Refinery Capacity Vital to the Petrochemicals Markets in South Africa and Nigeria, Finds Frost & Sullivan

CAPE TOWN, South Africa, May 13, 2010 - The petrochemicals market is the foundation of many chemicals industries,
as it provides the building blocks for most chemical products. For instance,
olefins (ethylene, propylene, butadiene) and aromatics (xylene, toluene,
benzene) are used in end-user markets such as paints, plastics, explosives
and fertilizers.

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New analysis from Frost & Sullivan (www.chemicals.frost.com),
Strategic Analysis of the South African and Nigerian Petrochemicals Markets,
finds that the Nigerian petrochemicals market (excluding exports of crude
oil) was worth $14.03 billion in 2008 and forecasts it to reach $29.7 billion
by 2015. South Africa's petrochemicals market was worth $18.37 billion in
2008 and Frost & Sullivan forecasts it to increase to $24.5 billion by 2015.

If you are interested in more information on this study, please 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, city, state and country.

"The demand for petrochemicals products is highly driven by activities in
the end-user segments," says Frost & Sullivan Research Analyst Tatenda
Zingoni. "South Africa has a well developed manufacturing sector, which
provides a ready market for end products of the petrochemicals market."

South Africa's petrochemicals market is more developed than other
sub-Saharan markets, with the capacities of the local refineries exceeding
domestic demand. South African refineries operate at optimum capacity and
this enables the country to export to other countries in the region.

"The South African market is unique in the region because of the
production of petrochemicals from coal and gas feedstock using coal-to-liquid
(CTL) and gas-to-liquid (GTL) technologies," Zingoni says.

On the other hand, Nigeria depends on imports of petrochemical products,
despite the presence of large crude reserves. This is attributed to the
country's low refinery-capacity utilization (approximately 40 per cent of the
full capacity), which results in lower petrochemical yields, creating a need
for imports.

"A restructuring of the operation of Nigerian refineries, with greater
private sector participation, is likely to increase the capacity utilization
of the refineries," notes Zingoni. "Once this is instituted, the cost
structure of the Nigerian petrochemicals market is set to improve."

Crude is the main feedstock for the production of olefins and aromatics
in Nigeria and South Africa. Although Nigeria has an abundance of crude oil
deposits, the cost of production of petrochemicals is high. This is due to
issues such as disruptions in supply of crude to the refineries due to
militant activity, general corruption in the country and inefficiency in the
way refineries operate. Steps by the Nigerian Government to increase the
benefits derived by communities in the oil regions are expected to bring
stability and minimize disruptions.

For the South African market, coal is a crucial feedstock for the
country's unique synfuels and petrochemicals industry and it reduces the
country's dependence on crude.

Despite the increasing global refinery capacity, sub-Saharan Africa has
been reliant on imports. South Africa has plans to build another refinery by
2015 in the Coega Industrial Development Zone. The refinery could enable
sub-Saharan Africa to become independent with regard to its petrochemical
needs.

"Crude for the refinery will be supplied from Angola and Venezuela,"
Zingoni explains. "Debate is still however raging as to whether it is prudent
to bring this refinery on stream given the spare refinery production
capacities in the Middle East, India and South Korea."

Strategic Analysis of the South African and Nigerian Petrochemicals
Markets is part of the Chemicals & Materials Growth Partnership Services
programme, which also includes research in the following markets: South
African Market for Chemical Solvents and Sub-Saharan African Biofuels Market.
All research services included in subscriptions provide detailed market
opportunities and industry trends that have been evaluated following
extensive interviews with market participants.

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    Strategic Analysis of the South African and Nigerian Petrochemicals
    Markets
    M534

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

www.frost.com

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