to Sasol Synfuels’ selective catalytic cracker (SCC). However, in the second half of the year we experienced encouraging improvements in the stability and volumes of the SCC. 

## Reducing costs, restructuring the business 

Sasol Polymers’ turnover decreased 8% to R14 321 million in 2010, and operating profit was largely flat at R958 million compared with R946 million a year earlier. 

The results were negatively affected by foreign currency translation differences – in particular changes in the rand and the euro relative to the US dollar. 

Our drive to contain costs ensured that we reduced our fixed costs, despite higher utility prices. 

Continued pressure in the market for polymers necessitated the launch, early in the financial year, of a turnaround plan to ensure a sustainable business. With a focus on improving productivity and cutting costs, Sasol Polymers reorganised its South African structure into two businesses: chlorvinyls and polyolefi ns. We closed down our small peroxide business because of poor profi tability. 

Sasol Polymers is currently executing the various phases of a restructuring plan that focuses primarily on the recovery of production and sales volumes. We expect to reduce the total staff complement as 

The full commissioning in the year of the group’s fi rst totally enclosed ground flare, at the monomers ethylene plant at Sasolburg, marked a milestone in efforts to reduce our environmental footprint. 

part of this optimisation programme. 

We are engaging the workforce, inclusive of labour unions, in this transition process and will primarily make use of voluntary retrenchment incentives and natural attrition to reduce headcount. 

This leaner, more competitive organisation provides a stronger platform for performance in the years ahead. 

However, reductions in duties on polymer imports to South Africa, coupled with steep hikes in the price of domestic utilities, make the business environment extremely challenging. Since the start of the 2010 financial year, South Africa has cut ad valorem  duties on polymers from 10% to 2,5%, with further reductions projected to take duties down to zero by 2012. 

Despite these challenges, Sasol Polymers offers two key competitive advantages: customers have access to our extensive technical capability and benefit from the reliability and easy access to high-quality local supply. At our Polymers Technical Support Centre in Modderfontein, South Africa, we carry out scientific testing and verification of customers’ products. We advise our customers on the applicability and grade choices of the polymers best suited for their business needs. The product support provided assures our customers that they have the most 

appropriate application of our grade variety on offer. Through our sponsorship of a chair at the Polymer Science Institute at the University of Stellenbosch, South Africa, we also facilitate continued scientific development in this fi eld. 

## Growing our assets 

In line with the group’s strategy to nurture and grow Sasol’s existing asset base, and driven by good local demand for polyethylene material, we recently obtained board approval to invest R1,9 billion in building a new ethane/ ethylene separation unit at Sasolburg. 

Known as EPU5, the plant will provide additional ethylene capacity of some 48 000 tons in the period beyond the planned late-2013 start-up. This will ensure improved fl ow-scheme fl exibility and better utilisation of the existing downstream polyethylene plants. Half of the feedstock to the unit will be from cracked propane and ethane extracted from natural gas, with the remainder being a combination of additional volumes from our Project Turbo investments and other monomers sourced from Sasol Synfuels. This project illustrates our renewed focus on unlocking the full potential of the chemical assets in the Sasol group. 

