FEECO

INTERNATIONAL, INC.
3913 Algoma Road Green Bay, Wisconsin 54311-9707 920-468-1000 Fax: 920-469-5110 USA

December 9, 2006

Attention:

Subject: Process Audit Report

Dear Mr. :

FEECO International, Inc. is pleased to present this report summarizing our process audit
of your existing NPK complex fertilizer operation at .

NPK PRODUCTION PLANT PROCESS AUDIT

On Wednesday November 8th through Saturday November 11th, 2006 Ted Vanegeren
and Walter Hawkins had the opportunity to observe the plant system while operating
under typical conditions. The purpose of this process audit had many desired objectives
as detailed below, but in simple terms was to observe the current operation and make
recommendations for its potential improvement. The following brief report will highlight
our observations and recommendations. We would like to acknowledge early in this
report some valuable input we have received from of IFDC who had significant
experience in this very plant several years ago.

Objectives

• Increase capacity from present 310,000 MTY to desired 360,000

• Reduce dust emissions in both plant stacks and in general improve plant hygiene
in an attempt to bring it in compliance with most current international standards
• Improve Nitrogen efficiency and recovery
• Improve NPK physical quality, reduce caking tendency and improve size
distribution and hardness
• Reduce energy consumption in blowers and material handling equipment
(crushers and belt / screw conveyors)
• Simplify plant layout to reduce energy and maintenance costs
General Observations
FEECO
INTERNATIONAL, INC.
3913 Algoma Road Green Bay, Wisconsin 54311-9707 920-468-1000 Fax: 920-469-5110 USA

We began the field study by having general discussions with many of the staff at
to determine what the problem areas of the plant are. We tried to gather all points of
view as to these problems from many different perspectives including maintenance,
process engineering and production. We tried to compile our initial thoughts of the plant
based on these discussions and followed up with a walk through the plant. These initial
thoughts are important before studying actual designs and learning of plant history and
changes.

Our most significant opinions and thoughts of this plant are as follows:

Gas evolution from neutralizer

There was a high degree of gas evolution (largely ammonia) from the Neutralizer. This
struck us as an obvious place to capture and recover the ammonia and help improve the
plant nitrogen efficiency

All too frequent product changeovers

We were also surprised to hear of how often the plant will change a product grade. Your
current practice of changing product grades every two to three days strikes us as
excessive. We have been around many plants that make multiple products through
common processing lines, but it is typically done with longer runs of any given product.
If longer campaigns on a given product could be realized either through better scheduling
or more intermediate product storage, we believe many improvements would take place.

• There would be less down time due to less overall transitional time. We define
transitional time as the dead time between shutting down the line on one grade of
product to switch over to another grade and all the intermediate time while off
specification product is made in the transition. We understand these transitions
can take several hours until the plant is back on line at capacity making quality
product. If these changeovers could be reduced, immediate gains in yearly
capacity would be realized in more operational hours per year and could be a
significant increase in and of by itself.
• We do not know for certain, but strongly suspect that much of the plant damage
may be occurring during these transitional times between products. By damage
we are referring specifically to excessive amounts of material caking on the dryer
and cooler shells. We suspect that when the plant is making off specification
product that it may be stickier than normal product and during these times
contributing an unusually high amount of material build up in the dryer and
cooler.
FEECO
INTERNATIONAL, INC.
3913 Algoma Road Green Bay, Wisconsin 54311-9707 920-468-1000 Fax: 920-469-5110 USA

All too frequent shutdowns

We understand that the plant is shutdown every 45 days for maintenance. This
maintenance consists of the following:
• Clean out of fouled material from the dryer and or cooler
• Replace / Repair rubber liners in the granulator
• Repair screen attachment mechanisms

Based on our knowledge of similar plants, this is a very high rate of maintenance work.
As in the above, any days that you could produce rather than maintain, it would translate
to extra yearly capacity.

Excessive sticking problems

If there was one aspect to the plant that we would change if we could, it would be the
highly sticky nature of the material processed in the “Dry plant”. Certainly the chemistry
and physical behavior of the product may be sticky, but any modification to the product
or equipment that can affect the rate of fouling within the dryer would help the plant
immensely.

Recommendations
1. Dedicated scrubber for Neutralizer

The observation of ammonia escaping from the relief vent of the neutralizer is troubling
from an environmental and nitrogen loss perspective. It should also be an easily
remedied situation. The reason that gas can evolve at this point is simply that the gas
being generated or introduced exceeds the rate of gas taken by the scrubber. We suspect
the initial scrubber supplied for this vessel may well have been adequate for the duty but
when a second vent line servicing this scrubber (to serve the granulator), the capacity of
the scrubber proved inadequate.

We recommend dedicating the existing scrubber for the neutralizer only and then adding
a second scrubber dedicated only for the granulator. If you do not wish to add the second
scrubber at this time then we can make an intermediate suggestion of at least putting a
damper in each duct to the scrubber. In this manner you would be able to adjust flow to
the scrubber between the neutralizer and granulator. It may be with balanced flow, that
the scrubber is adequate. At present the scrubber receives more flow from the granulator
than the neutralizer (same duct size and longer run to neutralizer).

2. Agitator for Neutralizer

FEECO
INTERNATIONAL, INC.
3913 Algoma Road Green Bay, Wisconsin 54311-9707 920-468-1000 Fax: 920-469-5110 USA

The neutralizer initially had an agitator as one would expect. We do understand that this
was removed early in operation due to mechanical failure. We recommend however that
an effort be made to replace this vessel with an agitator or appropriate design. We
understand that there is some mixing and turbulence in the vessel due to the violent
reaction, but suspect it may not be as well mixed as desired. It is important to note that
there is no way to see in the vessel and observe the mixing whether good or poor.

We suspect that a better agitated Neutralizer vessel will potentially reduce the amount of
unreacted ammonia leaving the vessel and may also improve the degree of reaction of the
product. This we would expect of any improvement in any continuously stirred tank
reactor (CSTR) regardless of reaction. It is even our hope that a better reacted melt
might be better processed in downstream stages.

FEECO International, Inc. can provide a design and supply the hardware for a
replacement agitator that would be designed to withstand the duty and environment. Our
budget cost to supply such an agitator is $___________. Let us know if this is of interest
to you and we can provide a firm cost.

3. Use acid titration to adjust scrubbing liquor to slightly acidic

We recommend using slightly acidic water for the scrubber servicing the neutralizer.
This is the standard practice for ammonia capture. Just about any acid will work and the
dosage is a function of the acid used and the rate of ammonia capture.

Sulfuric acid will result in ammonium sulfate being captured

Nitric acid will result in ammonium nitrate being captured

This will improve on the environmental release of ammonia.

4. Seals on dryer and cooler

We observed that the dryer and coolers had next to nothing for seals between the rotating
cylinder and stationary hoods. This is probably not a significant issue right now, but by
adding seals to the dryer and cooler will reduce the flow of gas needed to be treated (for
future environmental compliance) by roughly an estimated 20%.

Our budget cost to provide seals for the dryer and cooler is $________. Let us know if
this is of interest to you and we can provide a firm cost.

5. Maximize dryer inlet gas temperature

FEECO
INTERNATIONAL, INC.
3913 Algoma Road Green Bay, Wisconsin 54311-9707 920-468-1000 Fax: 920-469-5110 USA

We noticed that the dryer currently runs with very low inlet gas temperatures. We fully
understand that the temperatures must be maintained quite low to avoid the
decomposition of ammonium nitrate. We merely want to remind you however that any
increase in this temperature for any given grade (without going as hot as to affect product
quality) will result in capacity and lower gas emissions for future treatment.

6. Atomized sprays (self cleaning design) for melt addition in granulating drum

We spent a great portion of our plant inspection observing the granulating drum. We did
so because the performance of this machine seemed to us to be the most likely improved
part of the plant. Further, any improvement made in the granulator would cascade down
to the operation of the dryer, screens and possibly even the cooler.

Our first observation was that the sprays look very poor. Ideally a granulator will operate
with a well atomized spray applied to the bed at a great many points. One very important
discussion we had was that the granulator used to operate at much lower recycle rates
when more sprays were used from actual nozzles.

The addition of sprayed liquid to the solids bed is imperative in determining how well a
granulator functions. Ideally we would like to see much better atomization (finer droplet
size) and many more spray points adding liquid to the bed in multiple locations of the
vessel. We strongly expect that with better melt atomization, the recycle load could be
greatly reduced and overall yields from the granulator will be increased.

We can fully understand why you have modified the design to the current design of a
pipe with (8) 0.23 inch diameter drilled holes. The fouling of nozzles must be eliminated
as a maintenance issue. We do however know that there are better designs than what you
FEECO
INTERNATIONAL, INC.
3913 Algoma Road Green Bay, Wisconsin 54311-9707 920-468-1000 Fax: 920-469-5110 USA

use today. We have attached some information from Spraying Systems who recommend
a “cleaning brush type design”. We are continuing to discuss other options with other
manufacturers and will follow with a more definitive recommendation and price in the
near future.

7. Rubber liner material for granulator

Another major problem you are having in the granulator is the short life for the rubber
panels. We have used a great many other materials for applications similar to this. We
would recommend an upgrade to _____________. Our budget cost to provide rubber
linings for the granulator is $_____________. Let us know if this is of interest to you and
we can provide a firm cost.

8. Anti slide lifters for granulator

We also observed another shortcoming of the granulator operation. The bed in the feed
section of the granulator appeared to largely slide on the surface of the rubber lining.
Ideally the bed would mix and tumble from an agglomeration standpoint. In the past we
have implemented anti slide or turnover flights in this early section of a granulator. We
would envision that such an internal “flight” could be fabricated to be part of the rubber
retaining clip. Our budget cost to design and supply such internals is $___________.
Let us know if this is of interest to you and we can provide a firm cost.

9. lifter design for dryer and cooler

The effectiveness of a dryer or cooler is almost solely determined by how well the solids
disperse and shower in the gas stream. For any dryer, this is determined by the lifter
design; number of lifters, size and shape of lifters. The optimum lifter design will always
change for different materials. In your particular case lifter design is difficult because the
feed is so sticky it is likely to foul lifters and clump amongst itself.

For this application we would recommend a multi phase lifter design. In the first third of
the dryer we would install 40 radial lifters, 8 inch tall. In the middle third of the dryer we
would install 30 single bend lifters, 18 inches tall. In the last third of the dryer we would
install 15 single bend lifters (18 inches tall) with alternating double bend lifters (another
15 in quantity) that would be about 20 inches tall.

As the material becomes more dried and free flowing along the length of the dryer, the
lifters can become more aggressive.
FEECO
INTERNATIONAL, INC.
3913 Algoma Road Green Bay, Wisconsin 54311-9707 920-468-1000 Fax: 920-469-5110 USA

A proper lifter design cannot completely negate the problems with processing a sticky
material, but it can improve the showering and heat transfer.

Our budget cost to design and supply such internals for the dryer and cooler is
$_____________. Let us know if this is of interest to you and we can provide a firm
cost.

10. Insulation for dryer

Most sticky materials do hot adhere is badly to a hot or warm metallic shell surface than
a cold ambient surface. We would recommend that you insulate the feed end section of
the dryer shell with some fiberglass insulation and cladding. You could do this as a
simple test basis in the beginning to see if it offers any advantages. We recommend
lining the first ten feet of the dryer shell and leaving the balance uninsulated. Then
during the normal maintenance cycle, observe the two sections (insulated and not
insulated) to see if there is any difference as to material adhered to the shell.

If this offers any reduction in fouling on the shell, it would be an easy and cost effective
way to reduce downtime and improve general showering and dryer performance.
FEECO
INTERNATIONAL, INC.
3913 Algoma Road Green Bay, Wisconsin 54311-9707 920-468-1000 Fax: 920-469-5110 USA

11. knockers for dryer

Much like the above two recommendations, anything that can be done to reduce the
material sticking to the shell and lifters (fouling) will greatly improve dryer performance.
Some materials are just by there very nature sticky and fouling will always be a factor.
In such cases a mechanical rap on the dryer shell (sometimes at many locations along the
dryer length) is the only way to help limit the degree of fouling and increase run time
between clean outs.

We do have some very affective mechanical knocker recommendations. Our budget cost
to design and supply such a knocker mechanism for the dryer is $_________. Let us
know if this is of interest to you and we can provide a firm cost.

12. Coating of feed to dryer

In other cases where a material being dried is just too sticky to avoid problems, a coating
agent can be added at the feed point of the dryer. This is exactly the same concept as to
what is done in the coating drum right after the cooler. It was our thought that perhaps
some of the coating agent be added in the dryer (to aid in the dryer performance) and a
lesser amount being added in the coating drum. Coating agents are typically inert clays
such as kaolin for purposes of improving dryer performance.

13. Scrubber for dryer and cooler

Your current practice of venting the dryer and cooler to a particulate cyclone and venting
to the atmosphere would never meet most international environmental standards for
FEECO
INTERNATIONAL, INC.
3913 Algoma Road Green Bay, Wisconsin 54311-9707 920-468-1000 Fax: 920-469-5110 USA

particulate emissions. The current best available control technology for this application
and industry would be to use a primary cyclone (as is in place today) and then follow
with a secondary venture wet scrubber. Much as was discussed in the above, the
scrubber would ideally utilize a slightly acidic water to reduce ammonia emissions.

We have contacted several scrubber suppliers and hope to have a recommendation for
you shortly.

14. Airlocks for cyclones

The performance of the existing cyclones could be greatly improved by adding airlocks at
the bottom discharge. At present some captured dust is being aerated and flowing up the
discharge tube of the cyclone.

We understand that rotary airlocks may be problematic, but there are other designs that
would be far more appropriate such as a double dump valve. Our budget cost to supply
double dump valves for the dryer and cooler is $_________. Let us know if this is of
interest to you and we can provide a firm cost.

15. Chain mill

When observing the granulator material bed, we noticed quite a bit of sliding for certain
grades of product. We strongly suspect that this may be due to over-grinding in the chain
mill. We recommend our model ___ chain mill for your application. Our budget cost to
supply two chain mills is $_________. Let us know if this is of interest to you and we
can provide a firm cost.

16. Screens

Your current vibrating screens in stationary housings are quite dated. The units are very
steep and the performance tested as poor. We would recommend replacing these units
with a more current design (see attached brochure from ______). We have contacted
several suppliers and will respond recommendations and pricing shortly.

17. Cooler

We find the cooler to be operating at roughly the theoretical maximum performance. A

new, larger cooler is certainly an option but we feel there is a better option. If an air
chiller were to be implemented to lower the inlet air temperature (even a few degrees in
temperature) the performance of the cooler would be greatly improved. The options here
are many. Perhaps one of the best options would be to use the cooler air conditioner as
an evaporator for liquid ammonia which would in turn make gaseous ammonia available
FEECO
INTERNATIONAL, INC.
3913 Algoma Road Green Bay, Wisconsin 54311-9707 920-468-1000 Fax: 920-469-5110 USA

for the neutralizer. The realm of gas conditioning with ammonia will take some more
investigation.

Overall Conclusions
In summary we find that the plant has equipment of adequate size. Several
improvements could be made to the plant that would increase capacity. We would rank
the importance of items as follows:

a. Granulator performance; atomization sprays and bed agitation hopefully

resulting in reduced recycle rates
b. Dryer performance; improved lifter designs and methods of reducing
fouling
c. Cooler performance improvement with an air chiller
d. Agitation in the neutralizer to help completion of reactions
e. Environmental improvements such as dedicated scrubbers for the
neutralizer, granulator, dryer and cooler.

Obviously with so many potential improvements to be made, one must consider the cost
of fixing up the existing plant versus building a new plant. For rough budgetary
purposes, we would estimate a new facility would involve a cost of $______ for the
equipment and $_____ to install and build a plant.

We have also considered the ammonium sulfate crystallizer plant and have forwarded
this application to HPD division of . This company is very strong in
crystallization and ammonium sulfate crystallization in particular. They will likely
contact you from their division in .

In regards to the TCP plant expansion, we are studying the application and will respond
under separate letter.

We hope the above report addresses what you require. Please feel free to contact me if
you should need any clarifications.

Sincerely,

Walter Hawkins
Sr. Process Engineer
FEECO International, Inc.
FEECO
INTERNATIONAL, INC.
3913 Algoma Road Green Bay, Wisconsin 54311-9707 920-468-1000 Fax: 920-469-5110 USA

Ted Vanegeren
Manager Sales and service department
FEECO International, Inc.
CC Will Black