Planned Grand Forks fertilizer plant expands shareholder driveVALLEY CITY, N.D. (AP) — A company planning a $1.7 billion fertilizer production plant in Grand Forks is expanding its shareholder drive to include farmers and other investors.
VALLEY CITY, N.D. (AP) — A company planning a $1.7 billion fertilizer production plant in Grand Forks is expanding its shareholder drive to include farmers and other investors.
Darin Anderson, a Valley City farmer and chairman of the managing partners for Northern Plains Nitrogen LLP, told Agweek that the company has been able to publicly offer shares to a limited group of investors.
The company is offering up to 1,800 seed capital units, or shares, to accredited investors. The price is $5,000 per unit, with a minimum investment of $15,000. Once the project is fully funded, the units would each be worth three common shares.
An accredited investor must have $1 million in net worth or annual income of $200,000 or more, or joint income with a spouse of $300,000 or more per year.
Northern Plains Nitrogen is seeking at least $3 million and up to $9 million in the shareholder drive.
Anderson said the purpose of the project is to ensure an adequate supply of nitrogen fertilizer for the Upper Midwest and Canada and to offer a hedge for farmers and others against high nitrogen fertilizer prices.
The company doesn't promise any particular return-on-investment range, but Anderson said the company's research indicates the historical industry average returns have been 10 to 15 percent annually. That return depends on many variables, including the prices of natural gas and fertilizer, he said.
"Anyone in the United States could invest in this, but I think — just because of the location we're at — people in the northern Plains are going to be interested in investing in this because they'd be the producer or individual that is mostly affected by it," Anderson said. "But that doesn't mean a person in Texas couldn't invest in it, just to hedge their nitrogen costs."
The plant, expected to open in 2017, plans to use natural gas through an existing pipeline near the site or directly from the oil patch through a proposed pipeline.