OMN - Omnia Holdings Limited - Omnia`s New Nitric Acid Complex on time and belowRelease Date: 09/05/2012 12:00:03 Code(s): OMN
OMN - Omnia Holdings Limited - Omnia`s New Nitric Acid Complex on time and below
OMNIA HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1967/003680/06)
JSE code: OMN
("Omnia" or "the Group")
OMNIA`S NEW NITRIC ACID COMPLEX ON TIME AND BELOW BUDGET
Omnia is delighted to announce the successful completion of its world class
Nitric Acid Complex in Sasolburg, which started operating towards the end of
March 2012. This Complex is the first of its kind to be built in South Africa
for many decades. The Complex represents a milestone investment in the
development of South Africa to produce nitric acid and will alleviate the
pressure Omnia experienced as a result of an increasing shortage of this
critical raw material.
The Nitric Acid Complex is a much needed investment in the future of South
Africa`s mining and agriculture sector. Despite Omnia`s existing plant being
operated at full capacity, the growth in Omnia`s markets has led to an
increasing shortage of nitric acid which has in particular, restricted its use
in its fertilizer business. In 2010 Omnia announced that R1 billion was raised
for the Complex, with a capital budget of R1.4 billion (excluding capitalised
interest). Today, Omnia is pleased to announce that the expected cost for the
Complex will be below budget.
Rod Humphris, Omnia Group Managing Director, said: "The capital cost at less
than $200m compares favourably with international benchmarks for similar plants
of $500m. We are extremely pleased that the start-up was achieved in a record
construction period of 21 months - a very tight time schedule for a capital
project of this nature. The construction was managed by our own internal team."
The completion of the Nitric Acid Complex is a great development for the Group
and will enhance South Africa`s capacity to produce nitric acid and ammonium
nitrate using world class technology. The Complex will have a positive impact on
the Group`s performance going forward and updated guidance in this regard will
be provided when the Group`s results for the year ended 31 March 2012 are
released on 26 June 2012. Ramp up to full capacity will take place in line with
growth in the explosives and fertilizer markets.
The Complex comprises a nitric acid plant, an ammonium nitrate plant, a porous
ammonium nitrate plant (PGAN), a fleet of 145 specialised ammonia rail tankers
and other ancillary facilities. The nitric acid plant will produce 1 000 tons
per day which is 40% more than the current plant. German engineering design
company ThyssenKrupp Uhde, one of the world`s leading companies in the design
and construction of chemical, refining and industrial plants, supplied the
technology, licences and engineering design.
The Complex is Omnia`s biggest investment to date and demonstrates the Group`s
commitment to South Africa`s mining and agricultural sectors. Not only does it
create a new growth path for the Group but it is also, together with the
existing plant, a major step in ensuring security and continuity of supply for
the Group`s explosives and fertilizer businesses.
Humphris noted: "These plants provide growth opportunities for our Omnia
Fertilizer and BME operations, allowing us to take advantage of the increasing
demand for fertilisers and explosives as a result of the significant growth in
the agriculture and mining sectors in South and Southern Africa."
Omnia uses international leading technology, EnviNOxRegistered of ThyssenKrupp
Uhde, which is more than 98% efficient, to eliminate greenhouse gases at its new
and old nitric acid plants in Sasolburg. The new nitric acid plant is expected
to generate up to 350,000 carbon credits annually at full load, in terms of the
United Nations Framework Convention on Climate Change (UNFCCC) which recently
approved a new mechanism for the abatement of greenhouse gas emissions arising
from new nitric acid plants. In the first year of operation, the new nitric acid
plant is expected to achieve 60% of this total. One of the features of the new
complex is that it will generate approximately 50% of the total electricity
demand for the entire Sasolburg site from excess steam resulting from the
exothermic nature of the reactions in the plant. This benefits the business in
buffering the high inflationary electricity price increases and substantially
reduces the Group`s carbon footprint even further.
Omnia recently became the first company in sub-Saharan Africa to be issued in
excess of a million Certified Emission Reductions (CERs) by the Executive Board
of the Clean Development Mechanism Protocol. Omnia has to date been issued with
a total of 1 076 015 CERs, 42% of the total quantity issued in Southern Africa.
Humphris concluded: "We chose this technology as we believe that the
alternatives are not nearly as efficient and are therefore not in line with
Omnia`s commitment to reducing its environmental impact and effect on climate
change. The new Nitric Acid Complex establishes a new growth platform for the
Group which will be of immense benefit to our customers in the growth of their
Note to editors:
Background on the investment
In May 2010, the Omnia board approved a R1,4bn investment in a second nitric
acid complex aimed at alleviating the growing shortage of raw materials,
particularly in the mining division. The investment by Omnia was driven by
growing demand in its explosives and fertilizer markets as a result of
international demand and development trends in mining and agriculture which are
set to continue.
Omnia`s need for Nitric Acid, and history of raw material supply
Nitric acid (HNO3) is a core raw material for both fertilizer and explosives
manufacturing. Omnia`s nitric acid plant in Sasolburg was commissioned in 1983
with the main purpose of supplying the fertilizer market during the early years.
The growth in the explosives market has now eroded the industry`s spare
capacity, and is expected to do so for the foreseeable future. There are also
technical challenges inherent in importing nitrates which make this an
increasingly unattractive raw material supply solution. BME, Omnia`s explosives
business, has since developed a strong market presence, demanding an ever-
increasing portion of the nitric acid plant capacity. The development of calcium
nitrate (used both as a fertilizer and in explosives manufacturing) has also
added to the nitric acid demand within the Group.
The new plant logistics include investment in rail infrastructure, via state of
the art rail tankers, to comply with best practice safety transportation
Omnia is a diversified, specialist chemical services provider with business
interests balanced across chemical, mining and agricultural markets. The Group`s
business model, which leverages its intellectual capital and technology,
differentiates it from commodity chemical companies.
The Group`s three businesses (chemical, mining and agriculture) continue to
provide high value, customised solutions built on a continually expanding
knowledge base. Omnia`s unique business model places it at the forefront of the
chemical services industry and involves matching customer needs to product
innovation and application expertise to add extraordinary value to its customers
Issued by Brunswick: 011 502 7400
Taryn Wulfsohn 083 273 1301
For more information contact:
Rod Humphris, Omnia Group Managing Director 011 709 8850
9 May 2012
Date: 09/05/2012 12:00:03 Supplied by www.sharenet.co.za
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