Sasol has declared force majeure on the export of certain chemical products as the heavy rainfall and floods in KwaZulu-Natal have impacted the business.
The group, a producer of synthetic fuels and chemicals, said its quarterly volume outlook may also be impacted “subject to the extent of infrastructure damage and the timing of the recovery and restoration of key infrastructure and utilities”.
Force majeure frees parties from contractual obligations in the case of an extraordinary event which prevents them from performing.
“At the stage, only production rates at certain plants in Sasolburg have been impacted due to the damage on the Sasolburg-Durban railway infrastructure… The impact of the disruption cannot be quantified at this stage,” the group said.
In a production update released on Monday, Sasol committed to update the market of any material impacts.
The group said it is supporting its employees and communities during this period.
Last week it announced it would donate R7.5 million to support emergency relief efforts in KwaZulu-Natal.
In the production update for the nine months ended in March, Sasolburg volumes were 11% lower than in the comparative period, resulting from coal supply issues. Liquid fuels sales were however 5% high due to a recovery in fuel demand.
Chemicals sales volumes from Sasol’s South African assets were 10% lower but this was offset by higher prices, resulting in a 16% jump in sales revenues.
Sales volumes from the group’s American and European chemicals assets were also lower, but revenues were 60% and 31% higher, respectively.