South Africa’s Sasol delays results due to US project glitch

Updated 16 August 2019

South Africa’s Sasol delays results due to US project glitch

  • “Management and the board will assess such control weaknesses and identify whether any further remedial actions are required,” the company said
  • In May, Sasol had increased the expected cost of the US project by around $1 billion

JOHANNESBURG: Sasol Ltd. delayed the release of its annual financial results on Friday due to possible “control weaknesses” at its US ethane cracker project, sending shares in the chemicals and energy company down by more than 15%.
Sasol said its auditors would need to consider an independent report the board had commissioned into its Lake Charles Chemicals Project (LCCP) and therefore expected to announce fiscal 2019 results on Sept. 19 instead of Aug. 19.
“Management and the board will assess such control weaknesses and identify whether any further remedial actions are required,” the company said, without providing further details.
In May, Sasol had increased the expected cost of the US project by around $1 billion following a review by new management that revealed oversights such as duplicate credits and overlooked contracts, adjustments for potential insurance claims, procurement back-charges and remaining work and repairs.
Sasol spokesman Alex Anderson said the group’s financial controls were sound and it had no concerns about its financial reporting.
“This is a situation where a relatively small team, the LCCP project management team, although working very hard, did not have adequate segregation of duties and failed to engage the wider financial organization to verify the accuracy of their forecast,” Anderson said referring to the cost forecast for the project.
The company said it had implemented initiatives to improve decision making, transparency and documentation within the project management team.
It has also segregated duties between project controls and finance functions and assigned a senior vice president who is responsible for the project’s controls.
The company said it still expected cost guidance for LCCP to between $12.6 billion and $12.9 billion but that it now expected full production at the project to be delayed to around Aug. 26 from the previous guidance of the end of July after a technical challenge relating to a large heat exchanger.
The project in Louisiana, which will convert natural gas into plastics ingredient ethylene, was initially expected to cost $8.9 billion in 2014 and has seen delays and cost increases.
Sasol, which is delaying its results for the first time, said it expected guidance given in July — for a rise in annual core headline earnings per share of between 1% and 11% — to remain the same.
Headline earnings is the main profit measure used in South Africa that strips out certain one-off items.
Shares in Sasol, the world’s biggest maker of motor fuel from coal, were down 4.23% to 266.38 rand at 1444 GMT, after trading as low as 233.93 rand, their lowest since November 2008.


A Jordan startup delivers eco-friendly alternative to dry cleaning

Updated 05 December 2019

A Jordan startup delivers eco-friendly alternative to dry cleaning

  • Products used by WashyWash are non-carcinogenic and environmentally neutral
  • Amman-based laundry service aims to relocate to a larger facility in mid-2020

AMMAN: A persistent sinus problem prompted a Jordanian entrepreneur to launch an eco-friendly dry-cleaning service that could help end the widespread use of a dangerous chemical.

“Dry cleaning” is somewhat of a misnomer because it is not really dry. It is true that no water is involved in the process, but the main cleaning agent is perchloroethylene (PERC), a chemical that experts consider likely to cause cancer, as well as brain and nervous system damage.

Kamel Almani, 33, knew little of these dangers when he began suffering from sinus irritation while working as regional sales director at Eon Aligner, a medical equipment startup he co-founded.

The problem would disappear when he went on vacation, so he assumed it was stress related.

However, when Mazen Darwish, a chemical engineer, revealed he wanted to start an eco-laundry and warned about toxic chemicals used in conventional dry cleaning, Almani had an epiphany.

“He began to tell me how PERC affects the respiratory system, and I suddenly realized that it was the suits I wore for work — and which I would get dry cleaned — that were the cause of my sinus problems,” said Almani, co-founder of Amman-based WashyWash.

“That was the eureka moment. We immediately wanted to launch the business.”

WashyWash began operations in early 2018 with five staff, including the three co-founders: Almani, Darwish and Kayed Qunibi. The business now has 19 employees and became cash flow-positive in July this year.

“We’re very happy to achieve that in under two years,” Almani said.

The service uses EcoClean products that are certified as toxin-free, are biodegradable and cause no air, water or soil pollution.

Customers place orders through an app built in-house by the company’s technology team.

WashyWash collects customers’ dirty clothes, and cleans, irons and returns them. Services range from the standard wash-and-fold to specialized dry cleaning for garments and cleaning of carpets, curtains, duvets and leather goods.

“For wet cleaning, we use environmentally friendly detergents that are biodegradable, so the wastewater doesn’t contain any toxic chemicals,” Almani said.

For dry cleaning, WashyWash uses a modified hydrocarbon manufactured by Germany’s Seitz, whose product is non-carcinogenic and environmentally neutral.

A specialized company collects the waste and disposes of it safely.

The company has big ambitions, planning to expand its domestic operations and go international. Its Amman site can process about 1,000 items daily, but WashyWash will relocate to larger premises in mid-2020, which should treble its capacity.

“We’ve built a front-end app, a back-end system and a driver app along with a full facility management system. We plan to franchise that and have received interest from many countries,” Almani said.

“People visiting Amman used our service, loved it, and wanted an opportunity to launch in their countries.”

WashyWash has received financial backing from angel investors and is targeting major European cities initially.

“An eco-friendly, on-demand dry-cleaning app isn’t available worldwide, so good markets might be London, Paris or Frankfurt,” Almani said.

 

• The Middle East Exchange is one of the Mohammed bin Rashid Al-Maktoum Global Initiatives that was launched to reflect the vision of the UAE prime minister and ruler of Dubai in the field of humanitarian
and global development, to explore the possibility of changing the status of the Arab region. The initiative offers the press a series of articles on issues affecting Arab societies.