Mining services business Orica has replaced its managing director after revealing a larger than expected impact from COVID-19 on its global operations.
Mining services business Orica has replaced its managing director after revealing a larger than expected impact from COVID-19 on its global operations.
Orica said disruptions to mining activity as a result of COVID-19, coupled with demand for products and services becoming affected by ongoing trade tension between Australia and China, would reduce the company’s earnings by between $70 million and $80 million.
That excludes the impacts of a strengthened Australian dollar and arbitration costs related to Orica's Burrup plant in Western Australia, expected to be between $20 million and $25 million and $12 million and $20 million, respectively.
Its share price plummeted 18 per cent on the news to close at $12.56.
Orica also announced managing director and chief executive Alberto Calderon would depart the business after nearly six years in the role and will be succeeded by group executive and president of Australia Pacific Asia, Sanjeev Gandhi.
Mr Gandhi joined Orica in July last year after spending 26 years with German chemical company BASF SE, during which he held senior marketing, commercial, business leadership and director roles spanning India, Germany, Japan, Singapore and Hong Kong.
Orica chairman Malcolm Broomhead said the transition formed part of a succession planning process.
"We are confident that we have the right person in Sanjeev to lead Orica through its next phase of growth,” he said.
Mr Broomhead thanked Mr Calderon for his leadership.
“Upon becoming CEO in 2015, Alberto led a much needed operational and cultural transformation of our company,” he said.
“He put together an excellent and diverse management team and implemented a customer-focused global operating model, as well as a single, global SAP platform.”
Mr Calderon said the transition process was expected to start more than a year ago but got pushed back due to COVID-19.
“I wanted to stay and help the company through the worst of the pandemic,” he said.
“I am happy that I did. While the last year has been tough, it has also been one of the most rewarding.
“Sanjeev is a terrific leader, and I am sure will lead Orica to even greater heights."
Mr Gandhi said he looked forward to steering the business.
“Having spent the last seven months running the Australia Pacific Asia business, I have gained deep insight into the business and the organisation,” he said.
“I am very impressed by the capabilities of the Orica people and assets and, together with my executive team, I look forward to further strengthening our market leading position.”
