Orica Reaches Agreement on Polyethylene JV Negotiations
13th April, 1999
Orica Limited announced today that it had reached agreement with Kemcor (a joint venture with Exxon and Mobil) on the major issues for combining their Australian polyethylene, polypropylene, synthetic rubber and engineering plastics operations in a new joint venture (JV). The parties announced the commencement of merger negotiations in May 1998 which were subject to agreement and regulatory approval from the ACCC and FIRB.
A number of external factors have caused delays to the commencement of the project. It is now expected that contracts will be signed in May. Orica will have a 50 per cent interest in the JV.
Orica managing director and chief executive officer Mr Philip Weickhardt said, "We are delighted to announce that agreement has now been reached on all substantive issues. The new JV will deliver improved efficiencies, greater profitability and a more internationally competitive Australian plastics manufacturing industry. We anticipate the merger will deliver significant savings to the JV over the next few years.
"It is now full steam ahead. All efforts will be geared towards producing a smooth start-up for our customers and our employees."
An announcement about the JV commencement start-up date will be made as soon as detailed implementation plans have been finalised. The new venture will have combined sales totalling A$700 million a year.