TFR acting CEO Russell Baatjies and Sasol CEO Fleetwood Grobler sign the agreement, alongside their respective teams
JSE-listed Sasol has signed a five-year public-private partnership (PPP) agreement with Transnet Freight Rail (TFR), under which the energy and chemicals group will fund the maintenance and repair of a dedicated fleet of 128 ammonia tankers that service Sasol’s Secunda and Sasolburg facilities.
Sasol base chemicals VP David Mokomela described the agreement as a first-of-its kind and said it would secure the transport capacity and reliability needed to supply the market.
Ahead of the deal, CEO Fleetwood Grobler told shareholders that the performance of both Transnet and Eskom had weighed heavily on the group’s performance in the interim period to the end of December, noting that the sales from its chemicals unit had been constrained by “persisting supply-chain challenges in South Africa”.
Sasol Chemicals produces and sells more than 540 000 t/y of ammonia, which is used to make a variety of fertilisers and industrial chemicals for the agriculture, mining, textile, and metalworking industries.
AECI, which is a large customer and uses the ammonia to produce explosives, welcomed the announcement of the PPP, which it said should help improve the reliability of deliveries between Secunda and its Modderfontein facility, in Gauteng.
However, AECI would continue to pursue a hybrid sourcing strategy, including imports through the Port of Richards Bay, to diversify its sources of ammonia supply.
Acting TFR CEO Russell Baatjies expressed appreciation for Sasol’s support and described the agreement as a “significant step toward addressing the industry’s current capacity challenges and protecting the ammonia rail supply”.
TFR and Transnet Engineering, the unit appointed to execute the Sasol ammonia fleet’s maintenance and repair work, expected additional revenue generation from anticipated increased haul volumes and the Sasol-funded maintenance and repair work.