Company Strategy Model

Incitec Pivot aims to generate competitive returns for shareholders through a business strategy, which is underpinned by strong financial discipline. The strategy is based on four key principles, the interaction of which creates a perpetual cycle; scale creates the opportunity for further efficiencies, which, in turn, generate growth opportunities. The key principles and their interaction is illustrated in the following diagram:

Lowest Cost Base
Incitec Pivot engages in a continuous drive for high productivity, greater efficiency and cost control in every aspect of its business to achieve the lowest cost base.

"Project Tardis", Incitec Pivot's original business efficiency program, has been embedded throughout Incitec Pivot's operations and has become a core competency. Continuous business efficiency improvements are driven through the individual management of specific projects overseen by Incitec Pivot's project office, which provides a disciplined and focused approach.

The "Project Tardis" business efficiency program has delivered maintainable business efficiency benefits in excess of A$130 million per annum.

Own the Product
Incitec Pivot's core competence is in low cost manufacturing and engineering, particularly in relation to nitrogen chemistry. Incitec Pivot's low cost manufacturing assets underpin its downstream distribution and trading activities.

Trade
Incitec Pivot is actively growing and expanding its trading business, Southern Cross International, by developing domestic, regional and global trading in Incitec Pivot's manufactured products and those sourced from other manufacturers.

The trading business adds value to the Incitec Pivot business by generating trading income, sourcing cost-competitive raw materials and fertiliser products and through the diversification of Incitec Pivot's customer base.

In relation to its Australian distribution business, Incitec Pivot's strategy is to be the leading rural provider of agricultural fertilisers and specialist plant nutrition advice. Incitec Pivot achieves this by offering an extensive range of fertiliser products and services to meet the diverse needs of the different agricultural segments.

Supply Chain
Incitec Pivot actively strives to optimise its logistics and distribution operations, in order to decrease its cost base and drive long-term financial gains. To date, this supply chain focus has enabled Incitec Pivot to achieve reductions in trade working capital in excess of A$150 million since 2005.

Incitec Pivot's performance culture
Incitec Pivot's success and the execution of its strategy are driven by a performance culture based on a set of corporate values created by Incitec Pivot employees. The values underpin the high standards by which Incitec Pivot operates.