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Sasol settlement agreed with Competition Tribunal
The Competition Tribunal confirmed the settlement agreement between Sasol Nitro and Competition Commission Subsequent to the confirmation hearing held on 14 July 2010, the Competition Tribunal confirmed the settlement agreement between the Competition Commission of South Africa and Sasol Nitro, a division of Sasol Chemical Industries Ltd, relating to allegations of abuse of dominance in its fertiliser businesses. In terms of the confirmed settlement Sasol Nitro will restructure its fertiliser business as outlined in the announcement of the settlement agreement of 5 July 2010. No finding was made relating to abuse of dominance and accordingly no administrative penalty was sought. Nevertheless, Sasol believes the restructuring will address the Commission's concerns regarding its position within the nitrogen based fertiliser value chain.
Sasol Nitro will withdraw from certain downstream activities with increased focus on the core activities of its fertiliser business. The confirmed settlement agreement has the effect of a full and final settlement of the alleged contraventions of excessive pricing and exclusionary practices, which are the subject of the Nutri-Flo and Profert referrals. The confirmed settlement agreement, together with the changes to the Sasol Nitro business, will not have a material adverse financial impact on the Sasol Group.
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Sasol to explore for shale in Karoo
Business Report noted that Sasol will explore for shale gas in South Africa's Karoo Basin in a joint venture with Statoil ASA and Chesapeake Energy Corporation. Sasol said the joint venture was awarded a permit to explore for shale gas in the Free State, Eastern Cape and KwaZulu-Natal.
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Sasol settles with competition commission
Sasol Nitro, a division of Sasol Chemical Industries Ltd, has concluded a settlement agreement with the competition commission of South Africa, relating to its fertiliser business. This agreement is scheduled to be considered by the competition tribunal on 14 July 2010. Sasol Nitro and the commission have been engaged in settlement discussions, regarding alleged contraventions of the competition act, pertaining to excessive pricing and exclusionary practices. The discussions have been focussed on addressing outstanding matters raised by Nutri-Flo and Profert, from the mid- 2000s.
The settlement will see Sasol Nitro restructuring its fertiliser business. Sasol Nitro does not believe it engaged in excessive pricing and exclusionary practices. Sasol believes the restructuring will address the commission's concerns regarding Sasol's position within the nitrogen based fertiliser value chain, while also opening the industry to more competition. Sasol Nitro will withdraw from certain downstream activities with increased focus on the core activities of its fertiliser business. Sasol Nitro approached the commission with this structural solution and has undertaken several changes to its fertiliser business model:
- Divesting its regional blending capacity in Bellville, Durban, Kimberley, Potchefstroom and Endicott whilst retaining its full production activities in Secunda.
- Altering Sasol Nitro's fertiliser sales approach to a Secunda ex-works model. All fertiliser retail agent contracts will be phased out and a new fertiliser sales operating model formulated.
- Pricing all ammonium nitrate based fertilisers on an ex-Secunda basis.
- Phasing out ammonia imports on behalf of customers in South Africa.
Approximately 50 permanent Sasol Nitro employees will be affected by the restructuring as well as approximately 90 commission-based agents. Over the implementation period, Sasol Nitro will work with the affected parties to, as far as possible, limit the impact of the changes on the staff. Sasol ChemCity, Sasol's business incubator, will facilitate interested parties in the development of business opportunities that may arise from the restructuring. The agreement will be a full and final settlement of the alleged contraventions of excessive pricing and exclusionary practices, which are the subject of the Nutri-Flo and Profert referrals, but requires confirmation by the tribunal. As the commission is of the view that the settlement will address their competition concerns, the commission has not sought an administrative penalty. The proposed settlement together with the changes to the Sasol Nitro business will not have a material adverse impact on the Sasol group.
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