Johannesburg — PETROCHEMICALS group Sasol would spend R8,4bn in an investment to double its production of hard wax in SA, the company said yesterday.

This will be a boost to Sasol's chemicals business, which has taken strain from the global financial crisis.

The investment comes while the company has embarked on a cash conservation approach that earlier this year saw it slash its capital expenditure by 40%.

But CE Pat Davies has said Sasol has what he calls a flexible approach to the capital expenditure programme.

This, he said, would enable its pipeline of growth projects to continue. Davies has said Sasol will keep its growth strategy unchanged.

Sasol has a strong cash position. In the past financial year, operating activities generated R48,2bn. The strong balance sheet has enabled the group to fund its growth programme.

The Sasol wax project was one of the growth initiatives the company singled out when it released its financial results for the year ended June 30.

At the time, the group said it was going ahead with the basic engineering and environmental approvals for the project.

Other key projects include Project Mafutha, the coal-to-liquid plant planned for inland SA, and the feasibility study into a coal-to- liquid plant in China.

Sasol said the project to increase hard-wax production would be implemented in two stages, starting in 2012.

It had completed the basic engineering and had ordered some of the long-lead items. The second phase of the project would be in operation by 2014.

"This large investment shows Sasol's commitment to the wax business and enables us to grow with our customers in this market," Sasol Wax MD Johan du Preez said yesterday.

Sasol Wax manufactures, markets and supplies wax, petroleum jellies and liquid paraffins. According to Sasol the project would result in increased production of medium waxes, mostly used by the candle industry in southern Africa, as well as liquid paraffins, which are used in a variety of industrial applications.

The company's Sasolburg plant produces synthetic waxes.

"This is a significant investment for the Sasolburg site and demonstrates our commitment to our South African asset base," said Reiner Groh, Sasol GM for the chemical cluster. "It is in line with Sasol's strategy to leverage our advanced proprietary technology and is also aligned with our longer-term plans to significantly grow the chemicals businesses of the Sasol group."

Sasol recently courted controversy after the European Commission last year fined it €318,2m for its role in a paraffin cartel in Europe.

The company is appealing against the fine.

Sasol's share price was up 1,96% at R296,50 yesterday.

SASOL

Full year 2009 2008

Revenue (Rbn) 137,8 129,9

Pretax (Rbn) (24,2)33,7

Net income (Rm)13,723,5

Headline EPS (c) 25,42 38,09

Dividend PS (c) 8,5013,0