Rentech has merged with CVR

East Dubuque EDNFLogoCVR Partners closed its merger with Rentech today, giving birth to a new subsidiary, East Dubuque Nitrogen Fertilizers, LLC, which will now operate the nitrogen plant in East Dubuque, IL.

CVR Partners previously ran just one nitrogen plant, the Coffeyville, KS, ammonia-UAN plant, which gets its pet coke feedstock from its sister refinery (owned by CVR Energy, the parent company of CVR Partners).

So, this merger “provides the partnership with an expanded geographical footprint, diversification of its raw material feedstocks, wider customer reach and greater potential for cash-flow generation.”

The impact on market share looks significant at first glance …

US ammonia market share 03312016

… with the post-merger CVR Partners positioning itself with 5.5% of the US market share (by ammonia capacity).

US ammonia market share 04012016

However, this post-merger chart could be misleading for a number of reasons.

First, it only counts US plants, so excludes the significant number of Canadian and Trinidadian assets owned by the competition – product from which plays a large part in shaping the US ammonia industry.

Second, even these market share gains will be short-lived, with LSB Industries, OCI Nitrogen, and Dyno Nobel all poised to commission new plants this year – each of these will overtake CVR once those plants are operating.

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