About LSB Industries

LSB Industries, Inc. manufactures and markets chemical products for the agricultural, industrial and mining markets. The company owns and operates three multi plant facilities in El Dorado, Arkansas (the El Dorado Facility), Cherokee, Alabama (the Cherokee Facility), and Pryor, Oklahoma (the Pryor Facility). The company operates a facility on behalf of Covestro LLC (Covestro) in Baytown, Texas (the Baytown Facility). The company’s products are sold through distributors and directly to end customers throughout the United States and parts of Mexico, Canada and the Caribbean. Business The company’s business manufactures products for three principal markets: Agricultural Markets: Ammonia, fertilizer grade ammonium nitrate (AN and HDAN) and urea ammonia nitrate (UAN); Industrial Markets: High purity and commercial grade ammonia, high purity AN, sulfuric acids, concentrated, blended and regular nitric acid, mixed nitrating acids, carbon dioxide, and diesel exhaust fluid (DEF); and Mining Markets: Industrial grade AN (LDAN) and AN solutions. The products the company manufactures at its facilities are primarily derived from natural gas (a raw material feedstock). The company’s facilities and production processes have been designed to produce products that are marketable at nearly each stage of production. This design has allowed the company to develop and deploy a business model optimizing the mix of products to capture the value opportunities in the end markets it serves with a focus on balancing its production. Strategy The company pursues a strategy of balancing the sale of product as fertilizer into the agriculture markets at spot prices or short duration pre-sales and developing industrial and mining customers that purchase substantial quantities of products, primarily under contractual obligations and/or pricing arrangements. The company’s strategy also includes evaluating and pursuing acquisitions of strategic assets or companies, mergers with other companies and investment in additional production capacity where those acquisitions, mergers or expansion of production capacity will enhance the value of the company. The key elements of the company’s strategy are to invest to improve environmental, health and safety and reliability at its facilities while supplying the company’s customers with products of the highest quality; continue broadening the distribution and optimization of its product mix; develop and implement a strategy to capitalize on low carbon ammonia and clean energy opportunities; evaluate and pursue organic capacity expansion; and pursue acquisitions of strategic assets or companies. Agricultural Products The company produces and sells UAN, HDAN and ammonia, all of which are nitrogen-based fertilizers. The company sells these agricultural products to farmers, ranchers, fertilizer dealers and distributors primarily in the ranch land and grain production markets in the U.S. The company’s nitrogen-based fertilizers are used to grow food crops, biofuel feedstock crops, pasture land for grazing livestock and forage production. The company maintains long-term relationships with wholesale agricultural distributors and retailers and also sells directly to agricultural end-users through its network of wholesale and retail distribution centers. The company develops its market position in these areas by emphasizing high quality products, customer service and technical advice. The company sells most of its agricultural products. Industrial and Mining Products The company manufactures and sells industrial acids and other chemical products primarily to the polyurethane intermediates, paper, fibers, emission control, and electronics industries. In addition, the company produces and sells blended and regular nitric acid and industrial and high purity ammonia for many specialty applications, including the reduction of air emissions from power plants. The company’s industrial products include nitric acid, ammonia, sulfuric acid, and DEF, ammonium nitrate and CO2. The company also produces and sells LDAN, HDAN and AN solution to the mining industry, which are primarily used as AN fuel oil and specialty emulsions for usage in the quarry and the construction industries, for metals mining, and to a lesser extent, for coal mining. The company has signed long-term contracts with certain customers that provide for the annual sale of LDAN. The company’s mining products include LDAN, AN solution and HDAN. Competition The company operates in a highly competitive market with many other larger chemical companies, such as Advansix, Inc.; Austin Powder Company; CF Industries Holdings, Inc.; Chemtrade Logistics L.L.C.; Cornerstone Chemical; CVR Partners; Dyno Nobel, a subsidiary of Incitec Pivot Limited; Ecovyst, Inc.; Eurochem North America; Fertinal; Helm AG; International Raw Materials, Ltd.; Interoceanic Corporation; Koch Industries; Macro-Source L.L.C.; Norfalco; N-7 L.L.C.; Nutrien; Orica Limited; Southern States Chemical; Trammo Inc.; Veolia North America; and Yara International. History LSB Industries, Inc. was founded in 1968 as an Oklahoma corporation and became a Delaware corporation in 1977. The company was incorporated in 1968.