Illovo’s economic value-add in Africa reported at R23.8bn

21st February 2018 By: Schalk Burger - Creamer Media Senior Contributing Editor

Sugar producer Illovo Sugar Africa has estimated its positive economic impact across the six countries in which it operates at R23.8-billion, which includes a R5-billion direct positive economic impact.

This is a 29% increase in the company’s total contribution to the economies over a period of only four years, a report by multinational management and social impact assessment consultancy Corporate Citizenship found.

Illovo Sugar Africa MD Gavin Dalgleish attributed the figure to its shared-value mandate, which supported agriculture’s role in job creation, economic transformation and governments’ social and economic development agendas.

“The last report was completed in 2012/13 and we have assessed our progress against this to ensure we identify gaps – or areas of improvement – early, as well as take the time to celebrate the achievements.”

“Spending on local suppliers has increased to R11.9-billion in 2016/17; payments to employees in the form of salaries, benefits and wages have increased by 50% to R3-billion; and the group continued to reinvest in the business, spending R2.7-billion on capital investments,” he said.

Total direct taxes paid in 2016/17 amounted to R311-million, while indirect taxes totalling R1.1-billion were collected on behalf of the governments, he added.

“We identified critical areas such as job creation, land rights, local supply and value chain development, capacity building, skills transfer and environmental stewardship as key to our own success and the local and national economy,” said Dalgleish.

“We were very pleased to note that we have made solid progress in meeting our commitments and feel confident that our ongoing transformation strategy and shared value agenda will continue to deliver results.”

Illovo employs 29 663 people, but the report estimated a further 71 443 jobs created in outgrower communities and wider multiplier effects. This supports the livelihoods of 139 000 people across the six countries.

“The supply chain includes 11 397 small-scale outgrower farmers, as part of the smallholder development projects. Illovo has increased its strategic focus on outgrowers through a new ‘optimise outgrower’ agriculture scheme. Illovo is developing a strategic action plan for each country on outgrower development aimed at improving outgrower livelihoods while also securing future cane supply.

On land rights, Illovo is training land champions and working with identified community support organisations in each country that assist in mobilising and building the capacity of the communities surrounding the operations to be able to openly engage with Illovo about land.

“We are working with Landesa, an international nongovernmental organisation specialising in land and land rights, to build our capacity to implement our ‘Land Guidelines and Roadmap’, as well as to build local organisations’ capacity around Illovo’s estates to help deal with issues concerning land rights,” he added.

Additionally, the company provided technical, financial and capacity-building support worth R48.9-million in 2016/17 to train its employees.

Renewable sources, primarily bagasse, provide 86% of Illovo Sugar Africa’s energy and 66% of all water used is cleaned and returned to its source.

“Illovo Sugar Africa has also assisted in the development of the Sustainable Sugar Farm Management System, which aims to integrate environmental, social and economic considerations into sugarcane cultivation. This has been rolled out across our operations,” Dalgleish said.