R/€ = 14.63
R/$ = 10.58
Au 1286.67 $/oz
Pt 1405.00 $/oz
Mar 11, 2003
New R870m comonomer project for petrochem giantBack
Cox|Gas|Sasol|Sasol Chemical Industries|Chemical Giant’s|Petrochemicals Giant|Plastics|Polyethylene Products|Quality Plastic Products|Steel|Structural Steel|Hannes Botha|Pieter Cox|R10
© Reuse this South African petrochemicals giant Sasol is in the process of spending R870-million on another comonomer project, Engineering News Online can today exclusively report.
This comes against the backdrop of the chemical giant’s modest 4% increase in group earnings, announced gingerly by CEO Pieter Cox at Sasol’s interim financial results presentation yesterday, ahead of the company’s historic April 9 NYSE listing.
The comonomer project, a second 1-octene train, is expected to be commissioned by the third quarter of 2004, at a cost larger than the first 48 000 t/y plant, but with roughly the same capacity.
As a comonomer, 1-octene is used to manufacture different polyethylene products, providing mechanical strength to various types of plastics, including both high- and low-density polyethylene from which quality plastic products are made.
Sasol’s Hannes Botha revealed, in answer to a question, that the company’s board is also expected to approve an even bigger project soon.
This is the R10-billion to R12-billion, Project Turbo, the most significant part of Sasol’s renewal initiative, Project World Class, which will prepare Synfuels for new fuel specifications that are to come into effect in January 2006, the deadline for all South African refineries to supply lead-free petrol and low-sulphur diesel.
Engineering News Online can report that Project Turbo would require the largest portion of the estimated capital for Project World Class and is expected to have significant spin-offs for Sasol Chemical Industries, as it will supply the division with more feedstreams for further expansions. This is part of a R19-billion capex commitment.
Sasol Polymers will also benefit from increased levels of ethylene and propylene from Project Turbo's new processes.
The project consists of multiple phases, which, in turn, comprise several smaller projects.
In total, the project is estimated to require about 17 000 t of structural steel, and the employment of some 15 000 people.
Meanwhile, Sasol’s strong financial performances over the last three years have been followed by a mere 4% increase in operating profit, to R7,3-billion for the interim period to December 31, 2002.
The group’s earnings suffered a R2-billion blow, caused mainly by the strengthening of the rand.
Cox said the rand:dollar exchange rate weakened by 8% from an average of R9,29 in the previous reporting period to R10,03 in this reporting period. While the weaker rate had a beneficial effect on sales, the closing rate on December 31, of R8,57, was much stronger than the closing rate of preceding months and 28% stronger that the closing rate of R11,95 on December 31, 2001.
This resulted in net translation losses of R974-million being charged to the income statement, as a result of the revaluation of financial assets and liabilities on December 31 last year. This compares to net translation gains in the previous reporting period of R922-million and represents a swing of R1,9-billion.
Cox reported that attributable earnings were more or less equal to, and basic earnings per share of 751 cents were slightly above, those achieved in the previous reporting period.
Sasol’s financing costs rose by 23% to R529-million, mainly due to higher capital expenditure, which increased from R3,6-billion to R5,7-billion during the comparable periods.
Increased capital expenditure resulted primarily from the Mozambique Natural Gas project, the Qatari and Nigerian gas-to-liquid (GTL) projects and the n-butanol and acrylic acid projects in Sasolburg.
Top performing divisions during the period were Sasol Synfuels, which lifted profits by 36% – from R3,688-billion to R5,032-billion – and Sasol Mining, up by 10% to R708-million. National pipeline gas sales of Sasol Gas were about 12% higher.
Edited by: Martin Czernowalow© Reuse this Comment Guidelines
Other Energy News
Recent Research Reports
Steel 2014: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2014 report provides an overview of the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon steel and stainless...
Projects in Progress 2014 - First Edition (PDF Report)
This publication contains insight into progress at the delayed Medupi and Kusile coal-fired projects, in Mpumalanga and Limpopo respectively, as well as at the Ingula pumped-storage scheme, which is under construction on the border between the Free State and...
Automotive 2014: A review of South Africa's automotive sector (PDF Report)
The report provides insight into the business environment, the key participants in the sector, local construction demand, geographic diversification, competition within the sector, corporate activity, skills, safety, environmental considerations and the challenges...
Construction 2014: A review of South Africa's construction sector (PDF Report)
Construction data released during 2013 hints at a halt to the decline in the industry during the last few years, with some commentators averring that the industry could be poised for recovery. However, others have urged caution, noting that the prospects for a...
Electricity 2014: A Review of South Africa's Electricity Sector (PDF Report)
This report provides an overview of the state of electricity generation and transmission in South Africa and examines electricity planning, investment in generation capacity, electricity tariffs, the role of independent power producers and demand-focused initiatives,...
Defence 2013: A review of South Africa's defence industry (PDF Report)
Creamer Media’s 2013 Defence Report examines South Africa’s defence industry, with particular focus on the key players in the sector, the innovations that have come out of the defence sector, local and export demand, South Africa’s controversial...
This Week's Magazine
The Electronic Systems Laboratory (ESL) of the Department of Electrical and Electronic Engineering at Stellenbosch University is strongly reaffirming its position as one of South Africa’s leading centres for satellite technology and expertise. It is currently...
The world’s lowest-cost diesel-electric locomotive is not made in China, but in Pretoria, at RRL Grindrod Locomotives’ newly upgraded 30 000 m2 plant. The company’s locomotive pricing is “more competitive than any other original-equipment manufacturer (OEM)...
The South African Defence Review 2012, released to the public at the end of last month (despite the year given in its title) recommends the creation of the post of Chief Defence Scientist. This official would be responsible for the management of defence technology...
AltX-listed engineering technology company Ansys has been awarded an R188-million contract by Transnet to supply integrated dashboard display systems to the freight rail utility’s locomotives. Black-owned and controlled Ansys developed the bespoke integrated system...
South Africa’s sole nuclear power station Koeberg, which is located in the Western Cape, breached a major operations milestone on April 4, which marked the thirtieth anniversary of Unit 1 having been connected to the grid. Eskom, which operates the two-unit plant,...