Input costs, exchange rates and global prices were challenges beyond the company’s control, chairman Paul Brasher told Incitec’s (IPL) annual general meeting.

However the company is cutting costs to offset that and believed it could capitalise on Asian demand for commodities and US shale gas boom to lift its returns, he said.

Demand for Incitec Pivot’s explosives is leveraged to the mining industry and Asia’s demand for commodities.

Despite falls in commodity prices, China was still projected to grow at more than seven per cent in 2015, underwriting strong demand for its products, Mr Brasher said.

The re-industrialisation in the US, driven by the energy revolution, meant the company’s new $US850 million ammonia plant in Louisiana was well placed to deliver strong returns when it started operating in 2016.

The plant was 60 per cent complete with offtake agreements secured with two chemicals companies, chief executive James Fazzino said.

“Our Louisiana ammonia plant is capitalising on low cost gas, a world class regulatory regime and a low cost and productive construction industry in the USA,” he said.

Mr Brasher called for a coherent energy policy that encourages new projects to ensure manufacturers get reliable, reasonably priced supplies of gas.

The price of domestic gas is set to rise sharply as Queensland burgeoning gas sector begins exporting from Gladstone.

“This always leaves us open to accusations of rent seeking but, in fact, it is a call for a coherent energy policy for this country which is sorely needed as a basis for our economic future,” he said.

Incitec Pivot recently struck a deal with central Australia-based Central Petroleum to buy its natural gas to head off the supply crunch, but is not yet in production.

At 2.15pm (AEDT), Incitec Pivot’s shares were 12 cents, or 3.8 per cent, stronger at $3.26.

AAP