YEAR IN BRIEF

Chemicals
Strong demand for ammonium nitrate continued with sales volumes broadly in line with 2005/06. Production of ammonium nitrate from Kwinana was two per cent below the prior year’s record output.

During the year construction of the new ammonium nitrate production facility at Kwinana continued with commissioning scheduled for the first half of 2007/08. The new facility will double current production with the higher output destined for the resource sector and the manufacture of the Flexi-N nitrogenous fertiliser.

Production at the Queensland Nitrates integrated ammonia/ammonium nitrates facility was significantly higher than last year’s and demand for ammonium nitrate remained strong. Queensland Nitrates continues to evaluate options to increase production capacity to meet the growing market demand in Queensland.

The 75 per cent-owned Australian Gold Reagents (AGR) business recorded sodium cyanide solution sales consistent with 2005/06, while export sales of solid product were lower due to production capacity constraints and a cessation of third-party product sourcing arrangements. AGR has negotiated off-take for the Boddington gold project which will support an increase in production capacity of sodium cyanide solution.

During the year, CSBP divested its chlor-alkali business. CSBP continues to toll manufacture sodium hypochlorite, under contract, and distribute a range of bulk industrial chemicals.

In September 2007, CSBP acquired Australian Vinyls Corporation (AVC) for $137.7 million. AVC is the only manufacturer of poly vinyl chloride (PVC) in Australia and also imports PVC and related products. It also owns Australia’s only manufacturer of wood plastic composites, ModWood, which manufactures products used in decking and fencing.

Fertilisers
Despite reduced sales volumes, a greater focus on cost containment and margin management resulted in improved fertiliser earnings.

CSBP maintained a strong market-focused approach working with and through distributors, in particular AWB Landmark and Elders, to meet the varied fertiliser and agronomic needs of farmer customers. Wider product range, technical service improvements, higher service levels and competitive pricing continued to be features of CSBP’s approach.

The strong demand for liquid fertiliser products, in particular Flexi-N, continued. CSBP’s commitment to ongoing research and development, combined with expanding production and storage facilities, will enable it to meet the growing liquid fertiliser demand in Western Australia.