Thursday, September 4, 2008

Shire Valley Minus Illovo Equals Impossible

How important are big companies to a country? The example of Illovo’s citizenship in the Shire Valley shows Malawi needs big investments. Here is the story.

The sugar starts at Kamuzu Bridge in Chikwawa. The roadblock and police shelter were donated by Illovo Sugar (Malawi) Limited whose corporate colours welcome road users on M1 to the Shire Valley.

The Illovo colours have two meanings: one, that you are entering an Illovo zone, which is true, of course; and, two, that the company is not for profit only. It has a social responsibility towards communities near its estates and the country as a whole.

Chikwawa is some 30 kilometres from Nchalo and the roadblock is a powerful notice of the Illovo zone because not long from here, the M1Road passes through sugarcane estates, green carpets that stretch hundreds of hectares. These are estates of Illovo, the country’s sole sugar producer with agricultural and milling assets at Nchalo and Dwangwa in Nkhotakota, and headquarters in Limbe, Blantyre.

Illovo’s strategy is clear: “To be welcomed in communities in which it operates because of what it does, how well it does it and be accepted as a progressive company by all communities.”

What would life have been in the Shire Valley without Illovo? “It would have been impossible,” says Frank Phiri, managing director of Mukukha Enterprises, a cane cutting contractor.

Phiri’s response is a fair assessment of the impact of Illovo on communities in the Shire Valley. The sugar company is sweetening people’s lives from business to health to agriculture. Illovo has one main clinic and six satellite clinics at Nchalo.

Dr Albert Mkumbwa is in charge of health services at Nchalo and has statistics at his lips. This is so because he spends one hour per clinic per week, meaning, people who use these clinics have access to a doctor. (Some districts in Malawi do not have doctors and the best people can get is an experienced clinical officer who turns out to be district health officer, positions reserved for doctors.)

“Our clinics serve between 35,000 and 40,000 people,” said
Mkumbwa. “We are also working together with Montfort [Mission Hospital] where we send clinicians once in a while.”

Illovo clinics at Nchalo are offering almost all services required of a district hospital in Malawi except for radiography. When there is need for such services, clients are sent to Montfort or Blantyre, in case Montfort does not have appropriate machines.

But the common problems like malaria, diarrhea and AIDS are handled at Nchalo. All staff members and their dependants get free services and Illovo is the largest single employer in Malawi with 5,500 permanent staff and offering 2,500 seasonal jobs.

Beyond this, services like cane cutting and weeding are outsourced from contractors and employees from such firms get free treatment from Illovo clinics which offer testing and counseling and CD 4 count. White blood cells are monitored and ARVs offered to those in need. As at now, the clinic has 575 people on its ARV programme. Of these, 176 are employees while 399 are dependants.

“We have ARV stocks to last for the next two years,” said Mkumbwa, pointing to cartons of the drug. Illovo clinics hold two HIV testing weeks every year, first during the July national week and, secondly, Illovo’s own week in December after World Aids Day.

“In July last year, we tested 881 people while in December we tested 939 people,” said Mkumbwa.

The main clinic at Nchalo is smart. The corridors are not filled with drug and detergent smells. People sit on clean benches, the floor is well mopped, almost always. Staff work throughout the day and there are a couple of staff members at night to attend to emergencies.

There is a morgue that can keep six bodies for as long as two weeks. The mortuary at Chikwawa District Hospital has no freezing equipment. It is simply air conditioned and can keep bodies for hours otherwise they would decompose.

On the Wednesday I visited the clinic, the body of Senior Chief Ngabu’s mother was in the mortuary of the Illovo Clinic. This confirmed the usefulness of Illovo to people of Shire Valley because the chief lives some 20 kilometres from Nchalo on the road to Nsanje.

Illovo is not in treatment only but also in primary health care, especially prevention. There is a public health office headed by Anaclet Lupiya, a product of the University of Malawi’s Environmental Health (EH) programme, running prevention initiatives on malaria and HIV, among others.

But not all people can come to Illovo clinics because not all are employees or dependants of Illovo staff. People from surrounding communities go to Montfort Hospital, a 120-bed Catholic Church institution within Nchalo Trading Centre.

Dr Symon Chiumia is medical officer for the hospital and he is here because his salary is sugar-coated by Illovo. The company also tops up salaries of hospital administrator and radiographer. Graduates from the College of Medicine often avoid Chikwawa and Nsanje and those working at Illovo and Montfort are often the only doctors in the districts.

“We have a good working relationship with Illovo,” said Chiumia. Illovo provides drugs valued at K135,000 to Montfort Hospital quarterly.

Illovo renovated the hospital’s labour ward, the radiography section and bought a new radiography machine and air conditioners to keep the rooms cool. Illovo supplies raw water to the hospital. This list is not yet over.

Illovo donated an X-ray machine valued at K3 million. Illovo renovated the X-ray room. Illovo donated air conditioners for a second doctor’s house. Illovo donated a laundry machine for the hospital. Illovo maintained the hospital’s laboratory. Illovo bought a new water pump when the old one was burnt down.

In short, Montfort Hospital lives on Illovo to a reasonable extent. The existence of the hospital at current standards would be almost impossible without Illovo. The mission hospital serves thousands of villagers who pay negligible fees.

“Illovo,” says the company’s guidance on social responsibility, “endeavours to coexist harmoniously with its surrounding communities by, among other things, operating a social responsibility fund which is used to support hospitals, schools, orphanages, donations to some important government and religious functions, HIV support groups, road and bridge maintenance mainly but not exclusively in communities surrounding the estates.”

After health care, so what? Illovo, it’s becoming clear, realises that an effective workforce comes from a pool of health people.

Nchalo estates and mills are the largest employer in Shire Valley, perhaps in Southern Region. Is there a bigger employer than Illovo? In addition, contractors that offer services to Illovo employ hundreds of people.

Unitrans Malawi Limited is Illovo’s biggest transport provider, moving 1.4 million tonnes of cargo a year. Unitrans employees between 700 and 800 people during sugarcane season which starts in April and ends in November. Piet Steyn is transport manager at Nchalo and knows well what Illovo has done to transporters. Illovo, he said, is a big customer and this is not the case with Unitrans only.

Farming and Engineering Services is also stationed at Nchalo to maintain Illovo fleet and machinery. The company, according to national services manager Nark Gallowey, employs 14 men and one woman at Nchalo.

Builders and carpenters are enjoying contracts from Illovo. Harry Amos is part of Tonse Building Contractors while Noel Chapola runs Umodzi Joinery Workshop. Both and their partners are earning a living from Illovo contracts.

Illovo, in case you didn’t know, once grew maize and government used the yield for seeds which were donated to poor families across the country as starter packs. The company is involved in afforestation as well and is leading by example.

But it is Frank Phiri of Mukukha Enterprises who is a typical example of Illovo’s impact on Shire Valley and Malawi. He is a product of Bunda College and worked with Illovo for 26 years from 1979, until he resigned after winning a five-year cane harvesting contract. He has done four years and hopes the contract will be renewed.

“Outsourcing is empowering people,” he said. “When I was an employee, I was contributing taxes to government but not that much. Now, I return taxes in excess of K4 million a year.” His firm employs about 500 people every harvesting season.

There are several townships and villages around Nchalo estates and Kalulu is one of them. Years ago, people had an open ground market. They were scorched by Shire Valley’s hot sun. Temperatures in Chikwawa and Nsanje reach 42 degrees Celsius at the peak of the dry season. People at the market suffered from rains as well.

Now Illovo constructed a market, fenced with brick walls. What is more? The company supplies water to the market. This is possible because Illovo has 11 water treatment plants at Nchalo.

John Falamenga is an operator at one water plant. He treats 380 cubic metres of water a day and hundreds benefit. Ndirande Village is by the water tank and people from here drink from taps outside the plant. If it were not for Illovo, people would have been drinking from Shire River, a couple of kilometres away, and risking their lives to crocodiles and unclean water.

The greatest news in Shire Valley is about Kasinthula cane growers limited where lives are changing, people are moving from poverty to wealth and learning to live decent lives. One challenge in the Shire Valley is that people have wealth—cattle and money—but still live like poor people.

The trust is changing all that. It has 282 farmers who produce 76,000 tonnes of sugarcane per year. The farmers have a ready market at Illovo. The company helps the farmers with procurement of inputs and, being big, has bargaining power.

“The main benefit of the farmers is that the scheme provides a ready market,” said Brian Namata, general manager of Kasinthula cane growers limited. The processes of how the farmers sell their sugarcane and get their money are all interesting. But the visible signs of the changes of their lives are even more interesting.

Chinangwa Village, some five kilometres from Chikwawa boma, is a shining example seen clearly through Bies Ellod, a 26-year-old man who has two-and-a-half hectares of sugarcane. His wife and son of two years, seven months were not at home when I visited them recently.

Ellod and his wife have built a three-bedroom house with a big sitting room, a kitchen and storeroom. It is a house that would fetch about K30,000 in Chimwankhunda Dam in Blantyre or Area 25 B in Lilongwe.

Wiring was done and the house is ready for electricity. In fact, Chinangwa Village has electricity almost ready. Most houses are just waiting for Escom. Power lines are all over the village. Escom is yet to procure metres.

The village has been transformed and thanks to sugarcane farming. Beyond that, the changes are because of Illovo. People of Shire Valley have been engaged in business and it is more profitable than growing cotton. The cane growers are assured of a minimum price that covers production costs and profit. It is called fair trade.

On the day Escom brings metres to Chinangwa Village and connects people to power, there shall be celebration. Ellod’s wife will no longer need firewood. She will cook using a hotplate. This will not only make her life easy, but forests will be saved; trees that are not there, anyway. Children will study at night and, most likely, school results will improve.

Electricity is just a plus because they already have borehole water and a clinic that is partly, perhaps mainly, serviced by Kasinthula cane growers limited.

This will be a model village, a real show how a socially responsible company like Illovo can transform lives. These are lives at national level because the company is the biggest single employer and works in a way that impacts directly on people.

Yet there is more than this. One major impact of Illovo on Shire Valley—Illovo management does not realise this, though—is that the high living standards of the staff at Nchalo are a motivation to the area’s young people.

The pupils and students of Nsanje, especially Chikwawa, see immediate benefits of education as they see men and women drive poshy cars to Blantyre and around Chikwawa and Nsanje. They see how people can turn sugarcane into sugar and this amazement encourages them—most of them—to work hard in school.

No wonder the Shire Valley has produced people like Bernad Thole, a chemist and dean of applied studies in the University of Malawi. This motivation is especially important in a country where musicians sing against higher education, where people think all educated people must be rich.

Illovo is most likely Escom’s biggest customer. The work at Nchalo makes this assumption believable even without checking with Escom. In an interview Escom’s public relations assistant Chikondi Chimala confirmed that Illovo is not only the biggest customer but also a responsible one; the company does production at night and thus does not congest Escom power distribution which is high during the day.

This means big companies get big companies and that if a country has several big, responsible companies, life would really change for the better in visible ways.

But there are challenges: more businesses mean more money in people’s pockets, including children’s pockets. As a result, they may not go to school. Money tends to prevent people from thinking and, in such circumstances, the spread of HIV rises. These are challenges at personal level. Illovo cannot follow people into dark corners.

Perhaps we need patience. Some day, Malawi shall be a fully developed country. It takes time. It also takes the efforts of the private sector and government to lift people from poverty.

Illovo is clear evidence. The sugar group is sweetening food and lives of Malawians, especially those in Chikwawa and Nsanje. The roadblock at Chikwawa is just an entry point into a great story, now told, in part though.

1 comment:


While I agree that Illovo is playing a great role in the country's development, I feel it is also impacting negatively on the country's food security through its expansionist strategies. The company is acquiring vast areas of land in Nkhota-kota District for its sugar cane production at the expense of rice production. I fear this will have negative consequences to the very livelihood of people in the district. I love your eye opening articles, man. Wishing you all the best and happy new year.