Orica Sells Polyurethanes Business

18 February, 2000

Orica Limited (Orica) today announced the sale of its Polyurethanes business to Huntsman Corporation for $48 million.

The sale price includes a deferred settlement of approximately $6 million, payable within two years. Payment is subject to the business meeting agreed performance targets.

The after tax profit on the sale (excluding the deferred payment) will be approximately $26 million. Proceeds will be used initially to retire debt.

The Polyurethanes business has sales of approximately $50 million and employs around 45 people. It markets a comprehensive range of polyurethane based chemicals for a wide range of industries including whitegoods, footwear and automotive. The sale to Huntsman includes manufacturing and technical development facilities located on Orica’s Deer Park site in Melbourne’s west.

Orica managing director and chief executive officer, Philip Weickhardt said: "The rationale for this sale is exactly as it was for the sales of our Technical Coatings and Surfactants businesses. These businesses all have global customers looking for global suppliers offering global technology. Huntsman are world players in polyurethanes and are more natural long term owners of this business than we are."

"We have made very significant progress in our portfolio reshaping. We have maximised value for our shareholders by selling non-core businesses at the optimum time and now have four strong core businesses, each with excellent market positions with sustainable competitive advantage. Our focus is now very clearly on aggressively pursuing profitable growth opportunities in our mining services, chemicals, consumer products and agricultural chemicals businesses."

Huntsman Corporation is a US based company with worldwide sales of approximately US $8 billion. Its Australian operations include a styrene and phenolic resins business and a surfactants business, which it purchased from Orica in December 1998. Huntsman became one of the world’s largest suppliers of polyurethane chemicals when it purchased ICI PLC’s business in 1999.

Completion of the sale is expected to be within the next month.