Sasol slapped with another huge fine
Johannesburg - Petrochemicals giant Sasol [JSE:SOL] has been slapped with a R111m fine for anticompetitive behaviour in its polymers unit.
The Competition Commission on Tuesday said it had reached a settlement with Sasol Polymers, a division of Sasol Chemical Industries in which Sasol admitted that the supply agreement between it and another firm, Safripol, resulted in indirect price fixing.
In its investigation, the commission found that Sasol and Safripol engaged in collusive conduct as a result of the implementation of the supply agreement.
This included adopting a pricing formula and the exchange of information relating to the pricing of polypropylene.
Sasol Polymers has agreed to pay a penalty of R111 690 000, which represents 3% of its 2009 total annual turnover derived from polypropylene products.
Sasol will pay more than R250m in fines after the Competition Tribunal previously confirmed a settlement order in which it admitted to cartel conduct in the fertiliser industry.
It was also fined R3.7bn by the European Commission for participating in a paraffin wax cartel in October 2008.
The commission referred a case of collusion and excessive pricing against Sasol Chemical Industries and Safripol to the tribunal for adjudication on August 12 2010.
This agreement resolves the collusion aspect of the case.
Sasol has also agreed to stop sharing market-sensitive information, including prices and volumes of polypropylene sold.
It will also amend certain provisions of the supply agreement to ensure that prices are set independently.
The agreement is still to be ratified by the Competition Tribunal.
Safripol has already made a deal with the commission, in which it admitted to contravention of the Competition Act and agreed to pay a penalty of R16.5m representing 1.5% of its total annual (2009) turnover from polypropylene products.
The tribunal has confirmed this agreement.
The commission said it found that Sasol had charged its local customers excessive prices for polypropylene and propylene, which had been in line with import parity pricing.
It said that the findings on excessive pricing have been contested by Sasol and are still to be heard by the tribunal.
The investigation was started after the department of trade and industry raised concerns about polymer pricing and its negative effect on SA's manufacturing sector.
Sasol is the dominant supplier of polypropylene for its own use and that of Safripol, the commission said.
It is also the major supplier of polypropylene to the South African market. Polypropylene is a plastics polymer used by plastics converters to manufacture a wide range of products.