Sasol warns share holders on JSE about production loss due to Solidarity strike
18 October 2018
The petrochemical giant Sasol warned shareholders in a statement on the Stock Exchange News Service (Sens) that its fuel production would probably be between 200 000 and 300 000 tonnes lower this year. In the statement, Sasol ascribes the loss to the longer time it took to complete the maintenance project (shutdown) and to technical problems encountered.
“The delay in the maintenance project is a direct consequence of Solidarity’s strike at Sasol. A statement such as this one sends ripples through the JSE. It creates major uncertainty amongst shareholders. A mandate by Solidarity members yesterday at three mass meetings, that Solidarity should increase the pressure on Sasol, will increase the uncertainty even further,” said Solidarity Chief Executive Dr Dirk Hermann.
Solidarity began the strike on 6 September, in the middle of the shutdown. The withdrawal of the Solidarity members’ skills during this shutdown led to major disruptions at the Secunda plant. According to Solidarity, they chose this specific time for the strike precisely because they knew that their members’ skills were needed for the maintenance project.
Sens statements are used by the Johannesburg Stock Exchange (JSE) to provide information that can have direct impact on movements in the market.
Solidarity members decided to go on strike after Sasol excluded white employees from its employee share ownership plan, Khanyisa. The CCMA attempted to resolve the dispute, but Sasol refused to make any concessions.
In the Sens notice Sasol states that its forecast for its annual output was reduced to between 7,5 million and 7,6 million tonnes. In its financials published on 20 August it was stated that the Secunda plant would produce 7,8 million tonnes. The adjusted estimates are now down by between 200 000 and 300 000 tonnes.
According to Hermann, Sasol is experiencing those technical problems it referred to in the Sens notice as a result of skilled workers who went on strike.
“Sasol and its shareholders are now paying the price for excluding its skilled workers from the Khanyisa employee share ownership plan. Solidarity members have shown Sasol what power lies in knowledge.
“The production loss which is amounting to millions of rands, and the decline in shareholder confidence will ultimately exceed the cost of what it would have cost the company to do the right thing by including white workers in the employee share ownership plan.
“Sasol is going to pay the price for its racial decision for a long time to come. Workers are still excluded from the plan and are being alienated. Production losses will continue to mount to reach even more millions of rands.
“We are amazed that Sasol would be prepared to absorb a loss of so many millions of rands for a racial plan that cannot be justified morally,” Hermann said.
Meanwhile, at the mass meetings that were held yesterday, Solidarity members gave it a mandate to up the pressure on Sasol. This will culminate in a mass march on 25 October to Sasol’s Head Office in Sandton, as well as a in a court case to test Khanyisa’s lawfulness.
The Sens notice appears here below:
However, in Secunda, the planned full shutdown at our Sasol Secunda
Operations (SSO) West factory was longer than estimated mainly due to technical issues with the Steam Header 2 project and challenges with start-up which further delayed the commissioning date. The extended shutdown impacted our production and sales volumes across the value chain. We are however confident that we will achieve our planned production targets for the remainder of the year. The longer shutdown will result in annual production guidance reducing to 7,5 – 7,6 million tons.
Issued by Dirk Hermann, Chief Executive, Solidarity, 18 October 2018
