Olam:The Secrets Of A Company’s CSO Strategy
In Nigeria over the years there have always been battles between host communities and big corporations that are located in their localities.It was however in the oil and gas sectors of our economy that we saw most of these no-good battles-especially in the Niger –Delta part of the country.
But since the entrance of the South African telecom company ,MTN Nigeria into the country over a decade ago many never believed that a foreign firm could really be so good at Corporate Social Responsibility(CSO) that it could even teach the local ones a few tricks in CSO. MTN which employs its foundation and expends about 1% of its profit on CSO now has many imitators who have adopted the same strategy, but experts are worried that the results that are very visible in the activities of MTN foundation doesn’t seem to be replicated by the other companies(copycats)-some of which has been in the country for upwards of 50 years.
Nonetheless another International company founded in Nigeria-Olam International Ltd which operates in the agricultural sector seems to have also created another onbeateable CSO strategy that seems to be working for it; globally speaking, and especially in Nigeria. To showcase this fact in the Nigerian situation is the truism that Olam is involved with farmers in most parts of the country.As it works with rice farmers in the Northern parts, it also works with cocoa farmers of the South-west etc.In fact recently one of its top officials revealed that it has supported Nigerian farmers up to the tune of over N500million.
As the CEO of the Company worldwide,Mr Stephen Verghese disclosed sometimes ago to African Business:Its CSO strategy revolves around what the company describes as ‘livelihood charter’Which he said has “ eight principles on how we can help rural farming communities in the countries that we operate in. We have several programmes under that project”, according to him
Explaining this charter in clear terms Venkatramani Srivathsan, managing director, Africa & Middle East, Olam International Ltd stressed that in their Nigerian operation Olam’s key contributions ‘include: building thriving communities through improving livelihoods; and helping smallholder farmers improve their yields. Therefore their income is integral to our business model as demand from customers grows.
“We therefore provide training in good agricultural practices and in business skills and literacy to farmers. To enable farmers to invest in their farms we provide pre-finance at 0% and supply inputs such as fertilisers and seedlings,”he said
According to him, Olam has many of such initiatives, saying that their flagship is the Olam Livelihood Charter, ‘which focuses on creating not just economic prosperity, but on improving social welfare and safeguarding the environment. In 2013, three programmes in Nigeria – spanning cocoa, cashew and sesame supply chains – achieved flagship OLC status.Significant results from the three programmes in Nigeria include the Rainforest Alliance Cocoa Certification Programme; improving community earnings through direct sourcing and toll processing in Kwara and Oyo states; and the Olam Sustainable Villages Project (OLC).”
Going ahead ,he disclosed that the number of farmers “involved in OLC has increased dramatically from 567 in 2012 to 19,258 in 2013; 15% of OLC farmers are now women; 8911 farms are GPS mapped; 16,690 famers are trained in good agricultural practices, including 3,306 women and 4,355 farmers work on Rainforest Alliance-certified cocoa farms.”Some of these numbers are currently in the upper achelons given noticeable improvements over time.It should be recalled that Olam rice mill in Nigeria is arguably the biggest in Africa.
Even former President Goodluck Jonathan when he visited Olam farm was impressed with its contribution to Nigeria’s progress. And he confessed as much.Said he”I am very pleased to see that OLAM’s rice farm is inclusive of the rural communities, especially women and youths. As we encourage large commercial farms, we will ensure that their development empowers subject communities and protect their land rights, while boosting their shared participation in wealth creation, within their communities.
‘ We must not just stop at farming, but progressively add value to all our agricultural produce, building agricultural value chains, from the farm to the table. The current and planned investment of over $100 million by OLAM, is a very good example of how to build integrated rice value chains, combining commercial rice farms, out-grower schemes of small farmers, and modern rice mills.”
In his reaction at that event the Minister of Agriculture, Dr. Akinwumi Adesina,did not only agree with Mr President but pontificated eloquently that it was a “ clear demonstration that our(Nigeria’s) approach of taking agriculture as a business, while enabling the private sector to drive growth of the agriculture sector, is working.”
Apparently this peace does not aim to compare Nigerian based companies and their capacities in CSO ,but even as we praise the MTN’s of this world for building hospitals,schools and what have you.Its important for one to note the fact that the work that Olam is doing is much more difficult even though its closely allied to its business interest-its bringing development to the grassroots of the nation.Whether you are talking about agric education,provision of fertliser,seedlings,monies,support,rural development Olam is into that game.
At times it even had to help government in the areas of infrastructural development.As its African helmsman revealed about their 10,000 hectares farm in Nassarawa to an international magazine:’In terms of challenges on the ground, poor infrastructure is the most significant issue as it creates bottlenecks and inefficiencies. This issue is common to many of the emerging markets where Olam operates, and the company is well practised in meeting this challenge through the development of roads, warehouses and alternative transport networks. For example, in the area surrounding our rice nucleus in Nasarawa state, we have constructed over 40km of roads to facilitate access and egress at the farm. Lack of skilled workforce is the second big challenge, creating higher costs of managing the business and retaining experts”
As the United Nations Development Programme website testify on the company:”Olam Nigeria Limited, as the country arm of Olam International Limited, is a supplier of raw and processed agricultural commodities. The company’s business portfolio cuts across the total product supply chain from procurement of farm products to distribution, using a network of local buying agents, primary processing facilities and logistics.
“Established in 1989, Olam International sources its products from countries where it operates and sells these products worldwide to over 6,500 customers in 55 end markets. Olam Nigeria directly employs 500 people in its operations and generates 10,000 indirect employments. The company engages smallholder farmers by supplying farm inputs and providing ready markets for their products. Its engagement with rice farmers increased farm earnings per hectare from US$235 to US$1,000”,this is evidently a good testimony for the company.