Aug 05, 2011
Afrox not receiving bulk volume allocation from refineriesBack
“We are concerned about the refineries’ capabilities going forward. We must establish a better supply chain in LPG, which will include importation in the next year or two,” Kruger said at the Afrox interim results presentation for the six months ended June 30.
He added that, although the company has made good progress, cost and price management and plant reliability will remain challenges going forward.
“We have made huge strides in managing our costs but they will remain a focus area going forward in an economy that has labour inflation of over 10%.”
On price management, he added that the company was comfortable with its competence in managing pricing but warned that the fragile economy was not going to save the company – it needed to save itself.
“I do not believe that for the rest of the year, we are going to see huge growth. July is going to be a disaster for most companies in view of the strikes we have had. We have to manage those issues and get through them as an economy, which puts a damper on expectations for the second half of the year,” said Kruger.
Afrox also announced that it had been unsuccessful in the renewal of the Highveld supply agreement, which had led to an impairment of the R152-million assets associated with its Highveld plant.
Evraz Highveld Steel & Vana-dium’s decision not to renew a gas supply contract followed Highveld initiating arbitration against Afrox last year, because it lost a “substantial volume of tons” of steel and vanadium because of gas supply disruptions.
Kruger pointed out that capacity at its Pretoria and Wadeville plants would be increased to fill the gap of supplying gas to the merchant market if the Highveld plant was closed.
“We will have enough products for at least three years. The argon will be procured from other sources. “It is embarrassing for us to have lost that contract. It is not something that we planned, but that is not the end of Afrox,”
He noted that the tonnage business was important from an integration point of view, but relatively small if one looked at the numbers.
Edited by: Martin Zhuwakinyu
Creamer Media Senior Deputy Editor
To subscribe email firstname.lastname@example.org or click here
To advertise email email@example.com or click here
Other Video News
Recent Research Reports
Energy Roundup – May 2016 (PDF Report)
The May 2016 roundup covers activities across South Africa for April 2016 and includes details of the National Energy Regulator of South Africa’s proposal to introduce a coal benchmark cost as part of its final decision on Eskom’s multiyear price determination...
Automotive 2016: A review of South Africa's automotive sector (PDF Report)
Creamer Media’s Automotive 2016 Report provides an overview of South Africa’s automotive industry over the past 12 months. The report provides insight into local demand and production, vehicle imports and exports, investment and competitiveness in the sector, as well...
Energy Roundup – April 2016 (PDF Report)
The April 2016 roundup covers activities across South Africa for March 2016 and includes details of a North Gauteng High Court Judge’s dismissal of a court application to postpone the 9.4% electricity tariff increase, which the National Energy Regulator of South...
Electricity 2016: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2016 report provides an overview of South Africa’s electricity sector, focusing on State-owned power utility Eskom and independent power producers, electricity planning, transmission, distribution and the theft thereof, besides other issues.
Energy Roundup – March 2016 (PDF Report)
The March 2016 roundup covers activities across South Africa for February 2016 and includes details of the Department of Energy’s plans to announce the preferred bidders for the first tranche of the coal independent power producer procurement programme; the Council...
Steel 2016: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2016 Report examines South Africa’s steel industry over the past 12 months. The report provides insight into the global steel market and and particularly into South South Africa’s steel sector, including production and consumption, main...
This Week's Magazine
The two spent-fuel pools at Eskom’s 1 800 MW Koeberg nuclear power station, in the Western Cape, will be full by 2018, increasing the urgency on the State-owned utility to begin pursuing alternative storage options. Koeberg has, over the past 32 years, accumulated a...
South Africa lacks the skills necessary to implement the government’s plan to build 9.6 GWe of new nuclear energy capacity, warns nuclear-qualified Quality Strategies International CEO David Crawford. “Apart from the concern about the affordability of the programme,...
Cybersecurity multinational Check Point has released its latest 700-series cybersecurity systems for small businesses, which draw on its international threat intelligence to provide up-to-date cybersecurity, says Check Point South Africa country manager Doros...
Daimler Trucks and Buses Southern Africa (DTBSA) saw a marked slip in new-vehicle sales in 2015 compared with 2014, with sales dropping from 5 897 units to 5 300 units. The decline came as the South African new truck and bus market declined from 31 558 units in 2014...
Group of 20 (G-20) economies threatened to penalise havens that don’t share information on their banking clients after the leak of the Panama Papers provoked a global uproar over tax evasion. The G-20 will consider “defensive measures” against financial centers and...