Orica cuts production at Gladstone

Orica has announced a reduction in production and jobs at its Gladstone Yarwun site.

Around 40 positions will be cut from the operation, although of these 11 are understood to already be vacant, according to the Gladstone Observer.

It comes on the back of earlier statements by the explosives manufacturer that it sought to cut around 700 positions globally from its operations.

These reduction form part of the company’s program of 'efficiency improvements' which delivered savings of around $69 million in 2014, with the ongoing program encouraging the company to reset its cost base for 2015.

As part of the reduction of workforce, Orica is also shrinking output from 320,000 tonnes of ammonium nitrate to 280,000 to this year.

The jobs are expected to go by the end of this week.

“Today, we have begun consulting with our employees to understand and address any impacts on the workforce,” Yarwun general manager Dave Buick explained in a company statement.

“We expect there will be some impact on staffing levels from this decision.”

He went on to say there will be a complete business review carried out, outlining the reasons behind the workforce reduction.

"We make a couple of products, and will be doing a business review of the entire structure," he said.

“While we remain confident in the long term outlook for ammonium nitrate, there is a near term oversupply in the market. 

"The forecast for next year is such that we will take half the plant offline. But we will have it sitting there so if needed it can be turned back on.

"We have more labour than we need for current demand."

However, Orica expects there to be no material impact on ammonium nitrate supply to its customers.