Terra Industries Inc. (NYSE:TRA)
Industry: Basic Materials
Terra Industries Inc. (Terra) produces and markets nitrogen products for agricultural and industrial markets with production facilities located in North America and the United Kingdom. Terra operates in two principal industry segments: Nitrogen Products and Methanol. The Nitrogen Products business produces and distributes ammonia, urea, nitrogen solutions, ammonium nitrate and other nitrogen products to agricultural and industrial users. The Methanol business manufactures methanol, which is principally used as a raw material in the production of a range of chemical derivatives and in the production of methyl tertiary butyl ether, an oxygenate and octane enhancer for gasoline. Nitrogen Business Terra is a producer and marketer of nitrogen products, principally fertilizers. Terra upgrades a significant portion of the ammonia it produces into other nitrogen products such as urea, ammonium nitrate (AN) and urea ammonium nitrate solutions (UAN). Ammonia, AN, urea and UAN are the principal nitrogen products the Company produces and sells in North America. Terra produces and sells primarily ammonia and AN in the United Kingdom. The Point Lisas production facility in Trinidad and Tabago provides ammonia for sale into both the United States and international nitrogen markets. Other products Terra manufactures include nitric acid, dinitrogen tetroxide and carbon dioxide. These products, along with a portion of Terra's ammonia, AN and urea production, are used in non-agricultural applications. In 2003, Terra formed its Terra Environmental Technologies division to provide products and services to customers using nitrogen products (primarily ammonia, aqua ammonia and liquid and dry urea) to reduce nitrogen oxides emissions from various sources, including power plants, and in other environmental processes such as water treatment plants. Although the different nitrogen fertilizer products are interchangeable to some extent, each has its own characteristics which make one product or another preferable to the end-user. Terra's plants are designed to provide the fertilizer products preferred by end users in the regions in which they are located. These preferences vary according to the crop planted, soil and weather conditions, regional farming practices, relative prices, and the cost and availability of storage, handling and application equipment. During the year ended December 31, 2005, Terra produced approximately 2,795,000 tons of ammonia at its North American facilities and approximately 758,000 tons of ammonia at its United Kingdom facilities. The Company is obligated by contract through 2018 to purchase one-half of the ammonia produced by Point Lisas Nitrogen Limited, Terra's ammonia production joint venture in the Republic of Trinidad and Tobago, at a discount to market, subject to a minimum price. In 2005, Terra purchased approximately 359,000 tons pursuant to its contract with Point Lisas Nitrogen. Terra sold a total of 1,898,000 tons of ammonia worldwide in 2005 and consumed approximately 2,507,000 tons of ammonia as a raw material to manufacture its other nitrogen products. Terra produced approximately 4,206,000 tons of UAN at its North American facilities, in 2005, and sold approximately 4,368,0000 tons of UAN in 2005, primarily to United States fertilizer dealers and distributors. The Company produced approximately 643,000 tons of solid AN at its Yazoo City, Mississippi facility and approximately 1,054,000 tons of solid AN at its United Kingdom facilities, in 2005. During this same period, Terra sold approximately 672,000 tons of AN in the United States and 909,000 tons in the United Kingdom. In 2005, Terra produced approximately 235,000 tons of urea and urea liquor, all of it at North American plants. The Company also sold approximately 247,000 tons of urea and urea liquor. In 2005, Terra produced approximately 893,000 tons of nitric acid worldwide. Approximately 320,000 of these tons were sold to industrial users and the remainder was used as a raw material for the production of the Company's other nitrog
As Of: 10/07 00:00 ET
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