EXPLOSIVES AND BLASTING
In Europe emulsion explosives use of Orica ’ s total AN and emulsion sales is 91 %
result of lower market demand . Chile volumes were also negatively impacted by a contract loss from the second half of 2015 . Partially offsetting these impacts were improved volumes to copper and gold customers in Peru as well as customer wins in Brazil . From an AN product mix perspective , the volume reduction was stable across the product range with emulsion products holding at ~ 60 % of total AN . Sales of Initiating Systems , particularly EBS products were higher , notably in Peru , Argentina and with the ramp up of a new contract in Colombia . Revenue from advanced products and services as a percentage of total explosives revenue declined to 27 % from 28 % while pricing across explosives and cyanide was down due to the flow through of contract renegotiations completed in the second half of 2015 .
Finally in the Europe , Africa and Asia region
( 268,000 t AN and emulsion of which emulsion 91 %), sales revenue increased 4 % due to a combination of higher demand in Africa from new business as well as higher EBS sales across all three sub-regions , in particular increased penetration into the tunnelling market in South East Asia . Europe ’ s revenue was flat but with improved sales in Turkey and the CIS offset by lower demand in the Nordics and UK as a result of mine closures .
By mining commodity , the composition of revenue across the region is weighted towards quarrying markets ( 33 %) in Europe and Asia , gold ( 21 %) in Africa and Asia , copper ( 14 %) in Africa and Europe and other commodities ( 19 %) including zinc and nickel in Europe and Asia . Explosives volumes were broadly in line with the previous period . Revenue from advanced products and services as a percentage of total explosives revenue increased to 22 % from 17 %. Overall pricing across the region was generally flat .
Orica CEO Alberto Calderon addressed industry leaders at the West Australian Mining Club June luncheon recently as follows : “ We believe our differentiation strategy will allow us to outperform the market . Additionally , our focus on customer centricity will improve the penetration of our differentiated products and services … we have taken decisive action at Orica and despite the market volatility we continued to control those elements that we can . Our transformation program has exceeded our forecast , and – more importantly – 80 % of the benefits delivered are repeatable , long term benefits . In the half year ended March 2016 , we delivered net benefits of A $ 52 million . Our forecast is to deliver benefits of between A $ 70 and 80 million by the end of this financial year . Given the persistent oversupply of ammonium nitrate in Australia , we rationalised our supply , with curtailed production out of our Yarwun operation in Gladstone helping to balance the Australian East Coast supply . We have continued to strengthen our contract profile , locking in volumes through the down cycle for better certainty . We have also turned our attention to defining our long-term , optimal initiation systems supply network . Orica has a highly geographically dispersed Initiation Systems manufacturing footprint , which we need to leverage more effectively for the benefit of our customers and Orica , while not compromising on the elements that are most important to our customers - safety , reliability and quality .
To ensure we deliver against these factors we have embarked on a project that will utilise our highly automated plants , like those in Gyttorp ( Sweden ) and Brownsburg ( Canada ), to produce a high quality product , consistently and efficiently .”
He added that keeping in mind the supply reliability requirements of its customers Orica is also standardising its products where possible , and obtaining the required certifications to supply in all jurisdictions that its customers operate in from all the manufacturing locations in its global network . “ This delivers a number of
AUGUST 2016 | International Mining