Zambian economy to grow 7.1% in 2010

Zambia's economy is likely to grow by 7.1% in 2010, marginally up on earlier forecasts, due to increased mining activity, the Central Statistics Office (CSO) said Thursday.

"The preliminary estimates of Gross Domestic Product (GDP) show that the economy is likely to grow by 7.1% in 2010 compared to the 6.4% recorded in 2009," said CSO director John Kalumbi.

"This growth is largely driven by increased output in mining, quarrying, transport, agriculture and forestry," he added.

Zambia's finance and national planning minister Situmbeko Musokotwane said earlier this year that the economy would grow by 6.6% in 2010, and 6.4% in 2011.

Zambia is Africa's largest producer of copper and mining is the country's main economic driver.

Source

African airline growth takes off

African carriers were the only ones to show an increase in air travel growth rates from October (12.6%) to November (16.4%), the International Air Transport Association (Iata) said on Thursday.

The region's carriers moved 11% more travellers in November than they did at the pre-recession peak in early 2008.

However, international air traffic slowed in a sign that the global economic recovery is losing speed.

Iata said harsh weather conditions in many countries in December were weighing on business.

"The year-end holiday season has been tough for travellers and for airlines," Iata director-general, Giovanni Bisignani said. "Airlines saw lost revenues and saw costs rise."

Bisignani repeated Iata's recent profit forecast for the industry, saying a strong end to 2010 overall should lift profits to $15.1bn. Slowing traffic growth was in line with projections for a reduced profit of $9.1bn in 2011.

"The industry is shifting gears in the recovery cycle," Bisignani said.

"Growth is slowing towards normal historical levels in the 5% to 6% range. Relative weakness in developed markets is being offset by the momentum of economic expansion in developing markets," he added.

The air traffic numbers are in line with other signs that the global recovery from economic crisis is losing speed. The International Monetary Fund expects 4.2% global growth next year, which would be a step down from 2010 but well above the recession-hit rates of the previous two years.

Air freight - an important indicator of trade and economic recovery - grew by 5.4% in November from a year ago, well below the 14.5% rise recorded in October.

Freight traffic, which accounts for 35% of the value of goods traded internationally, is now at the pre-crisis levels of early 2008, said Iata, which represents 230 airlines including Aeroflot, Air China, Lan Airlines and Lufthansa.

Passenger demand - a reflection of business and consumer confidence - was 8.2% higher in November than a year earlier, below October's 10% rise, and is now 4% above pre-crisis levels.

Air traffic growth slowed significantly in all regions with the exception of Africa, Iata said. Freight levels remained well below their pre-crisis levels in North America and Europe.

Source

The African Business Opportunity - McKinsey

Most international businesses are still not very aware of Africa’s investment opportunities. Information costs are high: Africa is fragmented into many different countries, and even in aggregate the continent is a fairly small economy. For several decades, investor ignorance did not matter: with few exceptions Africa’s economies were too badly run for there to be many opportunities for firms of integrity. But there has been a sea change—Africa is on the move. There will be ups and downs, but investors from the countries of the Organisation for Economic Co-operation and Development (OECD) who remain set in their ways may be missing a giant business opportunity if they fail to pay attention to the changes afoot.

The situation in Africa quietly began to change during the period 1995–2005. Profound macroeconomic reforms tamed inflation and opened economies to international trade. More patchily, the regulatory environment facing international business also improved. Public ratings, such as the World Bank’s Doing Business surveys, enabled African governments to benchmark their performance and began to put pressure on those that were recalcitrant. As the global commodity boom built to its 2008 crescendo, many African countries were well positioned to harness the spike in their export revenues for growth beyond the resource extraction sector itself.

That upturn in national growth rates was mirrored in the increased profitability of companies operating in Africa. Indeed, three distinct sources of data indicate that returns on investment are higher there than in other regions. One was a comprehensive study of the publicly traded companies operating in Africa for the period 2002–07, mostly in the manufacturing and services sectors. It found that these companies’ average return on capital was around two-thirds higher than that of comparable companies in China, India, Indonesia, and Vietnam. Another source, on the foreign direct investment of US companies, showed that they were getting a higher return on their African investments than on those in other regions. Finally, analysis of a series of surveys of several thousand manufacturing firms around the developing world found that, at the margin, capital investment had a higher return in Africa.

This was the scene in the years leading up to the global crisis. Although its origins had nothing to do with the continent, the crisis did not bypass Africa. Its effect was to collapse commodity prices—for example, the price of oil initially tumbled by more than $100 a barrel. More subtly, the international appetite for risk collapsed, and since Africa is still generally viewed as the riskiest region, investors got scared; for example, international banks curtailed letters of credit to African exporters far more drastically than to those in other regions.

These effects were severe. However, with a few exceptions—inevitable in a region with so many countries—Africa weathered the economic storms well. Led by its two largest economies, South Africa and Nigeria, most countries had built prudent fiscal positions: in a remarkable break with its past, Nigeria had freed itself from debt and built up over $70 billion of foreign-exchange reserves. Further, the adverse impact of the crisis through commodity prices lasted less than a year for Africa. Globally, commodity prices rapidly bounced back and seem to have stabilized around levels markedly higher than those in the decades before the boom, underwritten by growing Asian economies and their corresponding need for commodities.

Revenues from commodity exports have been augmented not just by high prices but also by the resource discoveries that high prices have triggered. Yet the recent discoveries are merely the beginning: the scale of what is likely to happen is not widely appreciated. As I show in The Plundered Planet, Africa is the last major region on Earth that remains largely unexplored. In the long-explored countries of the OECD, the average square kilometer of territory still has beneath it around $114,000 of known subsoil assets, despite two centuries of intense extraction. In contrast, the average square kilometer of sub-Saharan Africa has a mere $23,000 of known sub-soil assets. It is highly unlikely that this massive difference is due to a corresponding difference in what is actually there. Rather, the difference in known assets is likely to indicate an offsetting difference in what is awaiting discovery.

It is reasonable to suppose that what is actually under the soil in the average square kilometer of Africa is at least as valuable as what is known still to be available in the OECD. An implication is that once these untapped resources have been discovered, Africa’s commodity exports will be around five times their present level. In turn, this has three profound implications. One is that many of the countries in which resources are discovered will be those that currently are not significant resource exporters: the economic map of Africa will change quite drastically as new opportunities open. A second is that such a radically higher level of commodity exports across the region will support correspondingly larger economies. The final implication is that in the process of getting to this much higher level, Africa will have a prolonged phase of rapid growth.

Now for the reality check. During the commodity booms of the 1970s, Africa also had a wave of resource discoveries. With a few exceptions, most notably Botswana, these opportunities were not harnessed for transformative growth. Indeed, the more common experience was an ugly and costly political contest for control of the revenues. If history repeats itself, the forthcoming much larger wave of resource discoveries in Africa will leave a legacy of scarred landscapes and scarred lives.

Yet the contrast between Nigeria’s dysfunctional management of its first oil boom of 1973–83 and its brilliant management of the second boom of 2003–08 cautions against the gloomy cynicism that until recently bedeviled investor thinking about Africa. The road to economic transformation is undoubtedly likely to be a bumpy one, but many African societies have learned both from their own histories and from the prosperity of other once-poor countries. Unlike the externally dictated structural-adjustment programs of the 1980s, the key struggles over economic policy will be internal to African societies. They will not all be won, but nor will they all be lost: some societies will decisively adopt progrowth economic strategies.

To date, Africa has lacked the spectacular regional role models of economic success that so benefited Asia. But it is now starting to get them. Even in Rwanda, a landlocked, crowded country lacking in natural resources, a leadership committed to economic transformation has been able to sustain a growth rate of 10 percent. In some of the countries with more favorable fundamentals, even faster growth rates will be sustained. Such successes will have a profound influence on the neighbors, just as occurred in Asia.

As in Asia, I doubt that there will be a close correspondence between the struggles for democracy and the struggles for economic transformation. The struggles for democracy do indeed have an important economic dimension: many African rulers have accumulated excessive personal power and abused it to sacrifice the common good of national prosperity for narrow sectional self-interest. But more recently, some African leaders, such as President Museveni of Uganda, President Kagame of Rwanda, and Prime Minister Meles of Ethiopia, have built strong credentials for a commitment to the economic transformation of their societies while being somewhat hesitant democrats. Some of Africa’s coming economic successes will be in societies that have won the struggle for accountable democratic government. But others will be in societies in which autocratic leaders have become ambitious for national goals rather than merely for power and privilege; expect some African repetitions of Malaysia’s experience.

From African independence, beginning in the early 1960s, until around the turn of the millennium, the OECD prospered while Africa stagnated. A legacy of this divergent experience is that OECD investors are skeptical of Africa’s future. Their skepticism is not shared by the new entrants to international investment, who missed this sorry phase of African economic performance. It may be that Africans will use their history to learn from it, while OECD investors end up being trapped by it. Africa may be on the cusp of a reversal of fortunes. Indeed, Africa is now growing markedly more rapidly than the OECD. A future of continued rapidly rising prosperity for the OECD looks less assured than it did before the global crisis, whereas several decades of high growth look to be quite a likely scenario for Africa. At present, the typical investment portfolio has massive exposure to the OECD countries and negligible exposure to Africa. This looks unlikely to be appropriate for the coming decades.Africa’s economic potential extends well beyond commodity exporting. Per capita GDP in China is already above the global average, so its days as the low-wage factory of the world are limited. Africa will soon be the last remaining major low-wage region. It has an enormous coastline, more proximate to both European and North American markets than Asia is. Over the past three decades, offshoring shifted labor-intensive manufacturing from the OECD countries to Asia. In the next decade, expect the same process to begin shifting these activities from Asia to Africa. Contrary to fears that the “Dutch disease”² must inevitably make nonresource exports uncompetitive, the Asian examples of Malaysia and Indonesia have demonstrated that successful exporting of natural resources can be entirely compatible with successful exporting of light manufactures.

All credit to the McKinsey author: Paul Collier is a professor of economics at Oxford University. His new book, The Plundered Planet: Why We Must—and How We Can—Manage Nature for Global Prosperity, was published by Oxford University Press in April 2010

Africa in Context

Stellenbosch scores Screaming Eagle winemaker

Few South Africans will have heard of Screaming Eagle wines, or be able to conceive of any wine being worth more than US$1000 a bottle.

Screaming Eagle is a tiny, cult winery in California’s Napa Valley and produces arguably the most sought-after wine in the US. In a coup for the SA wine industry, its winemaker, Andy Erickson, is set to lead the winemaking team at Mulderbosch Vineyards in Stellenbosch from 2011.

This follows the estate’s recent purchase by California-based investment group Terroir Capital, headed by American Charles Banks, a former partner at Screaming Eagle. The deal has been signed and is awaiting Reserve Bank approval.

“This is a substantial investment and a vote of confidence from the US that SA has exceptional potential,” says Banks. “It will enhance the transfer of viticulture and winemaking expertise between SA and California and further focus attention on the innovative strides SA has made in producing wines in an environmentally sensitive and sustainable manner.”

Mulderbosch has been imported into the US by local importer Cape Classics for nearly two decades and has become one of the most sought-after premium SA wine brands on the US market.

Current owner Ben Truter says though Mulderbosch has enjoyed huge success, “we just don’t have the capital to take it to the next level”. He believes the deal “will change negative perceptions about the local wine industry and open up the market for other American investors”.

In 2008, Banks, a former money manager for NBA players, toured the Cape’s wine farms. “It was full summer, it was beautiful. Who wouldn’t fall in love with the region?” his host Andre Shearer, CEO of Cape Classics, said at the time. As a result of their visit, Banks and Terroir Capital began considering investments in the Cape wine and hospitality industry, convinced of the “immense global potential” of fine SA wine.

They recently acquired Tulbagh Mountain Vineyards and are searching for further opportunities, including a site to build a boutique hotel. They plan “dramatic improvements” to Mulderbosch’s infrastructure.

“There are certainly many fresh ideas and refinements that we can make,” says Banks. “We’re after truly professional winemaking that expresses purity of fruit and balance. ”

Source: Financial Mail

Doing Business in Africa - SABMiller's experiences in Sudan

It’s different doing business in Southern Sudan. Just ask Ian Alsworth-Elvey. The MD of SABMiller ’s newly upgraded Juba plant spends a lot of time, as does anyone in the beer business, thinking about logistics. But here it is somehow different.

"If you ask how far it is to Torit, the capital of East Equatoria (the neighbouring state to Central Equatoria, where Juba is located), they will tell you in the dry season one day, in the wet season four days. Very few people know the actual distance," he says, adding that it is, actually, 144km.

That outlook makes sense in a region of almost 600000km² — about the size of Madagascar — where only about 100km of roads are paved.

It can take up to two weeks for delivery trucks to get to locations only 400km away, says Alsworth-Elvey, MD of Southern Sudan Beverages, as the local company is known.

It’s not just transport that requires a different tack. Setting up a business in a country that literally has nothing is a tale of persistence. Securing land, finding skilled staff and just coping in a place where there is no established legal system to guarantee intellectual property, are all hazards the company has had to deal with.

At least there is plenty of water — it comes by pipe from the Nile river, 5,2km away.

The 10-province region of Southern Sudan, whose 8-million people are due to vote on independence from the northern Khartoum-led government next month, may have an uncertain political future, but its value as a beer market is clear, he says.

The per-capita consumption of beer in the region is just one litre a year. The African average is six litres. (In SA, the figure is considerably more, at about 55 litres.) Mark Bowman, the MD of SABMiller Africa, estimates the continent as a whole could support an average consumption of 12-15 litres.

But beer remains an expensive drink in Southern Sudan and the company is counting on economic growth to make it more affordable and raise consumption.

Here, people have to work an average of 7,5 hours to buy an average serving of beer. The East African average is five hours and in SA it is one hour, while in Europe it is just 12-17 minutes.

"Beer in Africa is quite a premium product. Actually, it’s a very aspirational product," says Alsworth-Elvey.

While it bodes well for the future, doing business in the present is not easy. Building a plant in a place where there is hardly any infrastructure takes more effort.

The brewery, which opened in May last year, has four diesel-powered generators — three of which run at any one time — giving the 2,5MW it needs to run. The plant manages its own landfill site, to avoid using the local garbage dump — "an environmental nightmare", as the South African-born MD calls it.

When hiring local staff — there are 253 locals and 11 expatriates at the plant — the company couldn’t rely on formal education levels to make decisions, as few people had any beyond some secondary schooling. The company used tests to check for what Alsworth- Elvey calls "trainability" and natural intelligence. "That became our criterion for recruiting people. We recruited people and have just put in hours and hours and hours of training them."

For a company used to doing business in developing countries, such hurdles were, perhaps expected. Others were not.

When he and some colleagues were scouting for possible sites for the planned brewery, government officials unused to dealing with inward investors — or with the local landowners in such cases — sent the visitors from SABMiller out, armed with the co-ordinates of some possible locations. They did not, however, tell them that the land belonged to local communities and that they would have to get their buy-in first. It didn’t take long for problems to arise.

"We’re thinking of building a brewery," Alsworth-Elvey remembers telling the chief of one site they visited. His angry response soon disabused them of that notion.

Realising they would have to get the buy-in of any community whose land they used, they changed tack and "put out feelers" to communities willing to put up their land for investment . The new approach worked and the land on which the plant outside Juba is built is neither leased nor bought from the local community.

"They are paid a royalty based on production. They have a vested interest in making sure our business grows."

Other problems then arose. Given that Southern Sudan is a region in the process of establishing its independence from the north, it is creating its own legal system. But with this not in shape, it brought additional challenges ahead of the company’s launch last May of White Bull, the lager it had developed for the local market. It had to keep the launch brand under wraps until it was actually rolled out, as there was no way of registering the name.

"It was all done so covertly. My biggest fear was that I was going to go into the market and our competitor had (already) put out a White Bull."

The problem was that there was no way of registering the brand of an alcoholic beverage in a country officially under Islamic Sharia law.

"We could own intellectual property, but we had to do that in Khartoum. You can imagine how amenable they would have been to register intellectual property on an alcoholic product!"

That has changed and the government of Southern Sudan now has the ability to register intellectual property.

Southern Sudan Beverages is the only foreign manufacturing investment in the region at present. Its biggest competitor, Nairobi-based East African Breweries (EABL), owned by UK drinks giant Diageo, imports all its product. EABL, which makes Kenya’s well known Tusker lager, doesn’t rule out producing locally, but is not planning to do so any time soon.

"The broad consumer offering we provide together with the strong equity of our brands and our operational proximity mean that we are confident in our ability to continue to grow our brands in the region and we are well positioned to maintain our leading market share," a spokeswoman says.

This makes Southern Sudan just the latest battleground in the growing war for beer drinkers taking place across the continent.

Describing his experience as "the case study" for foreign investment in Southern Sudan, other investors are going to find it easier going than it has been for him, Alsworth-Elvey says.

One problem remains, however — and other foreigners doing business in Juba make the same observation.

It is not about the legal system, local communities or a local lack of skills. Rather, it comes from foreigners, especially in the US, who remain unwilling to do business with the company, thinking, erroneously, that Southern Sudan is subject to the same sanctions as the Khartoum-led northern half.

Africa's cities are set to swell in size

Over a third of Africa's 1 billion inhabitants currently live in urban areas, but by 2030 that proportion will have risen to a half. According to a recent report from UN-HABITAT, the United Nations agency for human settlements, the population of some cities is set to swell by up to 85% in the next 15 years. The most populous city in 2010, Cairo, will grow by 23% to 13.5m people. By 2025, however, it will have been overtaken by both Lagos (15.8m) and Kinshasa (15m). Food and water shortages, poor infrastructure and a lack of housing are among the problems faced by governments during such rapid urbanization. Progress in meeting these challenges would be shown by a fall in the proportion of slum-dwellers, who currently account for 70% of urban inhabitants.



Source - The Economist

South Africa a "Money Magnet"

South Africa attracted R27.6bn in capital in the third quarter of 2010, the Reserve Bank's Quarterly Bulletin showed on Thursday.

The R27.6bn exceeds the net inflow of capital in the second quarter, and brings the net cumulative inflow of capital in the first three quarters of 2010 to R98.7bn, the bulletin said.

During the corresponding period in 2009, capital inflows amounted to R92.4bn.

Inward capital flows mainly occurred in the form of portfolio investment, while inflows of direct and other investment capital remained moderate over the period.

South Africa and other emerging market economies have experienced strong capital inflows, as their markets still offer higher yields compared to developed market economies.

The bulletin forecasts that capital flows to emerging market countries are likely to persist for some time due to favourable growth prospects, among other factors.

It says governments of recipient economies are faced with the challenge of dealing with such flows and their impact on exchange rates, sectoral profitability and resource allocation.

Foreign direct investments continue to struggle, receding from an inflow of R2.9bn in the second quarter to an inflow of R1.1bn in the third quarter.

The bulletin reports that the inflow of capital in the third quarter was mainly due to an increase in loan finance extended by non-resident holding companies to domestic subsidiaries, and equity investment in a domestic paint manufacturing company.

Sasol leads the way with synthetic jet fuel

SASOL, South Africa’s global, oil-from –coal pioneer, scored a major triumph at the AAD 2010 exhibition at the Ysterplaat Air Force Base, Cape Town, recently when the world’s first flights using its internationally approved, fully synthetic jet fuel, landed there soon after the gates to the exhibition area had opened.

The landmark flights to Ysterplaat took off a few hours earlier from both Lanseria International Airport, near Johannesburg, and Kruger Mpumalanga International Airport, Nelspruit.

Involved in the historic operation were three National Airways Corporation turbine-powered aircraft-the flagship Hawker 4000 corporate jet, atop-of-the-range Beech craft King Air 350i and a PAC750 equipped with a state-of-the-art airborne surveillance system-and a chartered Boeing 737-200,all of which were the first aircraft to use Sasol’s 100% Synthetic Jet A-1.

This is the only fully synthetic fuel that is a true “drop-in” replacement for conventional jet fuel that is approved for commercial use in all types of turbine aircraft around the world. The Jet A-1 fuel that was used is made using Sasol’s proprietary Fischer-Tropsch technology that produces liquid fuel from coal at its Synfuels production plant in Secunda, South Africa.

Although the 100% synthetic Jet A-1 fuel is not yet commercially available, Sasol has supplied jet fuel since 1999 that is a 50:50 blend of synthetic and conventional ,crude-oil-derived JetA-1 fuel to the country’s main gateway, the OR Tambo International Airport, near Johannesburg.

The flights to the AAD exhibition using the 100% synthetic jet fuel were the culmination of a complex process that resulted in Sasol receiving the worlds first formal approval of a fully synthetic jet fuel published in Issue 6 of the Defence Standard 91-91 in April 2008, followed soon after by the inclusion in the USA jet fuel specification ASTM D1655.

Sasol is an integrated energy and chemicals company operating predominantly in South Africa ,where its history dates back to its establishment in 1950.Sasol currently has operations in 38 countries, employs about 34000 people, and is listed on both the Johannesburg and New York stock exchanges.

Technology is core to Sasol and, through its proprietary Fischer-Tropsch (FT) technology; Sasol converts coal and natural gas into liquid fuels, fuel components and chemicals. Sasol has chemical manufacturing and marketing operations in South Africa, Europe, Asia, and the Americas, and it mines coal in South Africa, extracts gas in Mozambique and oil in Gabon.

Pioneering Alternative Jet Fuels

Although Sasol focused primarily on the production of chemicals, road transportation fuels and the jet fuel from crude oil in the first four decades of its existence, a prediction in the mid-1990s of an imminent shortage of jet fuel at what is now the OR Tambo International Airport prompted Sasol to investigate opportunities for the production and qualification of synthetic jet fuel.

Road transportation fuels specifications are allowed to vary from one region to another, but the development of a viable alternative fuel for aviation application requires a drop-in replacement fuel with global acceptance and approval by all the international stakeholders.

In June 1996, Sasol embarked on discussions with international specification authorities, including the American Society for Testing and Materials(ASTM) and the British Ministry of Defence (UK MoD) .Between 1996 and 1998 ,Sasol conducted extensive laboratory and engine test work in South Africa and the USA to gain understanding ,acceptance, and demonstration of the use of an FT-derived synthetic jet fuel component up to a maximum of 50 volume percentage when blended with crude oil-derived jet fuel.

In April 1998, Sasol became the first company in the world to gain approval for the commercial use of a synthetic jet fuel component at up to 50% in a blend with petroleum kerosene as Jet A-1 .This approval for the use of iso-paraffinic kerosene (IPK), produced by the Sasol Synfuels facility in Secunda, was written into the UK MoDs Defence Standard (DEFSTAN 91-91),Issue 3.On February22,1999,Sasol made history by certifying the first batch of Sasol semi-synthetic jet fuel at the Natref refinery in Sasolburg, and since then, most aircraft leaving OT Tambo International Airport have flown on Sasol’s semi-synthetic jet fuel.

100% Synthetic Jet Fuel

Between 2001 and 2007, Sasol continued with extensive test work on blends of potential jet fuel streams from its synfuels facility with the aim of gaining official qualification of a fully synthetic jet fuel. In support of this objective, the prestigious Southwest Research Institute (SWRI) in San Antonio, Texas, was commissioned and a joint research report was submitted to the UK MoD in December 2003 with a request to approve the use of fully synthetic jet fuel as a commercial aviation turbine fuel.

The major engine manufacturers required further engine tests, including an endurance test on a Pratt & Whitney JT-9D engine, to be performed before final approval could be given. The 250-hour endurance test, conducted in February 2006 at the engine overhaul facilities of South African Airways in Johannesburg, necessitated the special production of 1, 2-million litres of synthetic jet fuel in Secunda.

Finally, in April 2008, the formal approval of Sasol fully synthetic jet fuel from the Synfuels plant in Secunda was published in Issue 6 of the Defence Standard 91-91.

Following shortly afterwards, Sasol’s fully synthetic jet fuel was also included in the USA jet fuel specification, ASTM D1655.Sasols 100% synthetic Jet A-1 from Synfuels was thus approved for commercial use in all types of turbine aircraft in the USA (ASTM D1655) and the rest of the world (DEFSTAN 91-91), and it remains on this day the only fully synthetic fuel that is a true drop-in replacement for conventional jet fuel.

The fuel is fully fungible and aligned with the current aviation infrastructure .It is compatible with existing jet engine requirements and can be used with conventional crude oil-derived jet fuelling systems.

Synthetic Jet A-1 Production

Sasol Synfuels is based in Secunda where it operates the world’s only commercial, coal-based, synthetic fuels manufacturing facility. A high temperature Fischer-Tropsch (HTFT) process, utilizing the unique Sasol Advanced Synthol technology, converts low-grade coal into fuel (LPG, petrol, kerosene and diesel) as well as chemicals .The coal-to-liquids (CTL) plant in Secunda produces approximately 160000 barrels per day of FischerTropsch Products.

This facility uses the Sasol, fixed bed, dry bottom (FBDB) gasification process to convert the coal into synthesis gas. The Fischer-Tropsch process is catalyzed, chemical reaction in which the synthesis gas, a mixture of carbon monoxide and hydrogen, is converted into liquid hydrocarbons of various forms (synthetic fuel).

The Fischer-Tropsch process can proceed through low temperature fischer-Tropsch (LTFT) or HTFT technology, with the main differences between the two processes being the operation parameters, reactor type, product spectrum and catalyst type.

The range of possible feed materials for the Sasol Fischer-Tropsch synthesis process are firstly, coal (coal-to-liquids, CTL), secondly, natural gas (gas-to-liquids, GTL) or biomass (biomass-to-liquids, BTL).These feed stocks can also be used in combination as is done at the Synfuels’ plant in Secunda where coal and natural; gas have been used together as feedstock since 2003 when pipeline bringing natural gas from Mozambique to Secunda was commissioned.

Five separate hydrocarbon streams in the Synfuels complex, as stipulated in Issue 6 of DEFSTAN 91-91, have been qualified for use in blending 100% Synthetic Jet A-1 .The product that was used in the first demonstration flights last month was blended from two of these streams. These were iso-paraffinic kerosene, which is also used routinely in the semi-synthetic blends supplied to the OR Tambo International Airport, and an aromatics-containing stream derived from severely hydro-treated coal tar kerosene.

It is the latter stream that contributes the required minimum of 8% aromatics and provides the high density and elastomeric seal swell properties to make the synthetic jet A-1 seamlessly compatible with conventional crude oil-derived jet A-1 . A part from the clean-burning nature of the synthetic jet fuel, leading to lower emissions than from conventional Jet A-1, the synthetic product has been shown to contain significantly better thermal and oxidative stability properties than normal jet fuels. This could enable the development of more efficient engines, running at higher temperatures than at present.

Alternative Jet Fuel Developments

Based on the two pioneering Sasol-specific synthetic jet fuel international approvals mentioned above, and with the worldwide drive to qualify alternative jet fuel for commercial use, the need for a generic approval protocol and specification for alternative jet fuel was identified by the aviation community.

The approval process and qualification protocol that was developed by the industry during Sasol’s seven-year quest to qualify 100% synthetic jet fuel became the benchmark for any future alternative fuel. It was subsequently formalized and adopted by the ASTM as specification D4054 “Standard Practice for Qualification and Approval of New Aviation Turbine Fuels and Fuel Additives”.

During the first generic approval process, five blends of individual Fischer-Tropsch-derived synthetic paraffinic kerosenes, blended with crude oil derived jet A, Jet A-1 or JP-8 fuel to produce semi-synthetic jet fuel, were evaluated. Sasol provided three of the synthetic kerosene samples while the other synthetic products were provided by Shell and Syntroleum.

A report prepared for the coordination Research Council in September 2008 concluded that semi-synthetic jet fuel containing up to a maximum of 50% volume of synthetic paraffinic kerosene derived from synthesis gas via the FT processes, complying with specified properties, would be fit for purpose. This was further validated by eleven years of commercial operation on Sasol semi-synthetic jet fuel using its iso-paraffinic kerosene.

In September 2009, a new ASTM specification D7566 (aviation turbine fuel containing synthesized hydrocarbons) was approved. This means that synthetic, FT-derived jet fuel component from any CTL or GTL plant can be blended up to a maximum of 50% of volume in crude oil derived jet fuel-this marked the first generic approval for a jet fuel component, independent of the production facility, based on the Sasol-developed protocol.

Looking Ahead

Sasol has actively participated in changing the jet fuel landscape and pioneering the way for the approval and use of viable alternative fuels. This also opened up opportunities for Sasol to include kerosene in its product offering to the international market from future GTL and CTL Plants.

The approval of synthetic jet fuel without aromatics, as is the case with LTFT jet fuel, is under investigation by the international aircraft industry, and Sasol is part of this initiative. The challenge is the legacy aircraft still in use that need aromatics to ensure elastomeric seal swell, thereby enabling the proper functioning of fuel system.

New and future aircraft are designed to handle fuel without aromatics. The generic qualification of synthesized aromatics as a jet fuel component is currently being pursued to enable fully synthetic LTFT jet fuel in the interim.

A further aspect that is currently receiving more and more research focus is the development of pathways to increase the renewable carbon content of jet fuels, in order to help the aviation industry with the reduction of its carbon footprint.

Given the pioneering role that Sasol has played thus far in alternative aviation fuels and with an increased international focus on all synthetic jet fuels including FT-based synthetic Jet Fuels, this aviation fuels area is exciting place to be.

Source

World Cup "worth every cent" - Tourism Minister

More than 309 000 tourists travelled to SA during June and July for the Soccer World Cup, spending R3,6bn during the six-week tournament, Tourism Minister Marthinus van Schalkwyk said yesterday.

The findings of a survey done by the Department of Tourism and SA Tourism, were published yesterday.

Fans stayed an average of 10,3 nights and Gauteng, the Western Cape and KwaZulu-Natal were the most visited provinces. The largest number of visitors came from the US, with 30000 fans, followed by Mozambique with 24000 visitors and the UK with 22000 visitors.

The World Cup boosted overall arrivals, with those between January and September reaching 5-9-million, up 16,8% year on year.

"The World Cup was a resounding success," said Mr van Schalkwyk. "After a year of hard work the world watched in awe, after much criticism in the lead-up to the tournament, as SA hosted one of the most successful tournaments. The tournament was worth every cent and every minute that was invested in it."

While dozens of figures were bandied about during and in the weeks after the tournament, this is the first considered and researched report to be published.

"Many of the figures showed overall arrival numbers but these figures only include those that came for the World Cup. These figures have been cleaned up by various departments and we are confident in the integrity of the data," said Mr van Schalkwyk.

Roshene Singh, chief marketing officer of SA Tourism, said many fans were first-time visitors , particularly from the US, where 92% of travellers had never visited SA before .

Almost 90% of World Cup visitors said they would visit again while 96% said they would recommend a visit to friends and family. More than half of those who had been to other World Cups — 20% of all those surveyed — said this was the best tournament they had attended.

Mr van Schalkwyk said the World Cup was a vital building block in the tourism sector. "The World Cup really enhanced the image of SA and we see promising signs in the forward booking in the first quarter of next year."

The departments of t ourism and s port were still identifying tournaments and sports events SA would bid for in the future, he said. The process would be managed by the n ational c onvention b ureau, due to be set up early next year.

The Olympics was on the government’s radar but no decision had been taken, Mr van Schalkwyk said. "We are still assembling the facts and it is still early in the process.

"However, in our discussions we will have to look at benefits of hosting an event that essentially takes place in one city ," rather than many.

Source

My note: I saw the comments David Goldblatt made to ESPN before the Nelson Mandela Challenge, and would like to express my strongest disagreement with his uninformed opinions.

South African Stock Market Competition

Africa investor, South African Chamber of Commerce in America (SACCA), and Afribiz announce the first African Stock Investment Competition (ASIC) for college and university students. ASIC is the only competition of its kind to expose students outside of South Africa to the emerging capital markets of Africa. ASIC runs from January through September 2011.

Read more here.

SA Tourism Market Continues to Grow

The SA tourist market has continued to grow after the 2010 Fifa World Cup, Tourism Minister Marthinus van Schalkwyk said on Monday.

"The tournament has positioned South Africa as a viable investment market and a spinoff of improved perceptions abroad could have a long-lasting impact, not only on South Africa and its development, but on the continent as a whole," he told reporters.

The minister said tourist arrivals between January and September increased by 16.8% when compared to the same period in 2009.

"I have no doubt that South Africa is reaping the rewards of hosting the World Cup."

He said 309 000 tourists visited the country for the soccer tournament and spent more than R3.6bn.