BMI's Executive Summary

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Industry Overview

South Africa is placed among the 25 leading chemical-producing nations in the world. It contributes significantly to the global chemicals industry. The chemicals sector is South Africa's largest in terms of value-added output as well as the fourth-largest employer in the manufacturing segment. The industry is dominated by basic chemicals, with major production of liquid fuels, olefins, organic solvents and industrial mineral derivatives. Various products including plastics, pulp and paper chemicals, rubber, agricultural chemicals, fertilisers, paints and explosives are produced in the country. Main players in the industry include South Africa-based Sasol, AECI, Afrox, African Products and Omnia, Germany's Hoechst, Bayer and BASF, US-based Shell Chemicals and Rohm and Haas, and UK-based Engen Petroleum and Ineos Silicas.

Competitive Advantage

The country offers a competitive advantage in terms of raw materials and feedstock. There is an abundance of mineral feedstock for manufacturing chemicals. The rock phosphate available in South Africa is benchmarked as being of the highest quality. Another advantage is electricity. The cost of South African electricity, at 24.63 cents per kilowatt hour (kWh), is one of the lowest in the world. This makes South Africa a highly competitive location for energy-intensive industries. The country provides a welldeveloped infrastructure that is suitable for chemicals industry development.

Industry Developments

In April 2007, Straits Chemicals outlined plans to spend ZAR5.8bn in building a chlorine manufacturing and desalination plant at Coega industrial development zone. The first phase of Singapore-based Straits' investment would amount to ZAR1.1bn. To be completed in two years, the plant would produce 600 tonnes of chlorine a day for export and the local market. In June 2007, it was reported that AECI would sell Dulux to its former shareholder, Imperial Chemical Industries (ICI), the UK's largest maker of specialty chemicals. The deal reunites the southern African operations of Dulux with ICI's global Dulux brand. The sale includes Dulux's South African operations as well as subsidiaries in Botswana, Malawi, Namibia, Swaziland and Zambia.The deal is worth ZAR745mn.

Industry Forecast

Major investments in the basic and high-value speciality chemical segments are likely to drive growth in the chemicals industry. However, the domestic industry will concentrate on speciality chemicals owing to their higher revenue-generating capacity. The basic chemicals segment reported sales of about ZAR42.77bn (US$6.03bn) in the first 10 months of 2007. The South African industry is also likely to cater to robust domestic demand, apart from rising global off take for chemical products.

Contents

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Chapter 1 - Executive Summary

Industry Overview

Location of Chemicals Plants

Industry Developments

Industry Forecast

South Africa Chemicals Industry SWOT

South Africa Business Environment SWOT

Chapter 2 - Market Overview

Raw Material And Feedstock

Utilities

Environmental Awareness

Chapter 3 - Market Structure

Basic Chemicals

Other Chemicals

Intermediate Chemicals

Plastics

Chemical End-Products

Speciality Chemicals

Chapter 4 - Market Size

Seasonally adjusted sales: Chemicals and Related Products

Imports And Exports

Table: Top 5 South African Export Destinations - Chemical Products and Allied Industries

Table: Top 5 South African Import Locations - Chemical Products and Allied Industries

Concentration Ratio

Inland Location Of Plants

Dominance Of A Few Suppliers

Weak Vertical Linkages

Chapter 5 - Industry Trends And Developments

Business Environment

Responsible Care Programme

Projects And Expansions

Acquisitions

Chapter 6 - Industry Forecast Scenario

Table: South African Chemicals Industry Sales Forecast (ZARbn)

Chapter 7 - Macroeconomic Forecast

Table: Economic Indicators

Chapter 8 - Company Profiles

SASOL

AECI

OMNIA

Chapter 9 - BMI Forecast Modelling

How we generate our industry forecasts

Chemicals & Petrochemicals Industry

Cross Checks

Competitive Landscape for Middle Eastern & African Chemicals: Sample of  
Companies Ranked

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Rankings and Competitive Landscapes by production and sales; market share and change on previous year; number of employees, ownership structure and year established. Also includes analysis of company expansion, export and investment strategies.