Statement of the Joint Presidents and Chief Executive Officers

Stephen Cornell and Bongani Nqwababa


Joint CEO


Joint CEO


Intensifying our focus on safety

Progressing our value-based strategy

Rebalancing our portfolio

Enhancing our robust foundation

Driving economic, environmental and social value

Dear stakeholder,

This past year, the strategic priorities we drove were underscored by value, focus and discipline: we refined our strategy to drive sustainable value creation, sharpened our focus to leverage our core strengths, while embedding increased discipline in how we allocate capital.

In summary, our value-driven strategy is premised on further enhancing our foundation businesses; leveraging our competitive strengths in specialty chemicals globally, Africa-focused exploration and production and growing retail fuels in Southern Africa; underpinned by a robust capital allocation framework.

This, we strongly believe sets us on a clear path for sustainable growth and accelerated shareholder returns.

In 2018, we delivered a resilient set of results through our sustained focus on factors within our control, while recording steady progress against our confirmed strategic priorities.

Progressing our value-based strategy

In a complex and uncertain world, our strategic choices are informed by megatrends pointing towards global population growth and further urbanisation, shifts to even greater efficiency and performance, in all aspects of business, supported by digitalisation and sustained volatility in both crude oil prices and exchange rates.

By our assessment, supported by in-depth expert analysis, it is evident that megatrends influential to our business will result in greater demand for chemicals and energy products in key markets we serve.

Intensifying our focus on safety

For the reporting period, our safety recordable case rate was 0,27, our lowest to date. This reflects overall improvement in our safety performance on most of the indicators we measure.

Regrettably, our safety performance was marred by four tragic employee fatalities. This past year we mourned the loss of Mr Nelson Vilanculo, Mr Dumisani Sibanyoni, Mr Mandla Mahlangu and Mr Nefthali Sepeame.

We are deeply disheartened and utterly disappointed by these losses and have redoubled our efforts to proactively eliminate fatalities and high severity injuries in our operations.

For the year we recorded notable progress in delivering on our strategic priorities, by further advancing opportunities in our Energy and Chemicals businesses and progressing our large capital projects in North America and Southern Africa.

In the US, we made good progress on our Lake Charles Chemicals Project (LCCP) with indications that the costs will remain within the previous market guidance of US$11,13 billion. As at end June 2018, engineering, equipment fabrication and procurement were complete and construction progress reached 68% completion. Overall, the project is 88% complete with capital expenditure amounting to US$9,8 billion.

The steam utility system, a critical component and enabler for the start-up of other units, achieved first steam production in July 2018. The project remains on track the linear low-density polyethylene facility is expected to reach beneficial operation (BO) in the second half of calendar year 2018. It will be followed by the start-up the first ethane cracker and ethylene oxide/ethylene glycol units reaching BO shortly thereafter. The expected start-up date of the remaining manufacturing units are still within schedule for calendar year 2019.

Our marketing and distribution channels have been negotiated for effective product placement. This, bolstered by global market demand that is poised for long-term growth, allow us to deliver a differentiated product mix through LCCP. Furthermore, we have sales contracts with existing and new customers, reinforcing our competitive position in the market.

Looking at Southern African, crucial for the sustainability of our integrated value chain is long term security of gas feedstock, since coal feedstock is already secured to at least 2050 given the near-finalisation of our R14 billion mine replacement programme. We commissioned the R13,6 billion FT Wax Expansion Project (FTWEP), phase 2 which began beneficial operation in March 2017.

Mozambique remains central to our gas strategy where we are stepping up efforts to secure long-term gas feedstock, while delivering on our stakeholder commitments. Here, gas from the Production Sharing Agreement (PSA) field development plan is prioritised for the development of a gas-to-power plant in Mozambique. While the optimal size and capital investment is being determined, surplus gas monetisation options will be jointly developed with our partners.

Rebalancing our portfolio

As part of our refined strategy, we made tough calls to rebalance our portfolio and bring focus to our growth aspirations, which required that we de-emphasise certain aspects of our business.

First, we have taken the decision not to invest in further greenfields gas-to-liquids (GTL) projects. While our current GTL and coal-to-liquids (CTL) assets are generating good returns and cash flows, the external environment, continued volatility and our view of mega-trends will simply not support more green-field investment in these technologies.

We will continue to work on opportunities to optimise and improve our existing facilities in regard to catalyst performance, product yields and energy efficiency. We see further opportunities to high-grade the value from our GTL molecules through base oil extraction. We will also continue to license and support our Fischer Tropsch technology and utilise our 50+ years of know-how in partnerships with others.

Second, we have looked at our business portfolio and made the call not to invest in any additional new crude refining capacity. This decision was informed by the large investments that will be required to meet changing fuel specifications in South Africa and a lack of any clear competitive advantage for Sasol outside our existing positions in the country.

Similarly, we have made an important call on commodity chemicals. Although we have a solid foundation business in commodity chemicals and a world-scale facility under construction in Lake Charles, the risk/reward profile for such projects is larger than we wish to take on in future.

Strategic investments in feedstock-advantaged locations may still be considered, but mega-scale commodity biased investment will only be considered in partnerships that lower our risk exposure.

We will certainly be investing in extracting further value from our Lake Charles and Secunda Operations in either commodity or specialty chemicals, but pursuing further commodity chemicals investments will primarily take place where this can support specialty chemicals growth.

Driving economic, environmental and social value

As a company proudly rooted in our South African heritage, we are firm in our commitment to redressing the inequalities of this country's past. Here, we believe that transformation in the form of share ownership, in Sasol South Africa Limited (SSA), by previously disadvantaged groups is an important business, social and moral imperative.

On 1 June 2018, Sasol Khanyisa, our new innovative R21 billion Broad-Based Black Economic Empowerment (B-BBEE) ownership structure was implemented, as one of the key focus areas of Sasol's broader transformation programme.

Stephen Cornell

"Our value-driven strategy is premised on further enhancing our foundation businesses, leveraging our competitive strengths in specialty chemicals globally, Africa-focused Exploration and Production and growing retail fuels in Southern Africa."
Stephen Cornell

Bongani Nqwababa

"We strongly believe our strategy sets us on a clear path for sustainable growth and accelerated shareholder returns."
Bongani Nqwababa

Enhancing our robust foundation

Key to enhancing our foundation businesses, is accelerating efforts to embed continuous improvement.

In this regard, we are actively and continuously managing our portfolio of assets. We will retain or fix those assets that will increase our returns, while exiting those that are not in line with our strategy and have lower than desired returns.

Approximately 75% of our assets review has been completed with the majority of assets to be retained and with some earmarked for growth.

Assets worth more than US$1 billion in net asset value have been identified for divestment. These include our shareholding in our Malaysian assets which we sold to PETRONAS for US$163 million.

We have also commenced active marketing for our Canadian shale gas assets. As we progress with this and other divestments, we will update the market accordingly.

In terms of business enhancement, our continuous improvement drive is aimed at ensuring our enduring competitiveness at an oil price of US$40 per barrel.

Our target to lift ROIC by two percentage points by 2022 will focus on gross margin, fixed costs and invested capital as key value drivers.

We have already identified 50% of the value enhancing opportunities, focusing on customer engagement solutions, our functions and improving the reliability and margins in our energy value chain.

One of our key Continuous Improvement levers is digitalisation, which has been positioned as a value enabler across all businesses globally.

Khanyisa has approximately 230 000 shareholders, who hold 25% direct and indirect ownership in SSA, a previously wholly-owned subsidiary of Sasol and houses Sasol's most cash generative assets, which include our synthetic fuels, chemicals and gas businesses.

We are also proud to report that we increased our spend with Black-owned businesses from R7,4 billion last year to R12,7 billion in 2018, while our SMME loan book currently stands at R302 million, as compared to R139 million in 2017.

Our commitment to environmental sustainability is to minimise the environmental impacts of our operations. This is reflected in our strategic decision not to pursue CTL growth, and to focus on gas as a bridge to a lower-carbon economy.

Additionally, we invest significantly in reducing our environmental footprint, as demonstrated by our more than R25 billion in capital projects, over the past 12 years.

Informed by ongoing engagement with stakeholders and interested parties, we follow a transparent and collaborative approach to environmental compliance. Sasol has taken a voluntary action to align our external climate disclosures with international leading practices and has signed up to a number of global initiatives, including We Mean Business and the Task Force for Climate-Related Financial Disclosures. We are also revising and refining our approach to climate change management, through additional robustness testing of our strategy and optimised governance, which will inform our ongoing disclosures.

As a founding signatory to the South African Energy Efficiency Accord, we have a long-standing commitment to promoting energy efficiency as a key business driver, in addition to the benefit of greenhouse gas reductions.

Since 2013, we achieved a cumulative energy efficiency improvement of 22% and we are targeting a further improvement of 1% annually between 2019 and 2030.

Regarding air quality, we remain committed to compliance and to promoting sustainable ambient air quality improvement, thereby minimising the environmental impact of our activities. In this regard, we remain on track to advance our committed air quality standards and offsets roadmaps. Taking into account our plant vintage, we anticipate significant challenges in meeting some of the "new plant standards" particularly for boilers sulphur dioxide emissions both from a technical and financial feasibility perspective.

Through social investment we seek to ensure sustainable value creation for society, which we deliver through a range of programmes and initiatives.

This past year, we invested over R800 million towards social investment programmes and a further R1,3 billion in bursaries, learnerships and employee skills.

Looking ahead

One of the priorities in refining our strategy was to map the best way forward for Sasol as a compelling investment, with our overarching objective being to deliver superior value to our shareholders. Our steadfast commitment in 2019 is that we will continue to deliver on our strategic priorities by leveraging our competitive strengths for sustainable value creation.

To stay competitive and deliver on our strategy, our employees, who are the backbone of Sasol, must believe in our value proposition as an employer of choice. In this regard, our ongoing culture transformation programme will focus on building a resilient organisation where our employees' experience Sasol as a great place to work, where relationships are rooted in trust, respect and engagement.

The continued development of high performing employees will enable us to create exceptional value and a culture we all can be proud of.

We wish to acknowledge and thank the people of Sasol – our Board, management and staff, as well as our customers and business partners – for enabling us to achieve the results delivered in 2018.

To you, our stakeholder, we thank you for your continued confidence in our leadership and supporting Sasol as we strive to be a credible stakeholder partner, committed to driving inclusive and sustainable growth in all markets where we have a presence.

Bongani Nqwababa     Stephen Cornell

Joint Presidents and Chief Executive Officers

27 August 2018



  • We strive to avoid all incidents in our pursuit to achieve zero harm and will embrace the newly defined four high severity incident focus areas


  • Drive safe, predictable and reliable operations
  • Delivery on early Continuous Improvement objectives towards a 2% ROIC uplift by 2022 enabled by business improvement, improved margins and digitalisation
  • Delivery on implementation of our environmental roadmaps and offset commitments


  • Deliver on LCCP commissioning, operations and business readiness milestones and increased sales volumes
  • Progress options and actions to secure gas feedstock for our Southern African operations, including Mozambique PSA delivery
  • Progress credible investment options to move us to our aspired portfolio in Chemicals, Upstream and Energy
  • Actively manage the balance sheet to ensure we stay within investment grade metrics as well as providing sufficient liquidity for the company


  • Progress culture transformation and improve our people centred leadership capabilities
  • Further embed the concept of One Sasol in ways of working
  • Fully embed our refreshed values


  • Deliver win-win stakeholder value to enhance our reputation in geographies where we operate
  • Strengthening our sustainability disclosures including verified climate change disclosure
  • Ongoing dialogue and engagement with key stakeholders to shape Sasol's sustainability journey
  • Deliver superior customer experience in support of our step up product volumes to market