Afrox retains R150m Sasol deal

AFROX has retained a contract worth R150-million to supply Sasol with compressed gases for the next five years.

The company also plans to supply several Eastern Cape clients with gas produced at the R350-million air separation unit (ASU) in Port Elizabeth.

The ASU is in an advanced stage of construction, with its cold box arriving at the Coega industrial development zone (IDZ) last month.

Afrox said Sasol had purchased a wide range of hard goods on contract in January and this contract was extended until January 2019.

The company last month released its consolidated interim financial statements for the six months ending June 30. Revenue was flat at R2.87-billion compared with R2.86-billion last year

The company said the results were influenced by the "challenging trading environment reflecting the continued decline in the manufacturing, mining and steel sectors in South Africa, exacerbated by the five-month strike in the platinum sector and spill-over effects of Afrox's own strike in the first quarter" but that the group's underlying business remained strong with long- term growth plans.

The ASU at the Coega IDZ forms a part of Afrox's capital revitalisation and growth plan which in total led to capital expenditure of R209-million for the first six months of this year.

"The R350-million ASU in the Eastern Cape is expected to commence production by the second quarter of 2015, which will mark a significant improvement in security of supply to customers in this important region. Afrox also commissioned a new R14-million hydrogen facility in Pelindaba," Afrox said.

Afrox's biggest customer segment is the automotive and component manufacturers in the region. It also serves the private and public healthcare sector, the hospitality market and aquacultural and agricultural sectors. – Cindy Preller. Additional reporting by BDlive