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Sasol denies 'excessive' chemical prices
Sasol Chemical Industries' (SCI) returns from its propylene and polypropylene sales were not the result of excessive pricing but a result of the fair economic valuation of its investments in its business‚ the company's expert witness Andrew Harman told the Competition Tribunal on Thursday (6 June).
Hearings on SCI's pricing of its feedstock for the domestic market continued into a fourth week at the Tribunal‚ in a matter that dates back to 2007. The hearing follows an investigation by the Competition Commission at the behest of the Department of Trade and Industry.
SCI holds a "special advantage" over Safripol‚ the only other supplier of polypropylene, which is widely used to manufacture plastic products.
Speaking under cross examination by the commission's leading counsel Arnold Subel‚ Harman said that his assessment indicated that the cost of feedstock that SCI sourced from Sasol Synfuel was accurately stated and that the transfer pricing between the two companies did not indicate excessive pricing.
Subel asked if the return on investments of 161.6% that SCI has generated from its business was "unusual".
"I wouldn't be surprised by that return because in this instance‚ you have a company that has a tiny asset base‚ because of the capital that it has employed‚" Harman replied.
Source: I-Net Bridge
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