Orica aims for expansion in China Eastern Europe and Africa
Monday, 19 Oct 2009
AAP cited Mr Graeme Liebelt CEO of Orica Limited as saying that his company is aiming to expand in China, Eastern Europe and Africa to maintain growth and its position as the world's biggest explosives maker.
Mr Liebelt also reiterated forecasts that the Melbourne based company will increase full year profit in fiscal 2009. There are some quite significant areas where our market share is quite low."
He said that "China is one, Eastern Europe is another and Africa we only have a weak presence, so we still see plenty of opportunities for growth. We'll continue to do small acquisitions as well."
Orica is building a detonator factory in China, which will be the company's biggest on completion and Mr Liebelt said that the firm had projects in Eastern Europe and Africa that could be expanded. The company is in a position where it can look at growth, despite the increased difficulty in sourcing funding following the global financial crisis, because the company raised USD 900 million in equity in July 2008. He said that the company was criticized at the time. Many companies followed Orica's lead, often at share prices that were much lower than when Orica raised the money.
Mr Mr Liebelt said in a speech to the American Chamber of Commerce in Australia, that he was fairly optimistic about Orica's current outlook. Australia and Asia have been pretty strong and our business in Indonesia has not missed a beat. On the other hand, the US and Europe were in a deep downturn with signs only just emerging in the US that there may be a recovery.
He said that “We entered the trough and now we're rolling along the bottom. But Orica would still manage to increase its profit for the year to September 2009. We expect to have increased profits this year."
Mr Liebelt told investors in July that net profit before material items for September 30th 2009 would be higher than the USD 572.3 million reported in fiscal 2008. The reasons for the profit increase included mining volumes holding up in some areas, increased margins on contracts that were rolled over during the year and cost controls. He said that the company had only gone ahead with capital projects that were essential and often time bound, while it had cut 400 to 500 staff in the US and Europe.
He added that Orica had no timeframe for the sale of its consumer products division, which includes Dulux, Selleys and Berger Paints. The company had announced it was planning to de merge the consumer division in July 2008 but the subsequent market turmoil had forced Orica to delay it.
