Company news in brief

Eskom aims to stabilise grid by March

State utility Eskom will work to stabilise the power grid by the end of March following South Africa's most severe blackouts in a decade, president Cyril Ramaphosa said on Wednesday.

Ramaphosa, who cut short a trip to Egypt to deal with the crisis, met Eskom's management and board on Wednesday.

“Going right through March, they will be seeking to do everything they can to restore the stability of the network,” he told a briefing for journalists.

He said suspected sabotage at power stations contributed 2 000 megawatts (MW) of lost capacity during the past week's outages and needed to be investigated.

“There are certain people within the system who take it upon themselves to go and switch off certain instruments that finally lead to us losing so many megawatts,” he said without elaborating.

The public enterprises and energy ministers will present proposals to cabinet today aimed at closing South Africa's energy gap, Ramaphosa said. – Nampa/Reuters

Ghana company discovers 1.5 bln barrels of oil

Ghana's Springfield E&P said on Wednesday that it had discovered 1.5 billion barrels of oil and 0.7 trillion cubic feet of gas off the West African country's Atlantic coast.

The discovery is a significant one in a country that currently produces about 200 000 barrels of oil per day (bpd), about half of it from British company Tullow's Jubilee field.

Springfield, a wholly-owned Ghanaian company, said in a statement that the undiscovered potential of the block was estimated at over 3 billions barrels of oil and gas.

Ghana's government has been frustrated by the slow pace of offshore development and is working on revising its licensing laws in an effort to spur production.

Its deputy minister for petroleum said last month that Ghana had expected 14 wells to be drilled and US$890 million invested between 2013 and 2016, but not a single well was drilled and companies spent just US$95 million. – Nampa/Reuters

Nestle invests in cocoa sustainability

Nestle is spending 45 million Swiss francs (US$45.13 million) a year on efforts to source cocoa sustainably, the food company said, also citing progress in reducing child labour in its West African supply chain.

The company, which has spent about 220 million francs over the past ten years on efforts to tackle child labour and deforestation in cocoa, said it aimed to have 100% sustainable cocoa sourcing in its confectionary products by 2025.

Nestle's child labour monitoring and remediation system (CLMRS), a part of its sustainably sourcing scheme, currently covers just 57% of the cocoa it sources in West Africa, where child labour is prevalent.

Coverage under the CLMRS does not mean the elimination of child labour, but means that the issue is being addressed or remedied.

“We're proud Nestle has made this commitment but [it's] a daunting challenge to go from 15% [industry-wide monitoring scheme coverage in the Ivory Coast] to 100% in five years,” said Nick Weatherill, executive director of the International Cocoa Initiative (ICI), an organisation working with governments and industry to eliminate child labour.

Chocolate makers like Nestle, Mars Wrigley, Mondelez, Barry Callebaut and Hershey's are all ramping up their sustainability schemes in a bid to meet consumer demands for ethically sourced products. – Nampa/Reuters

Blow for AB InBev's asset sale to Asahi

Australia's competition regulator raised concerns over an US$11 billion deal by Anheuser-Busch InBev to sell its local operations to Japan's Asahi, dealing a blow to the world's largest brewer's efforts to cut debt.

The Belgium-based brewer, weighed down with some US$100 billion net debt after its 2016 acquisition of rival SABMiller, has been selling assets and took its Asian business public this year to reduce debt and focus on other fast-growing markets.

It hoped to close the sale of Carlton & United Breweries (CUB) to Asahi in the first quarter of 2020 and use the bulk of the proceeds to cut debt.

But the Australian Competition and Consumer Commission (ACCC), in a preliminary view, said that the deal will reduce competition in the cider market and may also do so in the beer market, adding it will make a final decision in March.

“Because of these concerns, it is unlikely that the deal will get passed. Asahi and AB InBev have to negotiate the price again,” said Jeanie Chen, senior equity analyst at Morningstar. She added that Asahi may need to divest its cider business or AB InBev would need to find another buyer. – Nampa/Reuters

Trafigura starts financial year strongly

Trafigura expects another strong trading performance in its financial year that began on Oct. 1 and one of the global commodities trader's main aims will be to make newly acquired zinc firm Nyrstar profitable, the chief financial officer said.

Despite stellar trading figures in the year that ended on Sept. 30, particularly from its oil business, Trafigura still reported its lowest annual net profit in almost a decade after a string of losses in its physical asset portfolio.

Last year, Trafigura's stellar 2019 trading results were bogged down by losses in some of its related firms, such as its Belgium-based zinc producer Nyrstar.

Its downstream and retail arm Puma Energy posted significant losses but was being overhauled by a new chief executive, who has said he plans for divestments and deleveraging the company.

“I would not put Puma in the category as a positive contributor next year. If they do well, they will be back to flat profitability,” Christophe Salmon said, adding Puma's Australian unit, which has been a drag on the firm, was expected to be sold in the next two months. – Nampa/Reuters