Historical Overview of the South African Chemical Industry : 1896 - 2002

[ Introduction | AECI | SASOL | Dow Sentrachem | Conclusion ]

Dow Sentrachem

In 1967 National Chemical Products (NCP), the Industrial Development Corporation (IDC) and Federale Volksbeleggings (FVB) pooled their chemical interests into a single entity, Sentrachem. The origins of some of these chemical interests, which go back to the 1930s, are outlined below.

National Chemical Products (NCP)

For many years after the formation of Dow Sentrachem, NCP was the biggest profit earner of the various divisions and, equally importantly, was the nursery of many of the parent company's management team. NCP was established in 1935 by George Irvin, co-founder of the fishing company Irvin and Johnson, now known as I & J. The original company, called National Maize Products, built a plant in Germiston to manufacture alcohol from maize. Rapid increases in the price of maize soon forced a change to molasses as the raw material and in 1940 the name of the company was changed to National Chemical Products.

The scope of the young company's activities soon widened. Besides alcohol, much of which was sold to SATMAR as a fuel additive, other products included methylated and rectified spirits, absolute alcohol, vinegar and dry ice. One unsuccessful venture was the manufacture of glycerine for the Government's war effort. In 1943, after two years of development the plant was closed down; demand, price and output were all lower than anticipated.

In 1940, a synthetic acetone/butyl alcohol plant was built to provide raw materials for cordite manufacture, also a war-related effort. The plant design and process were provided by the UK-based Distillers Company. The latter took a large, but not majority, interest in NCP and made available a wealth of expertise and know-how for the manufacture of organic chemicals.

Development away from the original site in Germiston took place in 1944 when NCP acquired the entire shareholding of Umgeni Distilleries in Durban. This company traced its origins back to the 1860s when a Mauritian engineer, known only as Phillippe, built a distillery on the north bank of the Umgeni river. Some of Phillipe's original buildings are still in use. The acquisition of Umgeni led to the manufacture of better grades of alcohol and placed NCP in a favourable geographic position to export some of its production.

More take-overs were to follow, most important of these were Poly-Resin Products (East London - 1956) and two yeast companies, Natal Organic Industries (Durban - 1959) and Free State Yeast (Welkom - 1959). Meanwhile the Germiston factory had steadily expanded its range of products to include, by 1960, alcohols, ketones, acids, esters, CO2 gas, mining froth-flotation reagents, phthalate plasticisers, synthetic resins, and animal feed supplements.

In 1959 NCP entered into a joint venture with SASOL, called Kolchem, to manufacture diacetone alcohol, hexylene glycol, pentaeryrithritol and detergent alkylate, using feedstocks from SASOL. The latter eventually sold its interest and Kolchem joined with Shell Chemical to form Styrochem, for the manufacture of polystyrene.

Industrial Development Corporation (IDC)/Federale Volksbeleggings (FVB)

During World War II, the Government established a chlor-alkali facility at Chloorkop, between Johannesburg and Pretoria. Known as Klipfontein Organic Products (KOP), the plant was to produce phosgene and mustard gas. Thankfully these gases were never used, and after the war production was focused on DDT and other insecticides. In 1965 KOP was taken over by a consortium of companies led by the IDC and FVB.

In 1960 the IDC promoted the Synthetic Rubber Development Company to investigate the possibility of manufacturing general purpose synthetic rubbers. A major study resulted in the establishment of the Synthetic Rubber Company (SRC) for the manufacture of a range of styrene-butadiene rubbers. Also involved were FVB, three tyre companies (Dunlop, Firestone and General) and the Polymer Corporation of Canada. Production started in 1964 with the Polymer Corporation as the licensor of the process.

The Sentrachem Group

When Sentrachem was launched in 1967 its four constituents were NCP, Kolchem, KOP and SRC. The new board which was chaired by Etienne Rousseau of SASOL and had as one of its members Jack Irvin, son of NCP's founder George Irvin, initiated an ambitious expansion programme.

The first new project was a joint venture with Uniroyal to produce rubber chemicals. This company, called Karbochem, was soon to absorb the SRC and by 1992 was a producer of synthetic rubber and rubber lattices; industrial mining and rubber chemicals; water-based lubricants; and carbide, acetylene and carbon black.

This was followed in 1969 by Safripol, a joint project with Hoechst SA, designed to produce high density polyethylene and polypropylene. A separate company, Plastomark, was set up to handle the marketing of Safripol's products.

In 1974, another joint venture, this time with the Olin Corporation, led to the formation of Aquachlor, which produced chlorine-based water sanitizers. The acquisition of Agricura, a formulator of insecticides and herbicides, provided an entry into agricultural chemicals. Subsequently called Agrihold, this company manufactured crop protection products, animal feeds and a range of veterinary products.

Besides being a primary manufacturer, Dow Sentrachem became involved with downstream converting through a group of companies operating under the control of Mega Plastics. In 1993 Delta G Scientific was acquired, signalling a new emphasis on research and development. This was designed to assist Dow Sentrachem to move out of commodity chemicals into high value-added products.

International diversification came in 1995 when Dow Sentrachem announced the purchase of the entire issued share capital of Hampshire Chemicals Corporation in the USA. Hampshire was selected for takeover since its size, products, technologies and markets complemented those of companies within the Sentrachem Group.

During the 1990s a number of factors, ranging from prolonged droughts through high interest rates to increased international competition, impacted adversely on Dow Sentrachem's profitability. These together with the decline in the value of the rand left the company in a vulnerable position. Before rationalisation within the Group could be fully implemented, the Dow Chemical Company, in 1997, successfully acquired control of Dow Sentrachem. Dow subsequently purchased Hoechst SA's interest in Safripol and restructured Agrihold into Dow Agrosciences. Since 2001 Dow have also disposed of the following parts of the old Sentrachem: NCP Alcohols to Alcofinance; NCS Resins to a consortium including Veregurd, Brait Capital and management; the sorbitol business to Afprod (a division of Tongaat Hulett); Chlorchem Division to a consortium led by Investec Private Equity. In addition the 50% share of African Amines (Pty) Ltd to Air Products South Africa and the 50% of Fluoropharm to NECSA. In 2006 Dow is composed of two main companies Dow Agrosciences and Dow Plastics.

[ Introduction | AECI | SASOL | Dow Sentrachem | Conclusion ]