corporate review

Black economic empowerment

The Group continues to progress satisfactorily in building a meaningful and sustainable black economic empowerment (BEE) programme. Highlights of Sasol’s BEE commitment include the Group’s involvement with, and support for, businesses and other initiatives such as Exel Petroleum, ChemCity, PQ Africa, Macadam Franchise Company and various new independent chemical companies. The Mozambique natural gas project will, in time, also entail a significant BEE component.

These and other positive developments are complemented by a Group-wide affirmative procurement and supply management initiative focused on opportunities to purchase a greater percentage of goods and services from organisations owned and operated by people from historically disadvantaged groups.

Sasol’s commitment to affirmative procurement has grown considerably since the 1997 financial year when the Group purchased, in value, R93,3 million of all its goods and services from BEE and related empowerment enterprises. By the close of the 2000 financial year the value had grown to R341,4 million. By midyear for the year under review, the value had increased to R594,2 million (annualised).

Exel Petroleum gathers impetus  Besides the multifaceted entrepreneurial development initiatives that have long been supported by Sasol through its well-established corporate social investment programmes, the Group’s BEE commitment commenced in earnest in February 1997 when it was instrumental in the formation of Exel Petroleum. Excel is controlled by black groups and Sasol holds a minority 22,5% stake. This company has shown tremendous growth over the last four years and operates more than 100 service stations countrywide. It already has a 2% national petrol market share and a 4,6% national diesel market share. The company plans to significantly expand this market share over the next five years.

ChemCity seeks 51% BEE component  ChemCity International was reported under SCI in the previous two annual reports. ChemCity has since been repositioned as a BEE initiative with the ultimate aim of achieving a 51% BEE ownership. Sasol and its joint-venture partner, Gensec Bank, have since secured an additional partner, Real Africa, one of South Africa’s largest and most promising BEE companies.

Tosas creates promising new businesses  Tosas, the Sasol/Total South Africa bitumen production and marketing joint-venture company, has facilitated the establishment of promising joint ventures with extensive BEE participation. Sasol and Tosas facilitated the shareholdings of Exel and BT Sec in Black Top Holdings, resulting in control of this successful road construction company with an annual turnover of about R300 million.

In a collaborative venture with PHR Partnership, Tosas has established Macadam Franchise Company (MFC), which participates in public-sector road construction and maintenance contracts. MFC specialises in labour-intensive road contruction activities through BEE franchises.

Unlocking other downstream opportunities  Sasol Technology, on behalf of the Group, operates a downstream chemical industry development (DCID) initiative. To date, this programme has been instrumental in establishing 12 new chemically oriented businesses, four of which have a BEE component. These businesses, combined, manufacture or blend and then market and support products such as water-treatment chemicals, industrial cleaning chemicals, zirconium chemicals, lime sulphur, anhydrous sodium sulphate, hair-care products and plant extracts such as essential oils.

To date, these businesses have created 283 new jobs. Established and prospective entrepreneurs continue to approach the Sasol Technology DCID team with new business plans and ideas with a view to establishing other downstream chemical businesses.

Another promising initiative  Sasol gas is currently establishing new partnerships with BEE groups for the future marketing and distribution of pipeline gas in KwaZulu-Natal and Mpumalanga. The first-step partnership in Durban South will involve sales of around R150 million per annum. The company has also signed a long-term supply contract with Egoli Gas, the Johannesburg-based utility joint venture owned by BEE groupings and the US-based utility group, CINergy.