Incitec banks on Asian growth in 2013
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MELBOURNE, Dec 18 AAP
December 18 2012, 3:03PM
Incitec Pivot has given shareholders an optimistic financial outlook for its explosives and fertilisers businesses in 2013 despite a tough year in 2012.
The company is Australia's largest fertiliser maker but is more focused on leveraging itself to Asia's industrialisation and the need for explosives in mining, quarries and construction.
It is the world's second biggest mining explosives maker behind rival Orica.
However chairman Paul Brasher described its fertilisers business as still being a major industry player in Australia that would also benefit from Asia's economic growth in a speech at its annual general meeting.
"This situation can be seen against the backdrop of the Federal Government's announcement of a National Food Plan, which is seeking to address how Australia can increase production not only to meet our own domestic needs, but also to help position us to meet the growing fooddemands of our neighbours in Asia," he said.
"I am optimistic that our company is well placed to take advantage of these opportunities, particularly in light of the organisational changes we have made in our Fertiliser business during the year."
Those changes included a merging of its fertiliser distribution and trading operations.
The company believes that will provide greater oversight from production or purchase of fertilisers to customers to the farm gate, providing more confidence around supply and price and mute pricing volatility in the industry.
The fertiliser business posted a fall in earnings in 2012, while underlying net profit was down 24 per cent to $404.7 million.
The Asia Pacific Explosives business would be underpinned by the Chinese economy, which still continued to grow at a significant rate, Mr Brasher said.
North America is also a significant market for the Incitec and was still very patchy although employment market indicators for the long-term were positive, in mining and manufacturing, he said.
The company is due to make a decision on building a 760,000 tonne ammonia nitrate plant in Louisiana in the US by the second quarter of 2013.
Its sixth Australian ammonia nitrate plant, the $1 billion Moranbah plant in Queensland, was completed this year and has begun production while it cancelled a planned plant in NSW in the same area as Orica's.
Incitec shares were down one cent at $3.24 at 1501 AEDT.
By Greg Roberts