South Africa Petrochemicals Q1 2019
The South African petrochemicals industry saw production drop off as a result of production problems at Sasol's facilitiesin Secunda, as well as the effects of power outages. While these problems are temporary and likely to be resolved as 2018progresses, there are underlying structural weaknesses and political risks that cast doubt on the viability of the sector in the longterm. Demand performance has been underwhelming, the country lacks a significant upstream resource relative to competitors inemerging markets and slow investment growth will undermine the competitiveness of the country's manufacturing chain. While weanticipate a recovery in the second half, it will be tenuous and faced with considerable negative risk. Sporadic industrial actions, therecent more 'investor-unfriendly' policy proposals and high operating costs will temper firms' enthusiasm for operating in thecountry in the coming quarters.
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