• Toll manufacture for competitors
• Strong logistical advantages
• One of 3 players in the US
•
Plant
Protection
Market Attractiveness
• Recognized brand
Soil
Fumigants
Niche
Pesticides
Niche Pesticides
Competitive Positioning
• Low cost structure
and streamlined supply chain
Manufacturing Locations
• High value in use niche market products
• Registrations and regulatory dossiers
create barriers to entry
•
Plant Health
• High value niche market products
• Some products registered for use on
organic crops
• Protected through registrations and
patents
Region
Product
Burley, Idaho, US
Metam Sodium (soil fumigants)
Finley, Washington, US
Metam Sodium / Metam Potasium
Tolling Sites
US (5 Sites)
Niche pesticides
Germany
Niche pesticides
Israel
Niche pesticides
India
Niche pesticides
China
Niche pesticides
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Significant growth in the NovaSource
product portfolio since 2007…
NovaSource product line introduction/acquisition overview
• Registration
of Sectagon®
- K54
1999
2000
• Acquisition of
Sectagon
42®
Niche Pesticides
Plant Health/Pesticides
Soil Fumigants
2005
2006
• Acquisition of
Purshade®
from Purfresh
• Acquisition of
Surround®
from BASF
2007
2008
• Acquisition of
Sinbar® WDG
from DuPont
• Fosetyl aluminum
(Linebacker®,
Autograph®
and Flanker®)
registered for
the US market
• Fluridone
(Whitecap®)
registered for
the US market
2009
2010
• Acquisition
of Linuron
(Lorox®,
Linex®),
from DuPont
2011
• Acquisition of
Carbaryl®
from Bayer
Cropscience
20
Source: NovaSource
NovaSource
Competitive strengths
• Demonstrated ability to execute stated strategy
• Above industry profitability due to focus and cost efficiency
• Global leader in several product lines
• Lean structure with industry experienced staff, proficient
in the disciplines necessary to fulfill company objectives
• Building organizational depth to manage portfolio growth
and continue the pace of product acquisitions
21
Strategy - NovaSource
Long-term growth and sustainability
• Acquire established crop protection product lines from
the large multinational companies who dominate this
38 billion EUR market
•
Products that serve niche markets
•
Products with significant barriers to entry
• Add value to the products in the portfolio by:
•
Reducing costs and improving the responsiveness of the supply chain
•
Expanding sales through new uses and adding new geographies
•
Representing the products in regulatory reviews and performing new
regulatory studies to assure continued safe use of these products
22
Tessenderlo Kerley
POSITIONED
FOR GROWTH
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A strong growth momentum
Sustained profit growth from executing focused strategy
270.8
231.4
194.1
33.5
REBITDA
Margin
180.0
38.0
66.5
Million Eur
Revenue
47.6
REBITDA
2008
2009
2010
2011
17.3%
21.1%
20.6%
24.6%
24
Complementary expansion opportunities
exist in new products, services and regions
Global
expansion
in existing
products
Adjacent
products
and
services
• Replication of Kerley’s current business model in
international markets
• Initial focus in regions that have similar crops and
infrastructure to North America
• Other sulfur-based liquid fertilizers
• Complementary technologies to treat hydrocarbon
streams delivering marketable by-products
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Tessenderlo Kerley
HIGHLIGHTS
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Highlights
• Clear leadership position with a unique
value proposition
• Solid macro fundamentals underpin a
significant multi-decade growth
• Exceptionally well-positioned along
the entire value chain
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This document may contain forward-looking statements and
information. Tessenderlo Group neither intends to, nor assumes any
obligation to, update or revise these forward-looking statements in light
of developments which differ from those anticipated.
Tessenderlo Group does not accept any liability for the correctness
or completeness or the use of such possible forward-looking
statements, nor any obligation to keep the information in this
presentation or on the website up to date. Any such information may not
be considered as an advice or a recommendation and cannot be relied
upon as the basis for any decision or action.
www.tessenderlo.com
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Tessenderlo Kerley
THANK YOU
Jordan Burns
EVP Tessenderlo Kerley
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