Farming: Closure heightens fertiliser shortage production fears

Growers’ concerns over fertiliser prices and supplies have been further heightened by reports that a consortium bid to purchase a manufacturing plant ear-marked for closure as a going concern had fallen through.

CF Fertilisers

In recent years the majority of the UK’s domestic ammonium fertiliser has been produced by US-owned CF Fertilisers which closed down production at its two production plants last year due to the high costs of natural gas used to fuel the process.

The closures gathered considerable media attention as it also affected supplies of carbon dioxide – a by-product of ammonium fertiliser manufacture – with far-reaching consequences for several other sectors.

Following Government intervention, the CF plant at Billingham in the north of England restarted production of both fertiliser and CO2 later in the year. However last month the company revealed that it was set to permanently close its other plant at Ince in Cheshire and focus production solely at Billingham.

Speaking at the time Brett Nightingale, managing director, CF Fertilisers UK said the company saw considerable challenges to long-term sustainability of the two-site approach.

“Following a strategic review of our business, we believe that the best way to continue our legacy of serving customers in the UK is to operate only the Billingham manufacturing facility moving forward while addressing cost pressures throughout our business.”

The Ince plant also produced compound fertilisers which saw the ammonium nitrate blended with phosphate, potassium and sulphur - but the firm indicated that such operations were currently economically unviable.

However the news of the plant closure prompted the formation of UK Nitrogen, a consortium of investors led by the former head of the Army, Lord Dannatt, to work on a bid for the Ince plant with the intention of keeping it running as a going concern.

It is understood that the consortium sought a £10 million loan from the UK Government to help purchase the plant, on the understanding that the loan would be repaid in full. However reports indicate that while the bid met with some sympathy from Defra, the Treasury was unwilling to fund the initiative, with the Government indicating it was a “matter for the market to decide”.

But while alternative funding was believed to have been secured, the consortium’s efforts to buy the plant were yesterday reported to have collapsed. And while CF conceded that it had spoken with several parties it only went as far as stating that so far none of the offers appeared likely to secure the long-term future of the Ince manufacturing facility and its employees

And while some sources suggested that an alternative buyer for the Ince plant could be viewed as competition to CF, the English NFU expressed fears that the plant’s closure could impact on the availability of key crop nutrients – not just nitrogen- to UK farmers.

“The government must undertake an impact assessment from a loss of supply and replacement perspective, so that growers can start to make informed decisions when purchasing new season supplies,” said NFU Combinable Crops Board chair, Matt Culley .