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Manufacture of Basic Chemicals, Other Chemicals and Industrial Gases
In 2017 the chemicals sector contributed just under 3% of GDP and accounted for 21.4% of total manufacturing GDP in the country. Sales in 2018 were estimated at R220bn. The sector receives government support as it creates jobs and supports exports. There has been little increase in production since the early 2000s. Key events for the sector will be decisions on whether shale gas exploration is permitted, and whether the discovery of a potential 1 billion barrels of gas off South Africa’s coast could potentially provide an abundant and low cost inputs into the chemical industry.
The most significant recent gas reserve discoveries include shale gas in the Karoo and the recent announcement by Total that it found a potential 1 billion barrels of ‘wet gas’ (gas that contains a small amount of oil) in Brulpadda off South Africa’s south coast, which could be a game changer for the industry. These discoveries could decrease the costs of raw materials used in production of chemicals and reduce energy costs. The Brulpadda discovery is particularly important, with options to either integrate the gas from the field to chemical companies already based in Mossel Bay, or to supply cheaper sources of fuel for energy or a combination. Environmental impact assessments and feasibilities still need to be completed.
This report focuses on the manufacture of basic chemicals, speciality chemicals and industrial gases. It includes information on the size and state of the industry, and the factors that influence its success. There are profiles of 22 companies including major players such as Sasol, Shell Downstream, AECI and Omnia as well as specialist producers such as Foskor and Evonik Peroxide.