Solidarity labour action puts pressure on Sasol
You’d be forgiven for being puzzled by trade union Solidarity’s insistence that white employees be included in Sasol’s new employee share scheme, which is intended to bolster transformation and increase black ownership.
The union claims it’s in direct violation of the mining empowerment charter and the general practice at mines. The company disagrees. After months of discussions common ground cannot be reached.
But it is best not to underestimate the well-oiled machine that is Solidarity.
Whether by sheer luck or by design, the union, which declared a dispute in January, has begun a three-week strike that coincides with a large planned maintenance shutdown at Sasol operations.
The tactic of choice is “work to rule”, which entails doing the bare minimum in an attempt to slow down the process. Solidarity’s 6,300 members are typically highly skilled and constitute 20% of the company’s 31,000 permanent employees.
It’s not immediately obvious that the industrial action will have a notable effect if you consider that operations are already being closed and production forecasts have been cut. Sasol estimated the shutdown would take two million tons of product out of the production guidance for the year.
But three weeks gives the union time to execute its strategy and increasingly exert pressure on the company.
Sasol had anticipated an improved performance in this financial year. At the release of Sasol’s annual results in August, Bongani Nqwababa, joint president and CEO, said two risks to the outlook included the large planned shutdown not going smoothly, and any unforeseen labour issues.
Unfortunately for Sasol, both T are now on the horizon. wo years ago Bidvest said it would review all its noncore investments.
Indeed, the group has disposed of some of its assets, including the entire interest in Bidvest Namibia Fisheries (Bidfish). But it is the fate of assets such as Adcock Ingram (38.4%) and Comair (27.2%) that many will be interested in.
Presenting the group’s 2018 financial results on Monday, CEO Lindsay Ralphs singled out the two companies, saying they had delivered good performances and helped boost Bidvest’s associate income by 21.7% (R45m ) to R424m.
Given the quality of these two assets, Bidvest is dictating the terms and pace of the disposals. For instance, the sale of the Adcock Ingram interest has not been implemented because Bidvest wants to sell to black investors and has turned away international private equity players interested in it. But facilitating funding for black investors has proven difficult. Failure to get the finance may see the company drop this condition and sell the stake, which has been valued at about R4.5bn, to whoever wants to buy it.
On the other hand, Ralphs has intimated that Bidvest may hold on to its 27.2% interest in Comair, which he has described as an incredible company.
In any event, it is clear Bidvest is in no hurry to dispose of its interests in these two firms — and maybe that is a good thing. Comair and Adcock Ingram look set to continue delivering strong performances for the foreseeable future.