Fertilizer International 522 Sept-Oct 2024
30 September 2024
Tessenderlo – leading on liquids and a solubles success
INTERVIEW
Tessenderlo – leading on liquids and a solubles success
Tessenderlo Kerley International (TKInt) is a major global supplier of water-soluble sulphate of potash plant nutrition and the leading producer of thiosulphate-based fertilizers. In an exclusive interview, we speak to Nicolas White the company’s Portfolio & Knowledge Director, about recent strategic developments. These include major investments in new production, transshipment and storage capacity, production offtake agreements, and product sales and marketing rights.
Tessenderlo Kerley International (TKInt) was formed in 2017. The new Tessenderlo Group business unit brought together the strongly-growing Kerley International business, responsible for marketing liquid thiosulphate-based fertilizers (notably Thio-Sul® , KTS® and CaTs® ) outside the US and Canada, and the well-established SOP Plant Nutrition business with its market leading granular (GranuPotasse® ), soluble (SoluPotasse® ) and foliar (K-Leaf® ) sulphate of potash (SOP) products (Fertilizer International 484, p29).
Strategic strengthening
TKInt operates a large-scale SOP plant at Ham, Belgium, supplying countries globally, and liquid thiosulphate plants outside of the US. This includes production units for potassium thiosulphate (KTS® ) and calcium thiosulphate (CaTs® ) located next to the SOP plant in Ham. A new ammonium thiosulphate (Thio-Sul® ) plant also opened in Rouen, France, in 2017, this being well-positioned to supply the large French urea ammonium nitrate (UAN) market. Additionally, a Turkish operation in Izmir serves the Middle Eastern markets with KTS® and tailored liquid fertilizers.
TKInt is currently finalising the construction of a new Thio-Sul® production plant at Geleen in the Netherlands. This is expected to become operational in the third quarter of 2024.
“With the new plant in Geleen, which will be our second Thio-Sul® plant in Europe, we are further expanding our local presence in the liquid fertilizer market for precision farming. The Geleen branch will respond to the growing demand for liquid fertilizers from the European market. These fertilizers supplement sulphur nutrients and help limit nitrogen losses,” explained Geert Gyselinck, TKInt’s Executive Vice President.
The new Geleen plant strengthens TKInt’s position in the Western European liquid fertilizer market and assists with sustainability goals by bringing liquid fertilizers closer to its customers. Output from the Geleen plant will partially flow through Tessenderlo Kerley Fleuren, a tank storage and transshipment company located in the Port of Cuijk that was acquired by Tessenderlo Group in 2022.
In 2021, TKInt entered into a partnership with Kemira of Finland with a long-term offtake agreement to market and distribute premium SOP. This made the company the largest global supplier in the premium water-soluble SOP market.
Last year, TKInt also entered into an agreement to acquire the marketing and sales rights for ammonium thiosulphate (ATS) fertilizers produced by Esseco Srl in Trecate, Italy. Tessenderlo also bought the Secofit® TS and Agrifix® agricultural trademarks covering this product range.
“This agreement confirms Tessenderlo Kerley International’s commitment to the ammonium thiosulphate fertilizer market. Thanks to the production capacity of Esseco Srl, we will have additional volumes of ammonium thiosulfate fertilizers available,” said Geert Gyselinck. “In addition to cooperating with a company which shares the same mindset towards continuous improvement in terms of both product and process, this agreement will also improve the service we offer to our customers.”
Fertilizer International sat down with Nicolas White, TKInt’s Portfolio & Knowledge Director, earlier this year to discuss these strategic developments and more.
Operating globally, advising locally
Nicolas, when we last spoke, your EVP, Geert Gyselinck, emphasised the importance of knowledge to the business by saying, “Tessenderlo Kerley International, although a globally connected business, still works and acts locally.” Is connecting growers with knowledge still central to the company’s approach?
That’s the model we’ve continued to follow – and have taken one step further now. In some countries, where the market is growing, we’re starting to recruit technical sales advisors which, we believe, will get us even closer to the market and growers.
These are people who have dual role, coupling agronomy knowledge with sales skills. In Mexico now, for example, where we have quite a big team, we have technical sales advisors operating at a local level supporting customers very closely.
To be clear, our role remains not to sell products [directly] to the end-user. Instead, our aim is to work with distributors and assist in sales creation – that’s really the role of technical sales advisors.
Transmission of knowledge ensures our global strategy, the way we want to develop products, cascades down into local markets. That makes sure the way we’re developing a product like Thio-Sul® in France is similar to the approach taken in countries like Bulgaria and Romania, for example.
We create information globally about our products and their use on crops. But that knowledge will always have to be tailored to the local needs of the market, the climate, the soil type, fertilization practices etc. So part of the challenge is providing our local teams with a toolbox they can use and adapt to the growers in their particular countries.
Moving into new markets
Is TKInt continuing to successfully expand its liquid fertilizer portfolio in new countries – I was thinking of the recent introduction of liquids into the Ukrainian market.
You’re absolutely right: it was a key part of our strategy to develop [our portfolio] eastwards. The potential for Thio-Sul® in some eastern European countries is huge, simply because of the areas of field crops. Unfortunately, the conflict between Russia and Ukraine has made that more complicated.
That said, the Ukrainians have been very resilient. We have our own staff on the ground in that country now, including a technical sales advisor, and they’ve been getting on with business as usual, or as usual as it can be.
In Western Ukraine, we’ve been able to move volumes of Thio-Sul® into the market. Our chosen partners are working with us to develop Thio-Sul® in combination with urea ammonium nitrate (UAN) and that’s going very well.
We have high aspirations for Thio-Sul® because it is used in the field crops. That obviously represents a very big area, particularly in Europe. This is why we’ve gone ahead with the building of the second Thio-Sul® plant in Geleen which should come on stream quite soon now.
In the other countries, where the emphasis is more on cash crops, we’re focusing on [marketing] calcium thiosulphate [CaTs® ] and potassium thiosulphate [KTS® ]. That work is progressing nicely as well – even though it’s still in its infancy in certain new markets.
In countries like South Africa and India it took more time to obtain the homologation [official approval] to place products on the market. That normally involves field trials which take one or two years. It’s only when that initial groundwork was done that we could really start to push products into these markets. We’re very actively involved in that [process] right now and getting good results.
Thiosulphates – the soil activator
As with SoluPotasse® , our water-soluble SOP product, KTS® is principally going into the drip irrigation, fertigation market. The opportunity for our teams is to, firstly, sell the benefits of liquid fertilizers – and there are numerous benefits – and, secondly, to sell the benefits of applying sulphur in thiosulphate form.
Thiosulphate is a uniquely different and a much more active form of sulphur, if you compare it to sulphur-bentonite or sulphate [fertilizers]. We’ve heard a lot [at the New AG International conference back in April] about the importance of micronutrients. Well, some of my colleagues refer to thiosulphate as a soil activator because it can help make both micronutrients and phosphate more available to the plant under certain conditions.
You’re not just getting the benefit of sulphur – which is present in two forms in thiosulphate and released throughout the season. One form is quickly converted to sulphate and made available to the plant, while the transformation of the other form takes longer giving a regulated release effect. Additionally with thiosulphates the effect of these processes is to help liberate soil micronutrients too through a redox effect.
The best of both worlds?
One of the perceived strengths of TKInt is that you’re able to use SOP’s global product coverage to help introduce liquid fertilizers to new markets, while also taking advantage of locally embedded liquid fertilizer expertise to the benefit of SOP sales. Has this ‘best of both worlds’ concept been working well?
Yes, combining two product portfolios does help us to create and maintain a larger team on the ground. That said, the two parts of the portfolio are at very different stages in the life cycle, with thiosulphates being relatively new to the market and SOP more well known. So, when it comes to development work, a lot of our effort is focused on thiosulphates – because these products need to be explained to growers and distributors.
We’re recognised in the market as a preferred partner when it comes to SOP. There are cheaper, inferior alternatives. But customers won’t get the consistently high quality, a reliable product supply and the agronomic support we pride ourselves on. As always, you get what you pay for!
Improving affordability spurs demand
We’ve seen unprecedented market conditions since 2019. How has TKInt adapted and continued to do business in the volatile circumstances which have become the new reality in recent years?
Recently, we’ve had a levelling out of prices and, as affordability becomes better, growers start to go out and buy fertilizers with confidence. We have seen that [trend] reflected in the market – particularly in the water solubles segment – from the end of 2023 and into 2024.
This year, there’s been a rapid rise in demand for water-soluble fertilizers which at the moment are going very strongly. In fact, demand probably outstrips supply – which brings with it additional challenges.
If you look at our liquid products, which as you know are in a high value market segement, then in terms of volume they’ve not been as affected [by market volatility] as commodity fertilizers.
Astute investments, smart agreements
Over the last couple of years TKInt has successfully pursued investment in new production capacity, transshipment and storage assets, and secured production offtake agreements, as well as product sales and marketing rights. Are these moves part of a conscious strategy to bolster your market position and respond to demand for products like water-soluble SOP and Thio-Sul® ?
We’ve always been recognised as market leader in the water-soluble SOP segment. We have a product at the top end of the range when it comes to quality, plus a very good position in most markets.
We’ve also seen competition increase over the last decade. So, of course, we will take steps to defend our position.
So, yes, it is a strategy to secure and strengthen what we believe is already a solid position.
In that context, it made sense for us to link up with production from Kemira at Helsingborg, Sweden, because they, like us, have a very good quality product. That provides us with a degree of flexibility and allows us to have more product in our hands in what is a consistently growing market.
If you look at the thiosulphate portfolio, the other high-volume product for us is Thio-Sul® . A lot of our bets for the future, therefore, are on both solid potassium sulphate and liquid thiosulphate. Hence that’s why you’re seeing a very conscious effort to invest in Thio-Sul® as a brand, Thio-Sul® as a product, the new Thio-Sul® production unit in Geleen, and the marketing agreement for ammonium thiosulphate supply with Esseco in Italy.
Again, these moves give us a good footprint across markets plus a degree of flexibility. That’s very important for liquids when you want to deliver those to different points in the market and countries across Europe.
Linking up with urea ammonium nitrate (UAN)
Are the investments in Thio-Sul® linked to the strength of the UAN market within Europe as well?
Everybody now is talking about improving nitrogen use efficiency. Many countries are limiting when and how much nitrogen can be applied, meaning growers are having to look for more technical solutions for applying nitrogen – including UAN.
We believe that UAN combined with ammonium thiosulphate, which is a great concentrated source of liquid sulphur, will help make a difference because the nitrogen/sulphur balance is very important in many crops. You also see in scientific publications many reports of ammonium thiosulphate acting as a nitrogen stabiliser with the ability to inhibit urease and nitrification reactions.
That’s recognised in the literature and we are in the process of trying to get these effects homologated [officially authorised] in certain European countries – which will then allow us to develop that [nitrogen stabiliser] use with UAN manufacturers and suppliers.
So, in future, not only will Thio-Sul® bring concentrated liquid sulphur, we should also be able to capitalise on its inhibition properties.
Sustainability matters
Is TKInt prioritising sustainability, given its overarching importance now?
You can’t ignore sustainability as in the future it will become a license to do business for fertilizer manufacturers. Our production colleagues are therefore examining very closely how we can improve the sustainability of both our thiosulphate and SOP production.
For SOP, we’ve now converted many of our Mannheim furnaces from heavy fuel to gas, a much more efficient source of energy. We’re also investigating alternative carbon neutral/free energy sources for the furnaces. Our Ham production site in Belgium also generates enough low-carbon electricity, from a sulphuric acid plant, for more than 30,000 households.
For the total carbon footprint, there’s production emissions and agricultural emissions from when products are used on farms. I think what’s important for the industry is to calculate carbon footprints in exactly the same way.
There are standard carbon footprint methods out there now and companies that will audit and accredit carbon calculations. We’ve invested a lot of time and effort over the last year in doing just that for our SOP production.
If you use the same methodology, following the recognised rules, we’re confident our carbon footprint for SOP production at Ham is good – with our Mannheim process certainly no worse than many other processes – and that we can likely improve on that footprint in the future. Also, at farm level, SOP remains a very good product for sustainable agriculture.
SOP is nitrate-free, meaning that you don’t have the potential problems associated with nitrate leaching, nitrification and the release of greenhouse gases. The fact that it’s essentially chloride-free also means that SOP can be used in regions of the world at risk from salinity.
These are key features that our whole portfolio shares and – we believe – very important attributes for more sustainable types of fertilizer.
