Our product mix is heavily weighted toward sales of anhydrous ammonia, UAN and ammonium sulfate. Ammonia and UAN, produced at our East Dubuque Facility, are applied mostly to corn and sold to customers within the Mid Corn Belt region of the United States. Ammonium sulfate, produced at our Pasadena Facility, is applied to a variety of crops including soybeans, wheat, corn, potatoes, cotton, canola and alfalfa. We sell ammonium sulfate across the U.S. and internationally.
East Dubuque Facility
Our location in East Dubuque allows us to sell more of our ammonia during application seasons, as opposed to the off-peak fill season, because our customers in the Mid Corn Belt typically experience two application seasons for ammonia every year, one in the spring and one in the fall. Customers are typically willing to pay premium prices for our nitrogen products during application seasons, so we seek to maximize sales during these peak periods. We believe that the location of our facility allows us to respond more quickly to our customers’ needs and to capture more sales during the short application seasons than other producers outside of our market area. In contrast, transportation constraints may cause our competitors to miss the short, weather-dependent application season sales window.
Ammonia: At our East Dubuque Facility, we produce ammonia, the simplest form of nitrogen fertilizer and the feedstock for the production of other nitrogen fertilizers. Our ammonia processing unit has a current rated capacity of 830 tons per day, and we expect to complete an expansion project to increase ammonia production to approximately 1,020 tons per day by the end of 2013. Our ammonia product storage consists of two 20,000 ton tanks at our facility and 15,000 tons of leased storage in Niota, Illinois. As part of our expansion project, we are adding an additional 20,000 tons of on-site ammonia storage. Ammonia is used in the production of all products produced at our facility, except CO2.
UAN: UAN, produced at our East Dubuque Facility, is a liquid fertilizer (25% nitrogen concentration) that has a slight ammonia odor, and, unlike ammonia, it does not need to be refrigerated or pressurized when transported or stored. Our facility has two UAN storage tanks with a combined capacity of 80,000 tons.
Urea: Our urea solution is sold in its liquid state, processed into granular urea through our urea granulation plant at our East Dubuque Facility to create dry granular urea (46% nitrogen concentration) or upgraded into UAN. We sell liquid urea primarily to industrial customers in the power, ethanol and diesel emissions markets. Although we believe there is high demand for our granular urea in agricultural markets, we sell granular urea primarily to customers in specialty urea markets where the spherical shape and consistent size of the granules resulting from our “curtain granulation” technology generally command a premium price. Our facility has a 12,000 ton capacity bulk warehouse that may be used for dry bulk granular urea storage.
Nitric Acid: We produce nitric acid at our East Dubuque Facility through two separate nitric acid plants. Nitric acid is either sold to third parties or used for the production of ammonium nitrate solution, as an intermediate from which UAN is produced.
Diesel Exhaust Fluid: We produce DEF, an industrial high-purity urea solution, which sells at a premium to urea used for agricultural purposes. We have a long-term agreement with Yara North America Inc., a leader in the DEF market, under which Yara has the exclusive right to purchase and distribute the high-quality DEF produced at our facility under Yara’s Air1® brand.
Carbon Dioxide: CO2 is a gaseous product that is co-manufactured with ammonia, with approximately 1.1 tons of CO2 produced per ton of ammonia produced. Our East Dubuque Facility utilizes CO2 in its urea production. Some of the CO2 is also converted to a purified food grade liquid CO2 and sold to the food and beverage industry. Our facility has storage capacity for approximately 1,900 tons of CO2. We have multiple CO2 sales agreements that allow for regular shipment of CO2 throughout the year, and our current storage capacity is sufficient to support our CO2 delivery commitments.
Our facility, located on the Houston Ship Channel, with access to vessels, barge, rail and major highways, allows us to deliver products at a significant freight advantage over our competitors. Additionally, we produce a premium quality ammonium sulfate, which typically allows us to achieve higher sales prices than the more available and lower-grade quality of ammonia sulfate produced by our competitors.
Ammonium Sulfate: Ammonium sulfate is a heavily utilized solid dual-nutrient fertilizer (21% nitrogen and 24% sulfur concentration) produced by combining ammonia and sulfuric acid at our Pasadena plant. We produce a premium quality of ammonium sulfate product in an industry dominated by lower quality material. Only about 21% and 25% of ammonium sulfate produced worldwide and in North America, respectively, is of similar quality. The premium qualities of our ammonium sulfate include the fact that it is sized to the specifications of other nitrogen, phosphate, and potash fertilizer products which results in less segregation in blended products. Our ammonium sulfate also has enhanced stability and shelf life and cakes less during transportation and storage as compared to other ammonium sulfate variations. We plan to begin a debottlenecking project in December of 2013 to increase ammonium sulfate nameplate capacity at the facility by 20%, from 1,750 tons per day to 2,100 tons per day. Our Pasadena facility has 80,000 tons of ammonium sulfate storage.
Ammonium Thiosulfate: We produce 170 tons per day of ammonium thiosulfate (12% nitrogen and 26% sulfur concentration), a liquid fertilizer by-product of the sulfuric acid process at our Pasadena Facility. ATS is typically combined with UAN to help increase the efficiency of nitrogen use in crops. We have 14,000 tons of on-site ammonium thiosulfate storage capacity.
Sulfuric Acid: We produce sulfuric acid primarily for the production of ammonium sulfate. Our total production of sulfuric acid is 1,650 tons per day, of which we sell approximately 139,000 ton per year into the industrial market. Our Pasadena Facility has 27,000 tons of on-site sulfuric acid storage capacity.