Sasol is one of two great SA companies founded on proprietary technology or intellectual property. In Sasol’s case it was the adoption of the liquid-fuel-from-coal process. The other company, Discovery, was founded on the simple yet profound insight that it would be better to reward people for being well rather than being sick.

Both companies expanded to the US and ran into difficulties. In the mid-2000s, Discovery’s Destiny never really worked and, having placed a time limit on the project, it withdrew to consider the lessons learnt. It remains determined to grow globally and there is much potential in Europe and China.

Sasol has to be as agile in handling its huge Louisiana investment. This was conceived when it seemed that gas-to-liquid from fracking was a great idea. The assumption was that the global economy would begin to recover from around 2013 and that the oil price would not only remain above US$100/bbl but would keep rising on growing demand.

Instead growth proved elusive and oil crashed to around $30/bbl (it has spent most of the time since then under $50). Sasol CEO David Constable said the board’s worst-case scenario, when planning capital expenditure for Louisiana, was an oil price of $60/barrel. Anything less had, clearly, been unthinkable.

Even the best companies miscalculate, and Sasol has put much of its expansion on hold while focusing on cost-cutting. Investors have been cautious about buying into what remains an excellent company that nevertheless cannot control two key factors: the oil price and the exchange rate. Sasol’s move into chemicals has been extensive but not enough to compensate for uncertainties about oil.

Sasol is something of a metaphor for SA. However well we perform, our fortunes are tied to what happens in the global economy, in which we are a minor player — and a long way from most markets. If we are not at the top of our game (which, sadly, is our current condition) that makes us all the more vulnerable.

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