Company news in brief

Gazprom to revive SA refinery

State-owned oil company PetroSA has selected Russian state-owned financier Gazprombank as its preferred investor partner to resuscitate its gas-to-liquid fuel refinery in Mossel Bay.

The decision is despite the threat of secondary sanctions from the US, which frequently punishes countries and companies outside US jurisdiction for doing business with entities under US primary sanctions.

Minister in the Presidency Khumbudzo Ntshavheni announced on Monday that the Cabinet had endorsed the decision and aimed to finalise the transaction by April 2024, pending due diligence and the development of the business case.

PetroSA's closed its gas-to-liquid fuel refinery in 2020 after it ran out of feedstock. PetroSA and the Central Energy Fund (CEF), its parent company, hope that they will be able to use new gas discoveries off the coast of SA. The plant converts both gas and condensate to vehicle fuel.

CEF has pinned hopes for PetroSA's turnaround to reviving the refinery.

CEF chairperson Ayanda Noah said last month that it would cost around R2 billion and take about two years to return the refinery to operation. PetroSA is stressed financially, with several years of losses and an unfunded liability of R9.6 billion on its rehabilitation facility. – Fin24



Watchdog recalls 'high-risk' SA cement

South African company Econo Cement has been accused of having a 'substandard' product by the National Regulator for Compulsory Specifications (NRCS).

The regulator has asked consumers and hardware stores to participate in a nationwide recall of Econo Cement's "CEM V/A S-V 32.5 N" product after investigations found it failed to meet the minimum requirements of prescribed strength.

CEO of the NRCS, Duncan Mutengwe, said the move was in the public interest to ensure the product does not pose a risk to South Africans and the economy at large.

Mutengwe explained: “The product failed dismally in terms of what they are selling it to be. It was supposed to be 32.5 N [the most commonly used cement with ordinary early strength], but our tests found the results much lower. Consumers need to know because it does have critical safety risk features attached to it.”

He said the NRCS had ordered the company to stop manufacturing the product, and the body will also confiscate all the stocks currently on shelves. – Fin24



Italtile flags revenue fall

South Africa's largest tile retailer, Italtile, has reported revenue pressure across its top brands after opportunistic importers flooded the market and financially strained homeowners held back on renovations.

The owner of brands such as CTM, TopT and Italtile Retail warned on Monday that the challenging marketing conditions were here to stay until at least the end of its financial year ended July 2024, indicating it could affect its overall profitability.

The group reported on Monday its retail turnover declined by 2.9% during the five months to end-November, while the combined manufacturing sales reported by Ceramic Industries and Ezee Tile Adhesive Manufacturers decreased by 5.9%.

Its manufacturing business was under particular pressure amid the softer retail demand for tiles, but also the overstocked position of many wholesalers.

Italtile said in a sales update that consumer confidence in the construction and building sector remained subdued, with sentiment and spend constrained by the poor economic conditions, higher costs of living, and elevated interest rates. – Fin24