TESSENDERLO KERLEY Jordan Burns EVP Tessenderlo Kerley
Because every molecule counts
• 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
TKI’s unique attributes
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MEGA-CHALLENGES OFFER OPPORTUNITIES FOR TKI
Tessenderlo Kerley
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“ 7 billion people to feed today with
2 billion more to join by 2050
70% more food needed ”
Source: UN
The Challenge
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
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Raw Materials
• Hydrogen sulfide, sulfur
and a small percentage of
ammonia are sourced
through the environmental
service that TKI provides
to the refinery
Tessenderlo Kerley
• 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
TKI produces sulfur-based liquid fertilizers
Refinery Services
Key Products
Distribution End-use
• Extensive terminals
(60+) and transporters
(truck and rail) ensure
supply continuity
• Proper plant nutrition
leads to higher plant
yields and added
nutritional
consumption benefit
to humans and
livestock
8 Source: Kerley
• Liquid thiosulfates
• Slow release
nitrogen
(Triazone®)
Replace photo
(RS2)
Replace photo
(RS3)
Replace photo
(RS4)
Replace photo
(RS6)
Replace photo
(RS7)
Tessenderlo Kerley footprint
Plant New project Tolling Admin
2011 Net Sales
€ 271 m REBITDA
€ 66.5 m
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Ham, Belgium
Bahrain joint venture
Izmir, Turkey
Finley, WA
Billings
Burley, ID ATS (under const)
Phoenix, AZ Corporate
Tucson, AZ R&D Lab
Carlsbad, NM TKS Office
Eufaula, AL
Coffeyville
Fresno, CA
Garry Williams Wynnewood
ATS expansion
Agriphos
Mc Pherson
Ponca City
Mining
Markets: agrochemicals, industrial
Refineries
H2S, SO2 recovery production and distribution of S-derivatives
Regeneration
service steam
improved compliance
Sell products
Waste
streams
containing
H2S
Service
fee
capital
Revenue
Unique business model giving strong competitive advantage Value proposition
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• Backward integrated into raw materials
• Economies of scale
• Largest North American non-integrated KOH consumer
Low cost
producer
• Unparalleled range of sulfur-based liquid fertilizers
Product
portfolio
• Kerley is the market leader Image
• Refinery Services – Kerley's strength is its operating history and the
Tail Gas Technology that provides regulatory compliance
• Niche liquid fertilizer know-how
Know-how
• Strategically located distribution terminals
• Extensive rail and truck networks
Logistics
set-up
Source: Kerley
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Competitive strengths
• 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
Description Name
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Products & applications
Source: Kerley
13 Source: Kerley
ATS KTS CaTS MgTS Triazones
Barley
Corn
Grapes
Oats
Peanuts
Potatoes
Nuts
Soybeans
Wheat
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Products & applications
14 Source: Kerley
ATS KTS CaTS MgTS Triazones
Flowers
Cotton
Orchards
Sorghum
Sugar Beets
Tobacco
Tomatoes
Vegetables
Watermelons
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Products & applications
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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
Strategy - Kerley
Tessenderlo Kerley
HOW NOVASOURCE IS SEIZING OPPORTUNITIES
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• 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
NovaSource expertise & excellence
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NovaSource core activities
Regulation ensures control across value chain
Raw materials
Sourcing of basic raw materials
Activity
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The ownership of registered labels and regulatory dossiers creates barriers to
entry and allows NovaSource to support and expand uses (create value)
Intermediate production
Processing basic raw materials into key building blocks
Commer- cialization
• Sales • Marketing • Development • Registration • Regulatory
defense
Finished good production
• Formulating end use products (Mixing ai’s with diluents and carriers)
• Packaging
Distribution & End-use
• Distribution • Warehousing • Pest control advice • Application of
products
Finished active ingredient prod.
Synthesizing finished active ingredients (AI’s)
Crop protection product value chain
• Fumigants
• Low-cost integrated model
• Recognized brand
• Sold through distributors
• Toll manufacture for competitors
• Strong logistical advantages
• One of 3 players in the US
• Niche Pesticides
• Low cost structure
and streamlined supply chain
• 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
Competitive Position
Manufacturing Locations
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
Mark
et
Att
racti
ven
ess
Competitive Positioning
Niche
Pesticides
Plant
Protection
Soil
Fumigants
NovaSource’s markets and locations
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2010 2011 2009 2007 2008 2006 2005 2000 1999
Niche Pesticides
Plant Health/Pesticides
Soil Fumigants
• Registration
of Sectagon®
- K54
• Acquisition of
Surround®
from BASF
• Acquisition of
Sectagon
42®
• Acquisition of
Sinbar® WDG
from DuPont
• Fosetyl aluminum
(Linebacker®,
Autograph®
and Flanker®)
registered for
the US market
• Fluridone
(Whitecap®)
registered for
the US market
• Acquisition
of Linuron
(Lorox®,
Linex®),
from DuPont
• Acquisition of
Carbaryl®
from Bayer
Cropscience
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Significant growth in the NovaSource product portfolio since 2007…
Source: NovaSource
NovaSource product line introduction/acquisition overview
• Acquisition of
Purshade®
from Purfresh
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• 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
NovaSource Competitive strengths
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• 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
Strategy - NovaSource Long-term growth and sustainability
POSITIONED FOR GROWTH
Tessenderlo Kerley
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A strong growth momentum
REBITDA
Revenue
Sustained profit growth from executing focused strategy
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24.6%
194.1 180.0
231.4
270.8
33.5 38.0 47.6
66.5
2008 2009 2010 2011
20.6% 21.1% 17.3%
Million Eur
REBITDA
Margin
Complementary expansion opportunities exist in new products, services and regions
• Other sulfur-based liquid fertilizers
• Complementary technologies to treat hydrocarbon
streams delivering marketable by-products
Global
expansion
in existing
products
Adjacent
products
and
services
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• Replication of Kerley’s current business model in
international markets
• Initial focus in regions that have similar crops and
infrastructure to North America
HIGHLIGHTS Tessenderlo Kerley
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• 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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Highlights
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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
THANK YOU Tessenderlo Kerley
Jordan Burns EVP Tessenderlo Kerley
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