Sasol and Mitsubishi Launch $300 Million Dia Acrylates Plant in South Africa

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Researched by Industrialinfo.com (Industrial Information Resources Incorporated; Houston, Texas) A venture between Sasol (NYSE:SSL, JSE: SASOY) (Johannesburg, South Africa) and Mitsubishi Chemical Corporation (MCC) (TOKYO: 4010) (Tokyo, Japan) saw the commissioning in mid-November of a new $300 million plant sited on the South African company's home turf at Sasolburg in the Orange Free State.

The Sasol Dia Acrylates (SDA) complex will produce acrylic acid and acrylates and will start exporting to global markets in the second quarter of 2004. The new project also forms a part of Sasol's long-term plan to move away from fuels into higher margin chemicals.

Sasol and MCC each hold 50% of the global marketing joint venture which owns 50% of the production joint venture. SDA's head office is in Johannesburg with MCC's Takeshi Kimura as president and Sasol's Sawas Pouroullis as vice-president.

"We believe that this business alliance with Sasol will give us an opportunity to strengthen our position in the global acrylic acid and acrylates market. MCC is pleased to have a good partnership with Sasol, the pioneer of coal based energy and chemicals in South Africa," said Masaoki Funada, MCC's CEO for petrochemicals. Sasol CEO, Pieter Cox said that his company was glad to be able to use MCC's technology and work in association with one of the largest chemical manufacturing and marketing companies in Japan.

The global crude acrylic acid market is estimated at 300 million tons a year. SDA will produce 80,000 tons of crude acrylic acid (CAA) and 125,000 tons of acrylic acid derivatives (n-butyl acrylate, ethyl acrylate and acrylic acid. The feedstock for the complex, ethanol, n-butanol and propylene will be available from Sasol's other production facilities, making it the only producer in the world to be backward integrated into all feedstocks (PEC 85000081/82/84).

Sasol commissioned a new 150,000 ton per annum n-butanol plant at Secunda, South Africa, using MCC technology under license, earlier this year. (PEC 85000068)

By replacing South Africa's annual imports of acrylic acid and acrylates requirements, production at SDA could save the country $22 million a year in the short term and as much as $50 million a year in the long term. Exports of product are expected to contribute around $190 million a year to the country's balance of payments when the plant reaches full production levels in 2005.

Sales will be made to Asia, Europe and the Americas through the two companiesý sales and distribution networks. The chemicals are used in a wide range of industrial and manufacturing process including; mining, water based paints, disposable diapers, coating, chemical fiber, spinning and weaving, adhesives, leather tanning, paper, oil and detergent industries.

3,000 jobs were created during the construction of the new complex and 90 permanent jobs at completion. Downstream job creation in related industries is expected to be significant.