Sasol cushions impact of US tariffs with diversification
SASOL, South Africa’s integrated energy and chemicals producer, is moving swiftly to blunt the impact of new U.S. tariffs on its chemical exports, which could cost the company around $80 million annually. The measures come at a time when Sasol is regaining its financial footing, giving it room to respond with a mix of cost recovery, market diversification, and supply chain agility.
For the year ended 30 June, Sasol reported a return to profit with earnings of R10.60 per share, compared with a steep loss of R69.94 the previous year. The rebound was driven by higher chemical prices, disciplined cost management, and reduced impairments. This healthier balance sheet allows the company to absorb short-term shocks while it recalibrates its trade strategy.
CFO Walt Bruns said Sasol has already offset $20 million to $30 million of its tariff exposure. Part of this has been achieved by passing some of the higher costs on to U.S. customers, who have shown a willingness to accept increases. Another lever has been the redirection of export volumes to Asia, where demand for Sasol’s chemical products remains robust.
CEO Simon Baloyi noted that the tariffs are not viewed as a major threat, given Sasol’s substantial U.S. production base, which supplies a large share of its sales domestically. This reduces reliance on tariff-affected exports from South Africa.
Sasol is also assessing longer-term solutions, including identifying export categories that could qualify for tariff exemptions or refunds. Market diversification beyond the U.S. is another priority, particularly in Asia and Europe, though cost competitiveness and pricing dynamics will be carefully weighed.
South Africa’s export profile adds resilience to Sasol’s position. Only about 8% of the country’s exports go to the United States, compared to roughly 20% each to the European Union and China. This gives exporters like Sasol multiple levers to shift volumes and minimize dependence on any single market.
Sasol’s measured response highlights how large exporters can navigate geopolitical trade shocks. By leveraging financial stability, sharing costs with customers, and redirecting supply, the company is treating tariffs as a manageable disruption rather than a crisis. For business leaders, the case underlines the value of flexibility, diversification, and proactive engagement in sustaining growth amid global uncertainty.
