
Orica - Full extent of TNT battle in wake of Ukraine war

A day after posting a 34% jump in earnings, which saw the share price jump 8%, chemicals and explosives manufacturer, Orica (ASX: ORI) has updated the market on how heightened military demand for critical explosive inputs has made it difficult to keep operations running. Due to the war in Ukraine – which triggered a global explosives shortage - CEO Sanjeev Gandhi revealed the full knock-on effect from the loss of Ukraine's supply [of TNT] - a critical input for its mining and infrastructure operations – in fulfilling North American orders. On an earnings call yesterday, Gandhi highlighted the difficulties for Orica, the world’s largest manufacturer of commercial explosives and blasting systems - accessing critical inputs now that Ukraine - one of the world’s largest suppliers of TNT before Russia’s invasion – is no longer supplying.Scramble for supply“Civil explosives companies are competing with the ordinances factories to source trinitrotoluene (TNT) because the same TNT goes into armaments as goes into our boosters,” Gandhi said. Elaborating on the acuteness of supply issues in North America over the past six months, Gandhi told the market that Orica was forced to invoke "force majeure" clauses in its systems contracts