Sasol now a powerhouse

Sasol built its business making fuel from coal. This year, the start-up of a huge new ethylene plant in Louisiana will complete its conversion into a global chemicals player.

The $11 billion Lake Charles project will catapult Sasol’s chemicals revenue to more than 70% of the company’s total once fully running, and the share is likely to get even bigger over time, co-CEOs Bongani Nqwababa and Steve Cornell said.

While it’s still looking to expand the number of gas stations it operates in SA and boost natural gas output in Mozambique, the best international growth opportunities are in specialty chemicals, used in products from cosmetics to hardware, Cornell said.

Trends from population growth to urbanisation will support strong demand for plastics and chemicals into the future, while oil-consumption growth may be limited beyond 2030, he said.

While Sasol’s operational mix is changing, virtually all corners of the business will continue to be linked to crude prices. The company cut costs and took measures to save cash during the three-year oil price slump, including shelving a $14 billion gas-to-liquids plant, also planned in Louisiana.

Once Lake Charles is fully operational, its geographic revenue will be evenly split between SA and the rest of the world, Nqwababa said.

Sasol anticipates $1 billion a year in revenue from the project, after all units are producing by 2020, and about $1.3 billion the following year.

Virtually all corners of the business will continue to be linked to crude prices.