The man running South Africa’s largest chemical company

With only a few months under his belt, Sasol’s new CEO has big plans for the massive chemicals company, including a stronger balance sheet and a focus on local opportunities.

In April this year, Baloyi succeeded Fleetwood Grobler, who had held the CEO role for over four years. Like his predecessor, Baloyi has spent most of his professional life at Sasol, having joined the company in 2002.

Baloyi grew up in Hammanskraal, just north of Pretoria, where he also attended Hans Kekana High.

He obtained his undergraduate, honours and master’s degree in Chemical Engineering from the University of the Witwatersrand.

He later returned to university—this time the University of Pretoria—to obtain a master’s degree in Engineering Management.

Baloyi started his career in the UK as a Process Engineer at MW Kellogg, where he performed process engineering activities related to design.

He only held this job for a year before joining the company where he now sits at the helm – Sasol – in 2002.

At Sasol, he also worked as a process engineer, becoming a senior process engineer after two and a half years.

In 2008, he had a brief 10-month stint as a senior process engineer for KBR, a US-based engineering company, before returning as an Engineering Manager at Sasol Technology.

Baloyi has been at the company ever since, climbing the ladder and holding positions like executive manager of the Sasol Synfuels Operations in Secunda, VP of Engineering for Centralized Maintenance & Operations Support, and Senior Vice President for Regional Operations and Asset Services.

In April 2022, Baloyi was made Executive Vice President and, two years later, elected CEO of one of South Africa’s largest companies.

When Baloyi’s CEO appointment was announced, Sasol’s board described the process leading up to it as “a comprehensive recruitment programme to identify a successor”. 

The company said both internal and external candidates were considered, and the process sought to identify the best leader for the role to ensure the candidate would be best positioned to serve the company’s interests most effectively going forward—and Baloyi fit the bill.

“The board has full confidence in Simon’s ability to lead Sasol. We believe that his strategic outlook, excellent leadership skills, technical and business acumen and deep experience of our operations will stand him in excellent stead to take over the helm,” the company said.

Alongside his new title and the board’s trust, Baloyi also inherited a company rife with challenges – one of the most pressing being its financial standing.

Sasol has grappled with a significant debt burden for years, primarily stemming from its substantial investment in the Lake Charles Chemicals Project in the US.

This project saw the company pump hundreds of billions into a project that was ultimately written down to R45.5 billion, with half of it sold off, meaning Sasol has lost R120 billion from the Lake Charles project. 

This debt has put pressure on the company’s financial position and limited its ability to invest in growth initiatives.

This was in addition to the usual challenges of operating in the resource sector, with fluctuating oil and coal prices weighing on the company’s operations.

In its latest results, Sasol reported a loss of R44 billion, largely due to its struggles in the US and South Africa.

Sasol’s struggling financials did not encourage investors, with the company’s share price down 53.90% in the past five years and down 49.78% in the past year.

On top of this, Sasol has faced increasing environmental pressure over the past few years, with many calling on the company to reduce its carbon footprint and address concerns about greenhouse gas emissions.

The company has been implementing initiatives to transition towards a lower-carbon energy mix, but these efforts have presented significant technical and financial challenges.

Sasol’s water consumption has also been a subject of scrutiny, particularly in regions facing water scarcity. The company has been working to improve its water efficiency and reduce its reliance on freshwater sources.

Baloyi told News24 that this issue is close to his heart. The community he grew up in had no running water, so they were reliant on wells.

“It teaches you to look after things. You don’t go there and finish all the water. You have to think about other people,” Baloyi told News24.

“We would also use firewood. But to get the wood, you can’t chop down the tree completely – unless it was struck by lightning and is dead. Otherwise, you have to almost trim it. Take what you need, but if you kill the tree, you’ll run out of firewood,”

“I didn’t think about it at that time, about the wisdom of people that came before us. But now, when I reflect, I realise that these guys had this circularity and sustainability in mind as they went through their lives.”

However, one of Baloyi’s top priorities since taking the helm was looking after the company’s financials. Since he started in April this year, Balyi has hit the ground running.

His first order of business was to streamline the organisation by completely changing its operating model.

He separated the international chemicals business from the Southern African business, which is predominantly a coal and gas business.

His goal in doing this was to ensure that one business was not subsidising the other, and all aspects of the company could stand by itself.

To aid in this, Baloyi has implemented “self-help measures” at its international operations, with dedicated leadership positions to ensure those businesses are sustainable.

Baloyi acknowledged to Biznews that the Lake Charles Project was “too big” for Sasol, and the lesson he took from that is never to overcommit the company to a project it simply cannot handle.

This split operating model also allows Sasol to hone in on its Southern African operations, which Baloyi said is rife with opportunities. 

For example, in September this year, Eskom and Sasol signed a memorandum of understanding to jointly explore the potential to introduce liquified natural gas (LNG) to replace natural gas imports from southern Mozambique, which are currently set to decline sharply from 2027.

However, Baloyi emphasised that the opportunities Sasol takes on will be based on the company’s strategy and what it can afford.

He explained that Sasol’s near-term strategy – which covers the next three years – is focused on strengthening and growing.

“We need to strengthen the foundation, whether it’s locally or abroad; we have to make sure that businesses are running at full potential and generating the maximum possible cash,” he said.

“We are not yet there yet; some of the businesses are at 90%, but others – especially internationally – are much lower than where I want us to be.” 

Therefore, he explained that Sasol’s immediate focus is to make sure that all businesses generate cash. 

“Once we have full cash generation – once we’ve reached our potential – we’ll then focus on firstly subsistence capital to make sure that we maintain our business from an integrity and safety point.”

After this, he said the real “competition for capital” would start as Sasol leverages its balance sheet and returns capital to the company’s patient shareholders.

“I’m glad that we’ve launched a new dividend framework and policy that’s going to allow us to do that so we can slowly start deleveraging and go into what we call ‘sustainable debt levels’,” he said.

However, he emphasised that there needs to be healthy competition between growth and returning cash to shareholders and that the growth they are after must be disciplined.

Baloyi noted the scale at which Sasol operates and the pressure that comes from running one of South Africa’s largest and most important companies.

Sasol is not only one of the country’s largest corporate taxpayers but also one of its largest employers, responsible for about 500,000 indirect and direct jobs. 

The company is also responsible for an estimated 5% of South Africa’s GDP and produces a large share of the country’s fuel.

“Quite simply, the company is irreplaceable, so it has to be part of this landscape for as long as it takes,” he said.

“There will definitely be investment as we transition – because this company must transition from predominantly coal into a sustainable energy company, and most of that we would want to do at home.”

“So, there will be massive investments at home, but before we get ahead of ourselves, we must first fix our balance sheet, make sure we’ve got a very, very strong balance sheet, and once we have it, we can explore near-term growth areas.”