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Johannesburg - Sasol Nitro escaped an administrative fine for alleged abuse of its dominant position in the fertiliser market after it agreed to make behavioural changes and sell five of its fertiliser plants, excluding the one at Secunda.
The Competition Tribunal still has to ratify this settlement agreement.
The plants in question are in Bellville, Durban, Kimberley, Potchefstroom and Endicott.
Sasol [JSE:SOL] previously reached a settlement with the Competition Commission for participation in an industry cartel, in terms of which it paid an administrative fine of R250m.
In a statement Sasol said that 50 permanent employees at Sasol Nitro would be affected by the sale of the plants.
According to Bloomberg, this step would knock Sasol’s revenue by between R250m and R300m.
Sasol Nitro has undertaken to convert all its sales contracts with retailers into a new model.
The decision will affect 90 agents on commission.
This is the first time the Competition Commission has accepted structural and behavioural changes as a settlement, in a case involving abuse of a dominant market position.
Sasol has agreed is to keep its ammonium nitrate plants in a separate business unit in future. Sasol is the country's only manufacturer of ammonium nitrate.
Sasol also agreed to halt all imports of ammonia within 25 months of the agreement being ratified, other than that required for domestic use.
The other parties in the fertiliser cartel case, Kynock (Yara) and Omnia, are still being heard by the tribunal.
Economic Development Minister Ebrahim Patel told Sapa that he welcomed the settlement.
The cartel came to light following complaints from Nutri-Flo that Sasol and its competitors, Omnia and Yara, had colluded to split the market between themselves, that they had fixed the prices for limestone ammonium nitrate and that they were charging exorbitant prices for fertiliser products.
Last year Sasol CEO Pat Davies said he had been shocked and disappointed by what had happened at Sasol.
Dave Lewis, the then tribunal chairperson, encouraged victims of cartel behaviour to submit civil claims for damages.
Grain SA said it had received little interest in a class action. At this stage, “informal talks” were being held with Sasol.
The discussions involved what Sasol could plough back into agriculture because of its share in the cartel. It would appear that little progress has so far been made.
- Sake24.com
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