Orica chief praises Abbott's IR plans

THE head of explosives and chemicals giant Orica has praised Opposition Leader Tony Abbott's industrial relations plans.

He has also called on the Reserve Bank to weaken the Australian dollar.

The local currency fell below parity with the US greenback on Saturday for the first time in 11 months.

But Orica chief executive Ian Smith says the central bank needs to do "everything in their power" to dilute the Australian dollar, which he estimates wiped $3 million from company earnings in the six months to March 31.

"Oh look, we'd love the exchange rate to keep going down," he told ABC Television.

"If the exchange rate was lower then we would have picked up a benefit."

But Bronson and Jacobs, an Orica subsidiary which supplies wholesale chemicals to the cosmetics and food industries is benefiting from a strong Australian dollar, as it pushes out local competitors, Mr Smith said.

"We are picking up a bigger market share because ... we are one of the last big ones left. But the overall state of the economy is being hollowed out," he said.

"A lot of those smaller manufacturers, distributors are being pushed out of business, they can't compete against imports."

While business groups have criticised Mr Abbott's industrial relations plans as being too timid, Mr Smith welcomed the coalition's push for more individual flexibility agreements.

"It's starting to go in the right direction," he said.

"At the moment we have suffered from a few years of a government that wants to institutionalise third party involvement, so that should really be backed off as well."

Orica's first half net profit rose by six per cent to $267 million.

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Orica chief praises Abbott's IR plans

THE head of explosives and chemicals giant Orica has praised Opposition Leader Tony Abbott's industrial relations plans.

He has also called on the Reserve Bank to weaken the Australian dollar.

The local currency fell below parity with the US greenback on Saturday for the first time in 11 months.

But Orica chief executive Ian Smith says the central bank needs to do "everything in their power" to dilute the Australian dollar, which he estimates wiped $3 million from company earnings in the six months to March 31.

"Oh look, we'd love the exchange rate to keep going down," he told ABC Television.

"If the exchange rate was lower then we would have picked up a benefit."

But Bronson and Jacobs, an Orica subsidiary which supplies wholesale chemicals to the cosmetics and food industries is benefiting from a strong Australian dollar, as it pushes out local competitors, Mr Smith said.

"We are picking up a bigger market share because ... we are one of the last big ones left. But the overall state of the economy is being hollowed out," he said.

"A lot of those smaller manufacturers, distributors are being pushed out of business, they can't compete against imports."

While business groups have criticised Mr Abbott's industrial relations plans as being too timid, Mr Smith welcomed the coalition's push for more individual flexibility agreements.

"It's starting to go in the right direction," he said.

"At the moment we have suffered from a few years of a government that wants to institutionalise third party involvement, so that should really be backed off as well."

Orica's first half net profit rose by six per cent to $267 million.

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Fortescue plans asset sale

IRON ore miner Fortescue Metals Group hopes to sell part of its rail and port assets by mid-year, with the proceeds going towards paying down its massive debt.

Chief executive Nev Power would not divulge who was interested in the sale, which is understood to involve around 40 per cent of The Pilbara Infrastructure (TPI).

However, he said Fortescue was working on a short list of potential buyers, including sovereign wealth funds, infrastructure funds and industry players.

"Our intention is to sell a minority interest and that we would retain control and flexibility to manage the infrastructure," Mr Power said at the opening of the company's Firetail operations at the $3.2 billion Solomon project in the Pilbara region of Western Australia.

"There is no other infrastructure that you can buy like this in Australia and perhaps not even in the world."

Mr Power said the company, which aims to deliver high growth and high yield, had not declared details of the sale.

"It's a confidential process," Mr Power said.

Atlas iron is understood to be the frontrunner to secure a stake in Fortescue's prized heavy rail and port facilities, valued at more than $3 billion.

Mr Power said the company would use the proceeds of any partial sale to accelerate its debt repayments after the iron ore miner raised $5 billion in US debt markets late last year.

In February Fortescue decided not to pay a half yearly dividend.

Mr Power said investors did not expect to see a dividend payout as the company continued to expand.

"Investors would expect to see us get our balance sheet into a long-term sustainable phase, start that debt pay down process and the transition into higher and higher yields," he said.

Fortescue's dividend payout ratio gave investors certainty through the cycle, he said.

The company is ramping up production at Firetail to 20 million tonnes per annum while its neighbouring Kings mine at Solomon targets 40 million tonnes per annum.

The company plans to expand capacity to 155 million tonnes by the end of the year.

Mr Power added that Fortescue was not forced into selling assets and he ruled out any asset purchases for the time being.

"Right now we're focused on the infrastructure assets," he said.

He said the mining boom was "far from over" as the company moved from the construction phase to the production phase.

"We're going to 155 million tonnes from 45 million tonnes previously so you can see the massive ramp up in production that's occurring."

There would be opportunities to increase efficiencies further once the operations were fully in production.

Chairman Andrew Forrest, who owns more than 32 per cent of the company's stock, said Fortescue had not paid its most recent dividend because expenditure had reached record levels.

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Business shelves hiring plans

Unemployment can be hard on your heart. Source: Supplied

AUSTRALIAN businesses have shelved plans to hire new staff or make significant investments in the first half of 2013.

Dun & Bradstreet's National Business Expectations Survey shows no jobs have been added since the March quarter of 2012, with the employment index remaining in negative territory for three consecutive quarters.

The business survey recorded monthly falls in all of its forward-looking indices including sales, profits, selling prices, inventories, employment and capital investment.

The survey shows a continued a downward trend through to the June 2013 quarter, falling below its 10-year average level, to a score of zero.

Almost half of all businesses report operational costs as their biggest barrier to growth in the coming months.

Dun & Bradstreet director of corporate affairs Danielle Woods said businesses were looking to control their costs while they wait for a sustained economic recovery.

"With businesses keeping a careful eye on their expenses, the significant cost of hiring new staff appears to be dampening expectations for jobs growth," Ms Woods said.

The high Australian dollar and cash flow would also influence the capacity of business to grow.

"With these conditions prevailing, its unsurprising to see the outlook for both employment and investment falling away," she said.

Investment expectations for the June 2013 quarter fell sharply to an index of five, compared to 14 in the previous quarter, bringing the outlook for capital spending to its lowest level since the September 2011 quarter.

And in a further blow to investment optimism, more than a third of businesses said they plan to take advantage of low interest rates to pay off debt rather than increase their borrowings.

A total of 75 per cent of executives expect cash flow to be an issue for their business's operations and that large investments would be delayed until there was sustained improvement in confidence and trading conditions, the survey found.

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