Sasol Names First Black Chairman, Earnings Surge

By Carli Lourens and Antony Sguazzin

Sept. 8 (Bloomberg) -- Sasol Ltd., used by the South African government to shield the country from sanctions during the apartheid era, named Hixonia Nyasulu to replace its chairman and become its first woman and black in the role.

Nyasulu, 54, will replace Pieter Cox on Nov. 28, the Johannesburg-based company said today. Founded in 1950 and state-owned until 1979, Sasol operates the world's biggest coal- to-motor-fuel plants and has the largest market value of any company based in South Africa. The company today posted a 47 percent gain in second-half profit.

South Africa is pushing companies from gold miners to life insurers to boost black participation in the biggest economy in Africa and curb inequalities created during the apartheid system of racial discrimination that ended in 1994. The government had clashed with Sasol in recent years, saying it hadn't promoted enough black executives into senior management.

``It's symbolically important,'' Nic Borain, a Cape Town- based political consultant for HSBC Holdings Plc, said in an interview. ``Sasol was a key asset in the apartheid state.''

Former DaimlerChrysler AG Chief Executive Officer Juergen Schrempp was appointed as ``lead independent director'' to chair the board on matters including oil, Sasol said in a statement to the city's stock exchange news service today. The appointment was to avoid any conflict of interest because Hixonia owns ``a small interest'' in Sasol Oil, CEO Pat Davies said.

Mindset Outgrown?

Following discussions with state pension fund, the Public Investment Corp., Sasol appointed Imogen Mkhize as the first black woman on its board in 2004, four days after rejecting her candidacy. The government criticized the company the next year for not appointing a black CEO when Cox retired from that job. Of Sasol's 14 board members, five are now black South Africans.

The company needed to ``outgrow an outdated mindset,'' South African President Thabo Mbeki said in 2003 after Sasol stated in a regulatory filing to the U.S. Securities and Exchange Commission that laws to boost black participation in the economy were a threat to shareholder value.

``We've been on a journey to transform this company in South Africa,'' Davies said in an interview from Johannesburg today. ``This is a further step in that process.''

Oil companies have agreed to sell 25 percent of their assets in South Africa to black investors with Sasol currently in the midst of a program to offer 10 percent of its shares for 27 billion rand, the biggest transaction of its kind.

Unilever, Anglo

The government is also demanding an increased percentage of black managers and wants companies to do more to train junior black staff. During apartheid, black South Africans were denied the same education and economic opportunities given to whites.

Nyasulu worked for Unilever Plc before setting up her own marketing company, Sasol said. She has served on the boards of companies including Nedbank Group Ltd. and Anglo Platinum Ltd.

Sasol posted a 47 percent gain in net income to 13.3 billion rand for the six months to June 30. The profit was calculated by subtracting first-half earnings from full-year figures released today.

The company rose 10.60 rand, or 2.8 percent, to 383.60 rand as of 11:53 a.m. in Johannesburg trading, giving it a market value of 256 billion rand. The shares have gained 13 percent in 2008, compared with an 8.3 percent drop in the FTSE/JSE Africa All Share Index of the 40 biggest Johannesburg-traded companies.

Sasol benefited in the period from crude oil prices that rose 52 percent from a year earlier to average $96.89 a barrel and said prices and production would gain this fiscal year.

Expansion Plans

Fixed prices for about 30 percent of so-called synthetic fuel output curbed income by 2.3 billion rand, it said. Coal production was 42.8 million tons, Davies said.

Full-year net income increased 32 percent to 22.42 billion rand, or 36.78 rand a share, in the year to June 30, from 17.03 billion rand, or 27.02 rand, a year earlier, the company said. Profit before one-time items was 38.09 rand a share, lagging the 38.50 rand median estimate of 13 analysts.

Sasol will spend 70 billion rand on expansion over the next three financial years, Finance Director Christine Ramon said.

``Oil may go below the $100s and into the $90s but Sasol makes lots of money even at that level,'' Wayne McCurrie, who helps manage the equivalent of $23 billion at RMB Asset Management in Johannesburg, said by phone. ``The oil price is not going to collapse to $50 or $60. Demand is still there.''

To contact the reporter on this story: Carli Lourens in Johannesburg at clourens@bloomberg.netAntony Sguazzin in Johannesburg at asguazzin@bloomberg.net