Sasol Opens Alcohol Production in China and Cuts Back in Italy

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Researched by Industrial Info Resources (Sugar Land, Texas) -- In global petrochemical and chemical markets high volume demand accompanied by fierce competition is driving constant reviews of optimum plant usage and supply chain efficiencies. The major companies in the field, with plants in regions strung around the world, have the advantage of being able to shift production emphases to suit current conditions. Sasol (NYSE:SSL) (Johannesburg, South Africa) has the plant profile to optimize production and is increasing its competitiveness in the alcohol production market by bringing new capacity online and simultaneously restructuring capacity in some inefficient operations.

In China, the joint venture between Sasol Olefins & Surfactants (SOS) and Wilmar China has stated commercial production at the new 60,000 tons per year oleochemical-based plant in Lianyangang. Kuok Khoon Hong, CEO and Chairman of Wilmar, said the partners were 'extremely satisfied' that the plant had started up very close to schedule and under budget. Hannes Botha, Managing Director of SOS said that his company was positioning the plant to become a key supplier to the fast growing Chinese alcohol market.

At the same time as the Chinese project launch has idled 50% of oxo-alocohol capacity at the Augusta plant in Italy for an indefinite period and the reduction program should be completed in June. This represents about 65,000 tons per year of production. Botha said that the idling was enabled by restructuring upstream paraffin and olefin operations which provide the feedstock for alcohol production. Alcohols produced at other plants in Sasol's network will replace the reduced Augusta capacity. Fixed and variable costs will also be reduced at Augusta.

Reiner Groh, executive director, Sasol Chemical Business Cluster said, "The optimization process forms part of our competitive restructuring of the olefins and surfactants business. The rigorous turnaround of this operation reflects a significant improvement in restoring profitability and acceptable returns in challenging market conditions."

SOS has a total global production capacity of over 600,000 tons per year of alcohols and has manufacturing plants in Europe, U.S., South Africa and China. It is the only company using oleochemical, petrochemical and coal-based feedstocks enabling it to offer a broad portfolio of products including linear, semi-linear and branched alcohols as well as tailor made single fractions and blends to meet specific customer requirements.

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