Orica Planning European Explosives Acquisition

31 August, 2000

Orica has signed a Letter of Intent with the German company, Dynamit Nobel, to acquire its industrial explosives business for approximately A$75 million. Negotiations for the acquisition are well advanced and the parties are aiming to sign binding agreements, subject to government approvals, as soon as possible. Transfer of the business to Orica is anticipated to occur before the end of this calendar year.

Dynamit Nobel is the leading supplier of commercial explosives and detonators in Germany and Estonia, with annual sales of around A$100 million. The acquired business will operate from manufacturing sites at Troisdorf and Wurgendorf in Germany and Sirgala in Estonia. Approximately 500 people will transfer from Dynamit Nobel to Orica with the business.

The Dynamit Nobel business is a major manufacturer of detonators for commercial explosives with highly sophisticated production assets at Troisdorf. The acquisition will give Orica full ownership of Precision Blasting Systems GmbH (PBS), the joint venture with Dynamit Nobel formed in 1999 to develop and manufacture electronic detonator systems based on the combined technology of both companies. PBS electronic detonators have been shown to provide vastly superior blast results for customers.

Incoming Orica Explosives chief executive officer, Graeme Liebelt, said that "the acquisition will establish Orica as a major explosives supplier in the European Community, where previously we have only had a relatively small presence in that A$1 billion market". He went on to say that "We will transfer our advanced initiation systems and blasting services technology into the new business and offer these services to European customers. The world class Troisdorf technology and production capacity for detonators will be an excellent addition to the Orica global initiation system business because it adds substantially to the capabilities that currently exist in Orica."

Orica is the world’s largest supplier of commercial explosives with operations in over 30 countries. Orica Europe has operations in the UK, France, Spain, United Arab Emirates, Turkey, Kazakhstan and Kyrgystan.

Dynamit Nobel AG is a German company with sales of 2,400 million Euros and 16,000 employees in its specialty chemicals, explosives and innovative materials businesses. Its explosives business is operated by Dynamit Nobel GmbH Explosivstoff und Systemtechnik (DNES).