Read the ProjectN FAQ
Be sure to check out What’s This All About?
for answers to general questions and the Fertilizer Facts
section for data that helps understand the business case.
Q: What are Members being asked to do?
We need you to show your commitment in a tangible way
by purchasing a seed capital unit in FNA Fertilizer ULC in the United States or FNA Fertilizer Limited Partnership in Canada. Completing the expression of interest form is an important also an step. To take on a venture like this takes millions of dollars, and several levels of financing and partners. Those with the kind of financing capital needed to make this project a reality are looking to see that farmers are involved.
To join ProjectN right now, Click on Let’s Build It! and, fill out our Expression of Interest form to help establish the base of support for building a plant. Or call your FNA Member Service Representative to show your commitment.
Q: What is FNA Fertilizer Limited Partnership?
A: To facilitate the seed capital raise and to further progress ProjectN, a new business has been created, called FNA Fertilizer Limited Partnership (FNA FLP). The FNA Fertilizer Limited Partnership is a standalone, independent legal partnership of those farmers who choose to participate.
Q: What is FNA Fertilizer Limited Partnership?
A: To facilitate the seed capital raise and to further progress ProjectN, two new businesses have been created, called the FNA Fertilizer ULC (FNA ULC) in the United States and FNA Fertilizer Limited Partnership (FNA FLP) in Canada. The two businesses are together “ProjectN” and represent the common will of farmers in the United States and Canada to build a fertilizer plant, capturing the significant profit margins they themselves generate through their use of nitrogen fertilizer. Each business is a standalone, independent legal entity of those farmers who choose to participate.
Q. I'm not a Member of FNA. How can I participate?
Because it is the Membership dues of FNA Members that have allowed the project to be developed thus far, we are committed to ensuring that Members derive preferential benefits from the project. So at this stage only FNA Members are being allowed to get in on the ground floor with ProjectN. If you are a farmer, you can participate by first joining FNA
. For non-farmers, there may be other ways of participating, depending on how much equity is taken up by Members and on the needs of our business or institutional project partners. But the extra benefits of being in ProjectN do not make sense for a non-farmer (you don’t use fertilizer) and must go preferentially to the people who made the project possible.
Q: What are Seed Capital Units?
Seed Capital Units are the initial type of equity interest in ProjectN. When you subscribe
, you become a Partner in the U.S. or Canadian ProjectN business. This North American initiative is completing the initial investigation and structuring stages of the nitrogen fertilizer plant development. It is also expected that ProjectN will hold the farmers’ combined interests in the entity that will own the nitrogen fertilizer plant. It is also expected to use its position, with the combined ownership and volume fertilizer use of the farmer partners, to negotiate preferential terms for secure, stable access, and price offsets that will reduce the cost of fertilizer for partners. (Note, we say “offsets” because the greatest benefit may not be gained by trying to directly intervene at the price level, but through other mechanisms that translate into lower fertilizer costs.)
The Seed Capital Unit funds will be used to complete the project to a stage where we can present to farmers, lenders and other parties a full investment proposal for subsequent and more substantial rounds of financing that will finance the actual building and operation of the fertilizer plant. The seed capital funds will go to paying for activities like environmental studies, civil and environmental engineers, securities-related regulatory costs, and legal fees. We are engaging experts that will review and advise the best investment models to make this proposal work, provide access to key relationships and develop a project model that is both financeable and profitable.
There are two series of Seed Capital Units issued in the FNA Limited Partnership: Series 1 Seed Capital Units and Series 2 Seed Capital Units. See the discussion below under “What if you decide to not go ahead after the seed capital is raised” for more information on the differences between the two series of Seed Capital Units.
Q: How much does a Seed Capital Unit cost?
A: A Seed Capital Unit costs $1,000 per unit. You can contribute in multiples of $1,000, up to a maximum of ten.
Q: Why can I only buy 10 Seed Capital Units?
A: While we need the seed capital investment to cover the costs associated with project development, we also want to provide as many people as possible with the opportunity to participate.
Q: What do I get for my seed capital money?
You will get an interest in the ProjectN business — in FNA Fertilizer ULC if you are a U.S. farmer or in FNA Fertilizer LLP if you are a Canadian farmer . When the nitrogen fertilizer plant project proceeds, participation in ProjectN will allow farmers certain benefits. The nature of such benefits have not yet been determined, but may include: the right to make an early equity investment in the fertilizer plant on preferred terms; MPower Rewards or rebates on products provided through FNA suppliers; or discounted pricing on fertilizer produced by the plant.
Participation in ProjectN will also eventually allow farmers access to a secure supply of nitrogen fertilizer once the fertilizer plant is built. The details of these benefits are still being resolved and will only proceed on the basis of farmers having already demonstrated their commitment substantively.
Q: What has been accomplished to date?
- The plant site has been selected at Belle Plaine, Saskatchewan with access to some of the world’s least expensive natural gas supplies, extensive existing infrastructure including pipelines, road and rail transport, accessible water supply, stable regulatory environment and supportive governments.
- The Bankable Feasibility Study (BFS) has been completed, which is an extensive document containing business and financial modeling sufficiently compelling that it qualifies as “bankable” by the financial experts.
- The required (by government) Technical Project Proposal which includes environmental studies and other regulatory data has been completed.
- Over 2,500 farmers have backed the project investing in more than 9,000 Seed Capital Units.
- Key actions were taken early, such as engaging capital development, engineering, legal and business modeling partners.
Q: What information can farmers expect to receive as holders of Seed Capital Units?
A: ProjectN investors will be provided ongoing updates from time to time as to the progress being made on the project, usually in the form of emails or notices to log in to portions of the project website reserved solely for holders of such interests. As an FNA Member, you have daily access to your Member Services Rep, so you can just call if a question comes to mind.
Q: Is this a guaranteed investment?
A: The Seed Capital Unit investment is risk capital, and the funds collected are being spent on the type of preliminary activities and investigations that are necessary to confirm the financial viability, structure and nature of the project and to bring in additional third parties. There can be no guarantee that the nitrogen fertilizer plant will be built.
Q: What still needs to be accomplished?
- A number of government permits have to be obtained and we need to book long term lead items.
- The Front End Engineering Design (FEED) has to be completed.
- The Offering Memorandum has to be finalized.
- The equity capital for the farmer ownership must be raised.
- We are in the process of selecting a strategic partner to provide capital investment not taken up by farmers.
Q: What portion of the plant will farmers own?
A: This is entirely in the hands of Members. There is no cap on the share of the plant owned by farmers. The more farmers participate, the larger share farmers will own. The project is developing financing options for Members to strengthen their ability to take as much of the equity as possible. At the same time, serious equity and debt participation by major industry and institutional players is being prepared. Exactly what piece each party owns will be determined only after Members have been given a full opportunity to make their own decisions.
Q: Who will operate the plant?
A: FNA Ferilizer LP will be managed by a General Partner that will be a distinct corporation under common control with FNA. It will be staffed by senior individuals from FNA to ensure that it maintains an overall unity of purpose with FNA and its Membership.
Q: What does FNA have to gain from this?
The primary reason for the FNA farmers’ business alliance to do this is to provide an opportunity for Members to benefit from the profits in fertilizer manufacturing. FNA is responding to our members who have asked us to get involved. We help improve profitability in ten key areas, and fertilizer is at the top of the list.
There are additional benefits to this project for FNA, which include:
- Increased support from existing membership for leading this project.
- New membership growth. We expect to see the Membership grow significantly, with new Canadian and U.S. farmers participating in FNA. As FNA gains more members, it will be able to take on more projects like this for its members.
- Increased attention in the industry that may lead to other opportunities for members.
Q: Who should I make the cheque payable to?
A: FNA Fertilizer Limited Partnership or just FNA Fertilizer LP.
Q: Can I pay by credit card?
A: Yes. We will accept AgriCard, John Deere Financial (JDF), VISA or MasterCard without surcharge.