wes interested in ori???

PERTH (Dow Jones)--Just a few days before his departure as chief executive of Wesfarmers Ltd. (WPL.AU), Michael Chaney says the Australian energy and hardware conglomerate is looking overseas for its next growth move.

"We actually have a program underway now, which we haven't spoken publicly about, to look at establishing a business in another country," Chaney said Wednesday, in response to questions after a breakfast speech in Perth.
Wesfarmers will "evaluate the possibility" of an overseas operation, he later told Dow Jones Newswires in an interview.
But, despite looking at several deals in the past few years, making an overseas acquisition is "easier said than done", he said.
"We are not equipped, really, to do that," he said. "For example to go and buy a coal mine in China. And nor are the big resources companies doing that."
It may be that Wesfarmers' "inevitable" expansion outside of its current Australian and New Zealand units will occur because "someone we take over has international operations", Chaney added.
"That would give you a further launching pad, as you end up with skills in other countries that you can leverage off," he said.
Analysts say that Chaney's comments may reignite market gossip about a potential A$5 billion move on Melbourne-based Orica Ltd. (ORI.AU), which has offshore operations in its chemicals and mining services units.
"Orica has long been speculated as a potential target for Wesfarmers," said Patersons Securities' analyst Rob Brierley, who added that Chaney's comments illustrate the dearth of local targets for the group.
"They are running out of opportunities in Australia that will make a difference," Brierley said.
But Chaney insists it has always been a "challenge" to find suitable assets that meet the company's criteria of "satisfactory" returns on shareholders' funds.
"It is no harder today for us to grow, than it was ten years ago," he said.
"We've found in the past that things come along."
Wesfarmers' biggest acquisition was the A$2.9 billion Howard Smith takeover in 2001 that expanded the group's Bunnings hardware chain.
That deal dwarfed the company's A$375 million acquisition of the Australian and New Zealand insurance operations of Edward Lumley Holdings Ltd. in June 2003.
Coal Prices Help Boost Shares
Chaney said that Wesfarmers has evaluated several overseas deals in recent years, including a "large" opportunity in India, a gas business in Hawaii, and a Malaysian asset.
"We haven't taken those other opportunities because the numbers didn't add up," he said.
In May, Chaney was forced to defend the company's growth outlook following news of a slowdown in hardware sales and rising coal costs.
Chaney reiterated that its hardware business faces tough market conditions, with falling house prices in Sydney and Melbourne denting consumers' confidence.
"I think that in the next year we'll see consumption moderate considerably in Australia," he said.
Yet, despite the retail worries, Wesfarmers' shares have risen more than 10% in the past two months, partly due to a buoyant outlook for coking coal sales out of the company's Curragh mine in Queensland state.
Last week Merrill Lynch increased its forecast for Wesfarmers' net profit in the fiscal year ending June 30, 2006, by 1.2% to A$1.02 billion and by 6.5% in the following year.
"We believe the coking coal market will remain tight for a longer period than we previously had assumed," Merrill Lynch said, in upgrading its price forecasts.
The broker retained a buy on Wesfarmers with a price target of A$50 a share. In late Wednesday trade, Wesfarmers shares were 28 cents lower at A$40.15, valuing the company at about A$15.2 billion.
Chaney said that he remains "positive" about the outlook for 2006 coking coal prices, which will be negotiated later this year between Asian steel mills and major producers such as BHP Billiton (BHP).
Chaney, who leaves Wesfarmers next week and will be replaced as chief executive by 12-year veteran Richard Goyder, is due to become chairman of National Australia Bank Ltd. (NAB) in September.
By Stephen Bell, Dow Jones Newswires; 61-8-9245-5120
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-Edited by Ian Pemberton