Petrochemicals giant Sasol said on Friday its plan to exit its Iranian operation was progressing well, albeit slower than initially anticipated.
The South African giant, Sasol took the decision to dispose Arya Sasol Polymers Company (ASPC) after the operation became too hot a political potato to handle.
Sasol ventured into the ASPC in 2003 through a joint venture with Iran’s national petrochemical producer. ASPC produces polymer, largely known as a derivative for a range of plastic products.
Things came to head after Iran’s cold war with the US escalated. The US has accused Iran of trying to build a nuke. Iran has insisted it is enriching uranium for industrial purposes. The US and its allies have prevailed in convincing the United Nations that Iran must be punished through sanctions over the matter. The sanctions have been ratcheted up over some years and have begun to bite foreign businesses in Iran. Companies who remain in Iran face sanctions from the largest economy in the world.
As such Sasol was caught in a cross fire and took the decision to dispose its operation. Another prominent South African company caught in these politics is mobile telecoms giant MTN.
In Sasol’s nine months trading statement, chief financial officer Christine Ramon said the group has made good progress, albeit slower than initially anticipated, on the disposal of its Iranian operation.
“We concluded a memorandum of understanding with an interested party regarding the disposal of ASPC and at the date of this update, we are finalising closing activities”.
On the general performance of the company, Ramon said Sasol was confident of delivering “solid operational performance and earnings” for the 2013 financial year to June.
Sasol also stands to benefit from a weaker rand. Average exchange rate in the nine months to March stood at R8.64 against the dollar against R7.67 in the previous comparable period which represents a 13% different.