Safripol approves more than R100 million to upgrade Sasolburg plant
SAFRIPOL, which operates HD and PP manufacturing plants in Sasolburg and a PET plant in Durban, has for long been one of South Africa’s most reliable material suppliers, but the second half of 2020 saw a number of supply interruptions. We asked chief operating officer at Safripol, Nico van Niekerk, what happened?
SAPT: Nico, you and your team have had a good record over an extended period and the Sasolburg plant has appeared to have had very few problems, but there were three separate incidents in 2020: what went wrong?
NvN: Yes, the Sasolburg operation traditionally is very reliable and we are very proud of our track record. Unfortunately we experienced operational outages in November and December last year. In November we experienced a water supply interruption that shut down the total site for a few days. This interruption also affected other companies that are supplied from the same municipal water ring main system. Ultimately Safripol, together with other affected companies, assisted the local municipality to repair the affected line. On 30 December we experienced an electrical outage. An Eskom pylon toppled over causing a complete shutdown of the Sasolburg-based chemical complex. As you can imagine, once the electricity supply was reinstated, the whole complex had to be safely restarted and utilities restored before we could start-up the polymer plants.
Both these interruptions, which were outside of Safripol’s control, caused significant downtime and unplanned volume loss.
SAPT: The interruptions have clearly affected your HD and PP customers. Is it possible for the impact of such incidents to be mitigated?
NvN: Our Sasolburg facilities are, for all intents and purposes, sold out and there is no way that we can make up the production volumes lost. The only alternative is to reduce sales. Normally during the second half of December and early January, sales in SA slow down, but this year it did not happen so when the plants were back online we were not able to replenish our finished goods inventories.
To mitigate against interruptions, Safripol normally has about a month’s inventory of finished goods. We have revisited our finished goods inventory methodology and we have adjusted our standards – although this will not make up for the loss of sales but rather the timing thereof. The reliability of infrastructure, in this case water and electricity, is not improving and Safripol has put action plans in place to reduce dependency on these and also to carry spares to effect repairs ourselves more efficiently when needed.
SAPT: At least some convertors have been put on allocation for material supply. What is the outlook for the remainder of the year for your iMPACT 100® and Safrene® HD grades and the Advance® and Safron® PP grades? Are some of the grades affected less than others?
NvN: With the advent of Covid-19, Safripol, like many other industrial companies, pushed out mandatory statutory shutdowns. We will therefore have to shut down both the HDPE and PP plants in Sasolburg this May. We are managing supply of raw materials to converters as best we can given our own production interruptions, as well as the global supply chain challenges. Unfortunately, all Safripol grades will be in short supply until June/July this year. The good news is that during the shutdown Safripol will effect some plant changes that will increase the production capacity of some critical grades aligned with our ‘let’s plastic responsibly’ initiative.
SAPT: Was the Safripol Durban PET plant affected at all?
NvN: Yes and no. We experienced an electricity interruption on 30 December in Durban but supply was reinstated and no market related interruption was experienced as a result of the electricity interruption.
That said, all the raw materials for our Durban PET plant are imported from the East. With the global supply interruptions that are experienced in many parts of the world, two of our major raw material suppliers declared force majeure on us, and with the global shipping line challenges specifically from the East that were experienced from February, we had to shut down our Durban plant based on short supply of raw materials. The plant is back up and running now and with the support of our customers, the effect on the market was minimised.
SAPT: It appears that most people in the industry (and citizens in general) are not aware of the complexity involved in running petrochemical and polymer plants smoothly: could you explain simply why these plants tend to play up from time to time?
NvN: The mechanical and operational reliability of our facilities are favourably benchmarked against some of the very best in the world. We maintain and upgrade the facilities in a responsible manner. As noted earlier, the market supply interruptions were not caused by Safripol’s own doing. These plants are, however, complex and unforgiving – when you experience utility interruptions you have to shut them down in an uncontrolled manner which results in a tedious plant start-up process.
Ideally, reliable infrastructure should be a given. That is not necessarily the case at the moment and, as reliable producers, one needs to solve infrastructure related issues too.
SAPT: There has been some criticism that the Sasolburg plant is old and that this is the source of the problem. From my perspective, it appears that the plant has been well managed throughout its life, that you have an effective technology partner in Lynondellbasell and have made on-going investment in maintenance and upkeep, but what would your reaction to the critics be in this respect?
NvN: None of the said interruptions were due to a plant failure. We started to produce HDPE in Sasolburg in the early ‘70s; however, there is no trace of that plant left. We are benchmarking the Sasolburg operations versus the best out there and the results clearly indicate that we can compete with them. We have just approved more than R100 million to upgrade some of the equipment on the plant. We are confident that the plant reliability and the quality of the materials produced meet the requirements of the SA market and can compete with the best out there.
