Orica hit by Australia-China trade spat, CEO to step down
“In the first half of financial year 2021, demand for Orica’s products and services from affected mines is expected to be approximately 60,000 tonnes of ammonium nitrate lower than the prior corresponding period.”
Elsewhere in the world, coronavirus-related disruptions in Europe, Africa and Mexico have led to mines closing or curtailing output, while social unrest in Peru and strikes in Chile have also reduced demand.
The global mining slowdown is expected to cost Orica as much as $80 million, while the rising Australian dollar could wipe a further $25 million off its books. Other items ,including arbitration, could cost up to $20 million when it reports half-year earnings in May.
Shares in Orica fell sharply following the news on Friday, closing the session 18.1 per cent lower at $12.56.
In a separate announcement on Friday, Orica’s board said Mr Calderon, the chief executive, would step down and be replaced by internal pick Sanjeev Gandhi, the group’s executive and president of Australia Pacific Asia.
“Having spent the last seven months running the Australia Pacific Asia business, I have gained deep insight into the business and the organisation,” said Mr Gandhi, who spent 26 years with German chemical company BASF before joining Orica. “I am very impressed by the capabilities of the Orica people and assets.”
Mr Calderon said he had planned to start the CEO transition process more than a year ago, and had begun discussions with the board. However, he decided to stay on once the pandemic took hold to help the company navigate the crisis.
“I am happy that I did,” Mr Calderon said.
“While the last year has been tough, it has also been one of the most rewarding. I am so proud of the way our people rose to the challenge.”
Orica chairman Malcolm Broomhead said the board had considered “several excellent internal and external candidates for the role.”
“It was a tough decision, and we are confident that we have the right person in Sanjeev to lead Orica through its next phase of growth,” he said.