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Sol - Sasol Limited - Sasol Nitro, A Division Of Sasol Chemical Industries

Release Date: 05/07/2010 15:26:01      Code(s): SOL
SOL - Sasol Limited - Sasol Nitro, A Division Of Sasol Chemical Industries      
Limited, Settles With Competition Commission Regarding Allegations Of Abuse Of  
Dominance In Its Fertiliser Businesses                                          
Sasol Limited                                                                   
(Incorporated in the Republic of South Africa)                                  
(Registration number 1979/003231/06)                                            
ISIN: ZAE000006896        US8038663006                                          
Share codes: JSE - SOL    NYSE - SSL                                            
("Sasol")                                                                       
Sasol Nitro, a division of Sasol Chemical Industries Limited, settles with      
Competition Commission regarding allegations of abuse of dominance in its       
fertiliser businesses                                                           
Sasol Nitro, a division of Sasol Chemical Industries Limited, has concluded a   
settlement agreement with the Competition Commission of South Africa, relating  
to its fertiliser business. This agreement is scheduled to be considered by the 
Competition Tribunal on 14 July 2010.                                           
Sasol Nitro and the Commission have been engaged in settlement discussions,     
regarding alleged contraventions of the Competition Act, pertaining to excessive
pricing and exclusionary practices. The discussions have been focussed on       
addressing outstanding matters raised by Nutri-Flo and Profert, from the mid-   
2000s.                                                                          
The settlement will see Sasol Nitro restructuring its fertiliser business. Sasol
Nitro does not believe it engaged in excessive pricing and exclusionary         
practices. Sasol believes the restructuring will address the Commission`s       
concerns regarding Sasol`s position within the nitrogen based fertiliser value  
chain, while also opening the industry to more competition. Sasol Nitro will    
withdraw from certain downstream activities with increased focus on the core    
activities of its fertiliser business.                                          
Sasol Nitro approached the Commission with this structural solution and has     
undertaken several changes to its fertiliser business model:                    
1.  Divesting its regional blending capacity in Bellville, Durban,              
Kimberley, Potchefstroom and Endicott whilst retaining its full              
   production activities in Secunda.                                            
2.  Altering Sasol Nitro`s fertiliser sales approach to a Secunda ex-works      
   model. All fertiliser retail agent contracts will be phased out and a        
new fertiliser sales operating model formulated.                             
3.  Pricing all ammonium nitrate based fertilisers on an ex-Secunda basis.      
4.  Phasing out ammonia imports on behalf of customers in South Africa.         
Approximately 50 permanent Sasol Nitro employees will be affected by the        
restructuring as well as approximately 90 commission-based agents. Over the     
implementation period, Sasol Nitro will work with the affected parties to, as   
far as possible, limit the impact of the changes on the staff. Sasol ChemCity,  
Sasol`s business incubator, will facilitate interested parties in the           
development of business opportunities that may arise from the restructuring.    
"Not only will this settlement see us restructure our fertiliser business within
Sasol, we believe it will open the downstream fertiliser industry to more       
players, encouraging competition and potentially create new distribution        
business opportunities, as this sector redesigns itself.  We also believe that  
these changes will create several new opportunities for Sasol Nitro to improve  
our offering to the end customer, our farmers", said Marius Brand, managing     
director of Sasol Nitro.                                                        
"We remain committed to the agriculture industry and the competitiveness of     
inputs to that industry. We have already started with detailed planning to      
ensure these changes are implemented as smoothly as possible", he said.         
The agreement will be a full and final settlement of the alleged contraventions 
of excessive pricing and exclusionary practices, which are the subject of the   
Nutri-Flo and Profert referrals, but requires confirmation by the Tribunal. As  
the Commission is of the view that the settlement will address their competition
concerns, the Commission has not sought an administrative penalty.              
The proposed settlement together with the changes to the Sasol Nitro business   
will not have a material adverse impact on the Sasol Group.                     
5 July 2010                                                                     
Johannesburg                                                                    
Issued by sponsor: Deutsche Securities (SA) (Proprietary) Limited               
Disclaimer - Forward-looking statements:                                        
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otherwise.                                                                      
Date: 05/07/2010 15:26:01 Supplied by www.sharenet.co.za                     
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