Ann: Investor Briefing Presentation, page-15

This really is an unloved and undervalued stock. Management has really done a pretty good job over time in a) bedding down Dyno (which had been screwed up by PE and then listed by Macq (completely overgeared) and b) buying SCF at a knockdown price. The east coast gas issues can be addressed by importing their ammonia. Perdaman building another global scale ammonia plant in Pilbara and don't see why IPL doesn't stitch up a long term supply agreement here and reduce the dependence on east coast gas supply. The key issues they are facing are i) fertiliser distribution - the capital infrastructure to support this business is volume based and dependent on farmers using increased volumes. Problem is that advanced fertiliser manufacturing can deliver greater nutrient molecules per tonne - so more nutrient for less volume. This seriously damages the distribution business. ii) the SCF assets are problematic, IPL bought these assets well and benefited from the cycle peak early in its ownership. Unfortunately this operation has problems with gas and acid supply and is probably not economic across the cycle (which is why BHP offloaded it). It would be a brave decision but ultimately I think IPL will be taking a hit and closing SCF down. Despite all that I continue to hold because I like the explosives exposure which is really a global duopoly.