Illovo - Socio-Economic Impact Report 2014/15 - page 2

This report covers the material socio-economic impacts of Illovo Sugar Limited and its subsidiaries and
its assessment of the expectations and aspirations of its internal and external stakeholders, which are
dealt with under the following headings in this report. These encompass the group’s significant positive
influences at the macro socio-economic level in the countries in which we operate through to the direct
impacts of our business activities in the communities which surround our operations.
We also identify the ways in which we have responded to issues of concern raised through engagement
with our stakeholders and which influence their assessment of the company. These include initiatives,
both within and outside the company, including the continuous review of our codes of conduct, policies
and procedures, in relation to human rights issues, ethical supply chain relations, our contribution to the
local economies and capacity development at community level.
As Africa’s largest sugar producer, with agricultural and manufacturing operations in six countries in
Africa, certain of which rank amongst the world’s least developed countries, facing considerable
challenges in the form of poverty, unemployment, inequality and disease, Illovo remains conscious of the
social and economic obligations associated with an organisation of its size, particularly given the rural
location of its operations and the challenges faced by communities in those areas.
The pillars of Illovo’s Strategic Intent and its sustainability model in relation to its socio-economic impact
are its commitments:
to be welcomed in the communities in which it operates without whose co-operation we would not
be able to sustain our business; and
to be cognisant of the rural locations of the group’s operations and the impact that it has on job
creation and poverty alleviation in such areas.
We are mindful that the prosperity and sustainability of our business is intertwined with the well-being
and advancement of the communities around our operations. In addition to creating valuable jobs and
economic opportunities in these rural communities and helping to preserve the long-term sustainability
and competitiveness of the sugar industry in the region, we also provide a range of essential health,
welfare and other support services to the communities, over and above the usual costs of operation.
The group impacts a wide range of stakeholders in the countries in which it operates, both in the local
communities and wider national economies, through three main channels, which also inform the process
by which we identify and prioritise the stakeholders with whom we engage and our stakeholder
engagement process:
Direct impacts, which include the wages, salaries and other employment benefits paid to our
workers, health and educational benefits, as well as investments, tax payments, shareholder
dividends and distributions. The provision of direct and indirect employment in areas where very
few other opportunities exist increases the economic security of people in rural areas, helping to
preserve rural communities in countries where rural to urban migration is often high;
Indirect impacts in our value chain in Africa by Illovo’s inclusive business model, through
purchasing sugar cane from farmers, payments to suppliers and distributors, as well as impacts
on those selling Illovo products or using them in their businesses. In addition to the positive
contribution it makes through its local procurement practices, and in South Africa through
preferential procurement (in accordance with the country’s broad based black economic
empowerment (B-BBEE) codes), the re-spending of the money received from Illovo generates
further economic activity and employment;
Induced impacts, through spending by the direct and indirect employment provided by Illovo’s
operations, leading to increased consumption and employment elsewhere in the economy and by
the “crowding-in” effect of businesses and development partners brought about by Illovo’s
investments in rural areas.
SOCIO-ECONOMIC IMPACT REPORT
2014/15
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