Illovo Sugar Malawi has disclosed plans to localise the sourcing of its packaging material, and has since awarded contracts to supply packaging materials for its pre-pack and bulk sugar to local companies.
The company’s Country Director Lekani Katandula, in a statement issued on October 1, 2021, said this is one of the many ways in which the company continues to contribute to the economy.
Katandula said sourcing of packaging materials locally is a major move towards developing local businesses as well as contributing towards local job creation.
“The contracts awarded ensure that not only our direct suppliers benefit, but also all those within the packaging supply chain in support of fulfilling this order,” he said.
He added that the contracts, which were awarded through this localization process, are worth over K6 billion per annum and will run for three years, subject to renewal.
The Illovo Sugar Malawi chief stated that while most of the input materials are imported into Malawi, the cost of local conversion is often more competitive resulting in a more attractive solution than importing the final products.
“Our sourcing strategies together with comprehensive local supplier engagement have ensured that packaging prices are fair and market related,” said Katandula.
It is expected that the contracts will also benefit the local suppliers in securing additional funds to invest in better and bigger manufacturing infrastructure for production of high quality packaging materials not only for Illovo, but for their other local as well as export custormers.
Illovo Sugar Malawi has expressed commitment to working with local packaging suppliers who demonstrate potential and are keen to work jointly with Illovo on this journey towards high quality and sustainable packaging.
The company hopes to enter into longer term agreements with the suppliers so that we can work together on significant projects that will provide sustainable packaging solutions while reducing total supply chain costs.
“Local suppliers are already familiar with the local laws and the projects aimed at reducing the impact of packaging to the environment. They are therefore well placed to assist Illovo in developing appropriate sustainable solutions locally,” Katandula said, adding that the opportunities created are also in line with the company’s “Creating Thriving Communities” strategic purpose.
He stated that sourcing of packaging materials from local suppliers is a true reflection of our commitment towards creating a thriving Malawian community, as the contracts given will not only directly benefit the suppliers, but also all those within the packaging supply chain in support of fulfilling the contracts.
“The additional disposable income that has been created will also used to support the supply chain player’s families and enhance economic growth within their respective communities,” stressed Katandula.
Illovo Sugar (Malawi) plc is listed on the Malawi Stock Exchange with 76 percent of the issued share capital held by the Illovo group and the balance by public and other institutional investors.
The corporate office is based at Limbe with two operations at Nchalo in the south of Malawi and Dwangwa in the mid-central region, producing sugar cane and raw and refined sugar, together with specialty sugars at Nchalo. Illovo Malawi is the country’s sole sugar producer with more than 60% of total sugar sales sold to domestic consumer and industrial markets, and the balance exported to preferential markets in the EU and the USA, and the surrounding region.
In Malawi, as in Illovo’s other countries of operation except for South Africa, the agricultural operations are significantly enhanced by several factors, including access to secure water sources for irrigation, excellent soils, and ideal climatic conditions to promote optimum cane growth.
Combined, these attributes result in high yielding sugar cane crops, which are harvested annually.Follow and Subscribe Nyasa TV :