- CEO Letter
- Leadership
- Ways to Win
- 2017 Highlights
When CF purchased Terra Industries, we added a nascent diesel exhaust fluid (DEF) business of 8,000 urea-equivalent tons of sales to our portfolio. DEF reduces NOx emissions and improves fuel efficiency, and is now required in all heavy-truck engines built in North America in order to meet emissions regulations. As a result, DEF consumption is growing by 10 to 15 percent per year. To meet this growing demand, we focused the right resources on business development, executing an effective marketing strategy and investing in production reliability. In 2017, we completed a new 400,000 urea-equivalent ton per year DEF unit at our Donaldsonville facility on time and under budget, with returns well above our cost of capital. We also expanded our DEF rail car fleet and storage tanks. Sales of DEF were 400,000 urea-equivalent tons in 2017 – a 75 percent compound annual growth rate since 2010 – and we are now the largest and most reliable supplier of DEF in North America.
We sell our products to maximize our overall system margin. Our optionality – the ability to change our product mix and move product to multiple destinations quickly – gives us more choices for where, when and at what price to sell our products.
Our superior logistics capabilities ensure we can distribute product to meet customers’ needs precisely when demand arises. In North America, we have access to more than 3 million tons of storage space, all the Class 1 railroads and both of North America’s major ammonia pipelines. We also have more capacity for river loading than any other company.
Our Donaldsonville complex alone provides significant optionality to our system. With six ammonia plants, five urea plants and three UAN plants, we are able to shift production among our major products within hours. It has docks that can serve river barges, ocean barges and deep-water vessels, giving us maximum flexibility on product destination.
These destinations include regions outside of North America if we so choose. Over the last five years, our sales team has invested in growing a global portfolio of customers to whom we can sell ammonia, urea or UAN in order to maximize system margins. In 2017, these efforts enabled nitrogen manufactured in Donaldsonville to be sold on six continents. This included first time nitrogen sales into China and Taiwan. We also are one of the largest suppliers of nitrogen to South America and a leading supplier of UAN into Europe.
