Orica to Acquire US Nitrogen Plants from LaRoche

28 August, 2000

Orica Limited, through its wholly owned subsidiary Orica USA Inc, will strengthen its North American explosives business by the proposed acquisition of two industrial grade ammonium nitrate manufacturing plants from LaRoche Industries Inc.

Orica was the successful bidder in a court managed auction process for the LaRoche ammonium nitrate business. Once the deal closes, Orica will acquire LaRoche’s 210,000 tonne per annum industrial ammonium nitrate plant at Seneca, Illinois and its 100,000 tonne per annum plant at Geneva, Utah for approximately $US44 million, including working capital. A unit of LSB Industries will acquire LaRoche’s agricultural production assets in a complementary arrangement.

Orica Limited managing director and chief executive officer, Philip Weickhardt said, "The purchase of these assets, at a fraction of the cost of building new plants, provides us an excellent opportunity to satisfy our strategic desire to own cost competitive ammonium nitrate plants close to our customers in the important North American explosives market. While we currently purchase large quantities of ammonium nitrate from third parties, it is our long term strategy to manufacture significant percentages of our requirements in house".

Orica, both directly and through its joint ventures with Nelson Brothers, is already LaRoche’s largest customer for ammonium nitrate, with current purchases of over 200,000 tonnes per annum. Orica also operates the world’s largest industrial grade ammonium nitrate plant at Carseland, Alberta, Canada, that was recently upgraded to produce over 500,000 tonnes per annum.

LaRoche filed for protection under Chapter 11 of the US Bankruptcy Code on May 3, 2000. Subsequently, LaRoche offered its ammonium nitrate assets for sale under the supervision of the US Bankruptcy Court for the District of Delaware. Orica’s proposed purchase of the LaRoche assets remains conditional upon a number of contractual and regulatory conditions.

Orica is the world’s leading supplier of commercial explosives, with operations in over 30 countries.