09 July 2001 00:00 [Source: ACN]
The resignation last week of Orica chief executive officer (ceo) and managing director Philip Weickhardt should be followed by a review of the strategy and management of the Australian petrochemicals major, industry sources told ACN.
Weickhardt was one of the primary drivers behind the effort by Orica to become a global explosives giant and to exit petrochemicals.
It is an effort which has yet to yield results.
Orica's share price has declined from Aus$13/share in mid-1997 to Aus$4.68/ share as ACN went to press.
And in May this year, the company announced profit after tax and abnormal items of Aus$49.4m (US$25.7m) for the half-year ended 31 March, 51% down compared with the same period last year.
This was the latest in a series of disappointing financial performances which have been attributed to tough market conditions and Orica's relative inexperience in the global explosives business. The company purchased ICI's explosives business in December 1997.
An argument is that Orica would have performed better if it had stuck to being mainly an Australian petrochemicals player where the growth may not be spectacular but the competition is far from ferocious.
Instead it has joint-ventured its PVC, other polymers and olefins operations with a view to eventual divestment.
But another view shared by some analysts is that Orica has a strong product portfolio and the right strategy which will eventually pay off, but has made some management mistakes and has suffered from chronically depressed markets.
Weickhardt resigned last Thursday after a board meeting which lasted two days. Don Mercer, Orica chairman, will act as interim executive chairman pending the appointment of a new ceo.
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