Penrice must be one of the ugliest dogs on the market. Full points to the guys there for keeping the old factory going but its just a matter of time before it creaks to a stop.
For those that don't know the history the Osborne plant was built by ICI at the start of WW2. The Solvay process it uses was the conventional technology to make Soda Ash at that time.
Since then the world has moved on and most Soda Ash comes from natural sources. The Solvay Process is very energy hungry. The Solvay plants have been turning out their lights one by one around the world.
As energy prices rise Solvay Plants become less competitive. So as those prices continue their inevitable rise the Osborne plant loses its advantage over imported Natural Soda Ash.
However before being slowly crushed by energy prices it is likely to have a serious engineering breakdown. The process is a serious bit of chemical engineering with ancient heavy vessels containing hot and corrosive liquids. It also has old high speed turbines etc. A serious failure of just one of these items would have a serious affect on the balance sheet.
The net profit from the Osborne site is very thin compared to the turn over and capital employed.
Since being abandoned by ICI in the early 90s it has had a series of owners in quick succession. The huge salt fields on the outskirts of Adelaide were the crown jewels but were sold for a one off gain.
I don't think any of the previous owners wanted to be around when the music stopped to pay out the guys or remediate the site.
Bacci
PSH Price at posting:
88.0¢ Sentiment: Sell Disclosure: Not Held
