November 2011

Anhydrous HF in South Africa

Opportunities, Growth and Investment

Chris Potgieter, BFluor Chemicals

Purpose

• Illustrate lucrative SA Fluorochem industry developing

• Describe highly supportive environment

• Attract and guide investment to opportune areas

• Not an opportunity list though

• Move focus - fluorspar source to fluorochemical production

Content

• Background – a local AHF source as trigger

• South African Fluorochemical Cluster – getting a second address

• Fertile bed – Skills, technologies and Government framework

• Strategies – to exploit the opportunities

• What can we offer?

• Conclusion

Background

• Major expansion in South African fluorspar availability coming (refer SA

Fluorite and Sephaku Fluoride presentations)

• More important though – a local source of anhydrous HF is imminent

• Two alternatives on the EIA cards – Sephaku Fluoride and HF from FSA

at local phosphoric acid producer

• Provide the spark to the powder keg (technology and skills base)

A second address

• Historically a fluorochemical cluster developed around SA’s nuclear

program in the ‘80s (refer Pelchem presentation)

• Government driven (R+D investment, skills development,

industrialization efforts)

• Private sector limited to fluorspar mining

• Some final product manufacturing (PTFE filters, fluoropolymer coatings)

• Things are changing

A second address

• Fluorochemical Cluster in Ekandustria Industrial Park east of Pretoria

• Catalyzed by Sephaku’s HF/ATF project (refer presentation)

• Situated at logistically optimal node point (close to source, two export

corridors)

• Extensive authority support at all levels (National, Provincial, Local)

• Inclusion in planning and budgets

A second address

• Rejuvenation Strategy – target market clusters (automotive)

• Infrastructure upgrades (Critical Infrastructure Program, Provincial

Budgets)

• Inclusion into Spatial Development Frameworks

• Proximity to Fluorochemical Chair at Pretoria University (skills

development integrated with technology development)

Emerging Market

• Market pull is there (African population growth into middle class)

• Major investment into health care (organic fluorides)

• Alternative energy drive (fluoropolymers, inorganic salts)

• Nuclear energy (strategic initiative)

• Communication networks

• Building programs (hospitals, schools)

• Automotive industry

Fertile bed

• Highly experienced fluorochemical scientists, engineers and technicians

• Well established international networks (cooperation agreements)

• Skills development in a focused environment with massive Government

support

Fertile bed

• Skills base profile cover full range of required technologies

• New generation fluorine production

• Direct and electrochemical fluorination

• Plasma technologies

• Organic intermediates, monomers, polymerization

• Develop technology mix to fit market mix

Investor Strategy

• Blank drawing board, the sky is the limit

• Product/market sandbox perspective – four areas

• Existing products into existing customer base (quick entrée, step

growth, low ceiling to gain market share, good to establish a

manufacturing base) – Follower strategy

• Existing products into new markets (market development, substitute

products) – Marketing strategy

Investor Strategy

• New products into existing market (high level of innovation, technology

development, expensive upfront investment) – Product development

strategy

• New products into new markets (high risk/high return, strong venture

capital support, long development period) – Groundbreaking strategy

• Profile of investor will determine

What can we offer?

• Market development support (e.g. sales agency, market research)

• Partnering or JV opportunities (all business segments)

• Production technologies (sourcing, development, implementation)

• Developing the right technology mix to serve the selected market mix

• Project implementation (all phases)

• Guidance in local business environment (stakeholders)

Conclusion

• Why do you want to ship a low value commodity around the

world?

• When you have all the opportunity to establish the value-

add close to source?

• A world class HF source linked to a vast fluorspar resource

will trigger a dynamic Fluorochemical Industry in South

Africa!

Keep watching this space!

Thank

you