Explosives giant Orica to cut 700 jobs next year
ORICA will cut about 700 jobs next year as it continues its cost-cutting drive.
The explosives giant, which has a plant in Gladstone, already has cut 1300 positions in the past two years.
Along with a procurement efficiency program, the move is expected to save $140-170 million in 2015 and $60-80m in 2016.
The company has today announced its full year results, with net profit after tax of $602.5 million, up two per cent on last year.
The company is struggling as its mining customers cut costs in the face of weak commodity prices.
Orica also announced it would sell its chemicals business to Blackstone for $750 million.
The sale is expected to be completed in the first quarter of next year.
Managing director and chief executive Ian Smith said efficiency improvements had delivered savings of $69 million this year.
"With further improvements expected in 2015, Orica's cost base is being reset and the company positioned to better meet customers' needs in dynamic market conditions," he said.
"This process will also allow Orica to capture the benefits of any improvement in the commodity cycle."
The company reported that explosives volume growth was positive in the Pilbara iron ore region, the emerging mining markets in Africa and in the European quarry and construction sector.
However, overall global explosive volumes across the year were down 1%, reflecting reduced coal market demand in Eastern Australia, North America and Indonesia.
The company said the volatility and uncertainty in the global resources markets made it difficult to provide profit guidance for the year ahead.
But it did not expect a significant improvement in the resources markets, "reinforcing the requirement for the company to achieve its transformation objectives".