MOSCOW (MRC) -- South Africa's Sasol plans to cut jobs and end West African oil operations as part of a business revamp, the petrochemicals producer said on Thursday, adding it had also agreed a deal with lenders to relax borrowing rules, said Engineeringnews.
Sasol has been reviewing its business as it struggles with high debt levels, falling oil and chemical prices and lower global demand due to the Covid-19 pandemic.
The company, the world's top producer of motor fuel from coal, said the review had identified chemicals and energy as the focus areas for its future business.
"The revision of our strategy aims to have a greater focus on enhanced cash generation, value realisation for shareholders and business sustainability," it said in a statement.
Sasol said the revamp would affect its workforce, but did not say how many jobs might be lost. The company said it was seeking consultations with trade unions in South Africa and aimed to do the same in other countries.
It also said it had concluded discussions with lenders, adding they had agreed to waive a debt test due this month and relax one due in December 2020. That test will allow the firm to have net debt of four times earnings before interest, tax, depreciation and amortisation, up from three times previously.
The company added its liquidity headroom would remain well above USD1-billion.
As MRC wrote previously, in mid December 2019, Sasol announced that the LCCP Ethane Cracker was increasing production rates following the successful replacement of the acetylene reactor catalyst. Sasol’s Ethane Cracker with a nameplate capacity of 1.54 million tons per year achieved beneficial operation in August 2019 but has run approximately 50-60% of nameplate capacity due to underperformance of the plant’s acetylene removal system. The company stated that the issue had been resolved then.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.
Sasol is an international integrated chemicals and energy company that leverages technologies and the expertise of our 31 270 people working in 32 countries. The company develops and commercialises technologies, and builds and operates world-scale facilities to produce a range of high-value product stream, including liquid fuels, petrochemicals and low-carbon electricity.
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