EFIC provided a direct loan to help Orica Limited
Melbourne-based Orica Limited (Orica) is a leading supplier of explosives-related mining services around the world.
One of the company’s main activities is the manufacture and sale of industrial grade ammonium nitrate, a key ingredient in mining explosives. Demand for ammonium nitrate is driven by the mining industry and Indonesia’s large and growing mining sector makes it a strategically important market for Orica.
To take advantage of opportunities in Indonesia, Orica is investing in an industrial grade ammonium nitrate plant in Bontang, East Kalimantan at a cost of up to US$550 million. The plant is expected to produce 300,000 tonnes of ammonium nitrate each year.
To better match its investment in the plant, Orica sought longer-term finance than the commercial bank market could provide. As a result, Orica turned to export credit agencies, including Australia’s Export Finance and Insurance Corporation (EFIC), for the long-term finance it needed.
EFIC provided a ten-year, A$50 million direct loan to Orica to assist with construction of the plant.
“At a time when the commercial market has limited appetite for longer tenor financing, export credit agencies like EFIC were able to meet our particular financing needs in a way that the commercial banks alone could not. Working with EFIC was a very positive experience – they were very responsive to our timing and commercial requirements and helped us to find a financing solution that suited us both”, said Orica’s Director of Finance, Noel Meehan.
The Bontang plant will be Orica’s eighth industrial grade ammonium manufacturing plant worldwide.
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