Sasol announces plan to save money

SECUNDA – Sasol is formulating a comprehensive plan to conserve cash in response to lower international oil prices.

While the detailed actions underpinning Sasol’s response plan are being refined, certain decisive measures have already been agreed to and are being implemented.

According to Mr Alex Anderson, head of Sasol’s Group Media Relations, these include identifying opportunities for additional cash savings targeted over the next 30 months.

The focus areas are capital portfolio phasing and reductions, capital restructuring, working capital improvements, margin enhancement and further fixed cost reductions.

“Cash flow improvements actioned in terms of the response plan will be over and above the current target of at least R4 billion in sustainable cost savings by 2016, which was confirmed last year as part of Sasol’s business performance enhancement programme,” said Mr Anderson.

“As a result of the ongoing capital investment reprioritisation exercise, Sasol has decided to delay the final investment decision on its large-scale, gas-to-liquids plant in Louisiana in the United States of America.

“The timing of the decision will take into consideration progress made with the execution of the company’s world-scale ethane cracker and derivatives complex, prevailing market conditions and other strategic investment opportunities.

Mr David Constable, Sasol’s president and chief executive officer said: “Alhough at a much slower pace, we will continue to progress the gas-to-liquids facility in the USA.

“This will allow us to evaluate the possibility of phasing in the project in the most pragmatic and effective manner.

“North America and our home base in South Africa remain strategic investment destinations for Sasol.”

Sasol is proceeding with the construction of the ethane cracker and derivatives complex in Louisiana.

“Given the robust project economics, the Sasol team is confident that this facility is the first step in developing the site near Lake Charles into an integrated multi-asset, multi-business hub, which will enable future growth for several decades to come,” said Mr Constable.

“In parallel, Sasol will also continue to advance its investments in Southern Africa, including the mine replacement programme and various gas and chemicals projects.

“As the Sasol team finalises the details of its response plan, an update on the actions being undertaken will be provided when results are announced for the first half of the 2015 financial year on 9 March.”

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