Infrastructure Development Continues to Drive the South African Chemicals Market: Frost & Sullivan

CAPE TOWN, South Africa, February 8 - The economic turmoil of 2009 had a profound impact on the global
chemicals industry. Demand for chemicals fell off sharply as end-users came
to terms with low consumer confidence and declining purchasing power.

(Logo: www.newscom.com/cgi-bin/prnh/20081117/FSLOGO)

However, Frost & Sullivan (www.frost.com) notes that South
Africa's chemicals markets remained fairly robust last year, thanks mainly to
significant investments in infrastructure leading up to the 2010 FIFA World
Cup. So far, a total of R11.92 billion has been spent towards stadium
construction alone, and suppliers of construction chemicals have benefited
from this spending.

"Government spending leading up to the World Cup has buffered the local
economy from the demand concerns facing the global market," notes Frost &
Sullivan chemicals programme manager Mani James. "The construction sector
performed well through the recession and was growing at just over 10 percent
last year. However, demand from other end-user groups, including the
agriculture, mining and consumer sectors, is still under pressure."

James notes that the last few months leading up to the World Cup will see
the final drive in infrastructure preparations. As this activity subsides in
the second half of 2010, the economy is expected to slow and this will be the
major challenge facing local industries. However, transportation, water works
and electricity infrastructural projects continuing over the next two to
three years will provide opportunities.

"The local automotive industry is also expected to return to a growth
cycle for the first time in three years, albeit at a slow rate," James adds.
"This will present opportunities for automotive suppliers including platinum
producers, plastics manufacturers and all associated consumable materials
suppliers."

Palladium has also become pegged as a valuable investment opportunity as
an affordable substitute for platinum in automobile production. This might
present opportunities for chemicals companies to target the expected growth
amongst palladium miners.

"Our advice would be for chemicals manufacturers to target their
production strategies towards the construction industries and palladium
mining," James says. "They should also prepare for the risks of a strong
inflationary environment, and high labour union costs."

James also sees a need for the local industry to become more globally
competitive in order to boost export profiles and the associated production.
However, the strength of the rand could make this difficult.

If you are interested in more information on Frost & Sullivan's analysis
of the South African chemicals industry, then send an e-mail to Patrick
Cairns, Corporate Communications, at patrick.cairns@frost.com, with your full
name, company name, title, telephone number, company e-mail address, company
website and country.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to
accelerate growth and achieve best-in-class positions in growth, innovation
and leadership. The company's Growth Partnership Service provides the CEO and
the CEO's Growth Team with disciplined research and best-practice models to
drive the generation, evaluation, and implementation of powerful growth
strategies. Frost & Sullivan leverages over 45 years of experience in
partnering with Global 1000 companies, emerging businesses and the investment
community from 40 offices on six continents. To join our Growth Partnership,
please visit www.frost.com.

    Contact:
    Patrick Cairns
    Corporate Communications
    Frost & Sullivan
    P: +27-18-464-2402
    E: patrick.cairns@frost.com

www.frost.com

Patrick Cairns, Corporate Communications of Frost & Sullivan, +27-18-464-2402, patrick.cairns at frost.com