Strategic Locations
We have a regional advantage with our strategically located facilities. Our nitrogen fertilizer facilities, located in Coffeyville, Kansas, and East Dubuque, Illinois, provide geographical advantages in that we are located in the U.S. Farm Belt and Mid Corn Belt regions. As a result of our close proximity to these agricultural markets, we are able to cost-effectively sell substantially all of our products at a high margin, whereas a significant portion of our competitors’ revenues are derived from the lower-margin industrial market. In addition, our on-site storage facilities allow for better timing of product pickup and application by customers across both regions.
Our Coffeyville fertilizer plant’s close location to the Union Pacific main line increases our transportation cost-advantage by lowering the costs of bringing our products to customers. Our products leave the plant either in trucks for direct shipment to customers, incurring no transportation costs, or in railcars for destinations located principally on the Union Pacific Railroad. We do not incur any intermediate transfer, storage, barge freight or pipeline freight charges.
Our East Dubuque fertilizer plant primarily sells its product within 200 miles of the facility as Illinois and Iowa are the two largest corn producing and nitrogen fertilizing consuming states. The plant also benefits from its location on the Mississippi River and its direct access to a barge dock as well as the nearby rail spur serviced by the Canadian National Railway Company. In most cases, customers purchase nitrogen products form the facility and then arrange and pay to transport the products to their final destination by truck. As a result, the plant generally does not incur shipping costs.