S Africa petchems production uninterrupted but sellers isolated by violence

LONDON (ICIS)–Sources at the two major South African petrochemicals producers Safripol and Sasol have said their production is currently unaffected by the widespread violence precipitated by the arrest of former President Jacob Zuma.

However, they are unable to deliver to many customers, due to blockading of roads and targeting of trucks.

“All supply chains are impacted with little to no trucking availability and hence we are already seeing fuel, food and medication shortages prevalent in the Durban area,” a source said.

Even if they can deliver, many of their customers have simply boarded up their businesses, for fear of damage to property or violence inflicted upon staff.

“The short and long term impact on business and re-investment is staggering,” a source said.

The violence has largely focused on retail outlets, with many being targeted by looters.

Trucks are also being targeted, meaning that moving material, which is largely done by truck in South Africa, is a calculated risk that most sellers and buyers are not willing to take.

“All our plants are running. But if customers are closed, customers are closed” said one source.

Ports have been closed, meaning that both imports and exports are impossible for the time being.

“We had material in the port that’s now not going out, everything is frozen where it was,” a source said.

The associated depreciation in the value of the South African rand may mean an increase in prices in the coming months.

The deployment of the army is allowing authorities to regain control in some areas but normality is unlikely to return until next week at the earliest.

SA rand versus US dollar
11-15 July
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Front page picture: Volunteers clean up a shopping centre outside Soweto
Source: Jerome Delay/AP/Shutterstock