Illovo Sugar South Africa (Illovo SA), the country’s largest sugar producer, is firmly committed to transformation and building sustainable enterprises, especially in rural communities, Illovo’s operational area.
This is according to Ms Mamongae Mahlare, Illovo Sugar SA’s managing director, and the first black woman to head a major sugar producer in South Africa.
“In the 2017 financial year, Illovo SA’s total economic impact on the local economy was estimated at R9.6 billion; R1.4 billion of this was in direct impacts and the balance from the multiplier effects of its business operations within the supply chain and wider economy,” Ms Mahlare said. This is revealed in a report undertaken by Corporate Citizenship, an independent, global management consultancy specialising in social impact assessment, sustainability and corporate responsibility.
Operating mainly in rural KwaZulu-Natal (KZN), the company provides 3 500 direct jobs, with an estimated seven indirect jobs (per direct job) created through outgrower communities and the multiplier effects through the wider economy. This provides effective support for 25 000 people in rural KZN.
Illovo SA also makes a significant downstream economic contribution working with an estimated 200 000 small retailers who sell Illovo SA products in South Africa.
The company has heeded government’s call to develop black industrialists through the 2004 sale of its stake in the Gledhow sugar mill and refinery, to a broad-based black economic empowerment (BBBEE) company.
Further supporting the economic growth of rural KZN, Illovo SA has been working with the national treasury’s job fund initiative, providing capital for a project to develop 3 000 ha of uncultivated small-scale grower caneland on KZN’s south coast. This project aims to develop communal fields into community owned and operated sugarcane farms. The three-year project has helped generate employment opportunities for communities in farming and secondary activities associated with crop husbandry, crop removal and logistics. The initiative reaches about 2 000 small growers and remits upwards of R68m a year into the rural economy. In areas where the project is implemented, 1 100 jobs will be created.
“While the beneficiary community is the main target group, the wider local community will benefit from the increased economic activity. Agricultural input suppliers will benefit from additional trade and Illovo SA will receive additional cane to strengthen the sugar supply chain,” said Ms Mahlare.
Illovo SA has sold 28 000ha of land to black people, as part of its own land reform and rural economic transformation programme, and as a way of promoting the productivity and sustainability of redistributed land. To date, Illovo SA’s own land redistribution initiative – comprising 55% of its original land portfolio – has facilitated the establishment of more than 50 black commercial farmers.
“We chose to sell much of our land portfolio to emerging black farmers as part of our commitment to the transformation of the sugar industry in South Africa. Our approach is that to positively impact rural communities we have to leverage our know-how to help develop sustainable economic activity in the areas in which we operate,” said Ms Mahlare.
The company also provides extensive technical, financial and capacity-building support to small-scale growers and new entrants to the industry with the intention of seeing them increase their yield. In the 2016/17 financial year, outgrower farmers supplied Illovo SA with about 5 million tons of sugar. – Press release