Strategic repositioning of Safripol in the South African polymer industry

Abstract

Safripol is a South African polymer company producing mainly high density polyethylene and polypropylene for the South African market. Safripol used to be part of a global chemical company Dow Chemicals. Dow Chemical's divested in South Africa in 2006 and Safripol lost all the advantages of being part of a global corporate enterprise. The company is faced with a unique situation in that it is receiving monomer from Sasol, which is also its main competitor in the polymer market. The price of monomer and its low availability is putting pressure on Safripol's product margins, with a negative effect on the company's sustainability. The above was also defined as the research problem that threatens to undermine the company's competitive edge in the polymer market. It was clear from this research study that monomer and specifically propylene was the biggest burning point for Safripol regarding the price and availability thereof. Research into the South African polymer market has shown that Safripol will lose significant market share if the company is not showing additional growth in the market. The research problem is investigated through interviews, monomer availability investigations, plant capacity increasing and potential technology partner's discussions. A specific scenario planning process was also followed to help Safripol identify potential present and future scenarios that the company can investigate. The research problem was addressed by developing a strategy for Safripol to address the research objectives. Recommendations were done regarding the following: * Recommendations for additional propylene supply. * Recommendations to increase the polypropylene plant capacity. * Recommendations with regards to technology partners. * Recommendations regarding the scenario planning process.