South Africa’s Sasol looks to avoid US tarriffs

The chief financial officer (CFO) of South African petrochemicals company Sasol Walt Bruns revealed on August 25 that that the firm was looking to limit the impact of increased US tariffs on its chemical exports, with the policy set to harm around $80mn in sales – according to Reuters.

Brun’s announcement comes amid shifting global priorities, with US President Donald Trump introducing a 30% tariff on South Africa earlier this month. Trump’s new trade war, extended to the African country, now threatens exports worth billions typically sent to the US.

Sasol itself – which also runs a chemicals facility in the US – currently exports around 10% of its South African produce to the country.

Speaking to Reuters in an interview, Bruns said that he could potentially mitigate around “$20 to $30mn” of the expected $80mn in losses. “Some of our customers are willing to allow us to pass on the higher cost to them. If not, then we can re-allocate some of the product to Asia, so there'll be a bit of a shift from a supply chain point of view,” he said.

Speaking to analysts about the US tariffs, Sasol’s CEO Simon Baloyi predicted that the new policy would likely not be a major threat to the company. “We produce what we sell in the US mainly in the US,” he noted.

Although US tariffs are likely to have some effect on the company, Sasol is not in a precarious position overall. The firm recently gained a 4.3bn rand ($242.1mn) payout from Transnet following a legal suit that claimed the state-owned company had overcharged to transport oil over the course of multiple years.

Sasol has also been able to avoid dividend payments, according to Reuters, due to its $3.7bn net debt remaining above a debt cap of $3bn – part of the terms of its dividend policy.