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Industrial Raw Materials, Ag Logistics and Infrastructure – Capitals snapshot

Manufactured: Owendo International Port, Gabon

  • Managed by Gabon Special Economic Zone (GSEZ) SA1, the new multi-purpose port will become a leading export-import thoroughfare for West and Central Africa. With 2 berths and palm oil tanks, fuel storage and grain silos, it can handle the loading and unloading of several bulk cargo Panamax vessels simultaneously. The technology, innovation and sustainability vision behind the construction were recognised by the Africa Investments Forum & Awards with GSEZ winning the best African project in the Port and Airport Infrastructure category.

Manufactured: Australia Cotton team unlocks Financial Capital with Joint Ventures, and invests in construction

  • A Joint Venture between subsidiary Queensland Cotton and Rural Funds Management (RFM) marks the entry into upstream cotton growing in Australia. Lynora Downs currently has over 740 ha of irrigated cotton, 1,200 ha of dryland cotton, as well as hectarage for wheat and chickpea crop rotation. Irrigation water is sourced from natural overland flow and stored in ‘cells’. All cotton will be ginned at Olam’s Moura Gin.
  • On 1 March 2017, Queensland Cotton and Evolution Ginning commenced a new venture for the joint operation of the Mungindi Gin. Evolution has significant cotton growers, bringing deep local knowledge as well as cotton volumes.
  • New 24/7 warehousing facilities at the Dalby and Cecil Plains Gin sites have a combined footprint of over 20,000 m2 and can store 150,000 bales. The expansion leverages existing assets, removes reliance on external handlers, and offers existing staff development opportunities. This initiative is expected to deliver significant bale storage and handling cost savings, and create a highly efficient Gin to Port supply chain.

Intellectual: Increasing the long-term economic value of rubber trees through new tool

  • A new precision, mechanised rubber tapping tool is being developed by Olam in collaboration with Mechanovation Sdn Bhd and Detroit Engineered Products that will automate the delicate process to release latex without damaging the tree. Using a cambium sensor it reduces reliance on highly-skilled labour while simultaneously increasing productivity.

Human: Constant focus on safety in rubber plantations

  • A stringent Health & Safety mindset is a relatively new concept to workers in the Gabon rubber and palm plantations who come from the surrounding villages. Constant vigilance and awareness training are required. Tragically, one fatality was recorded at the Bitam rubber plantation due to transportation. A trainer dedicated to providing defensive driving courses and implementing road safety management has been recruited. A revised road policy is reinforced by set speed limits, speed limiters on Olam and contractor vehicles, random speed checks and alcohol screening, and more road safety signage.

Social: Linking communities to financial and healthcare services

  • Rubber processing subsidiary SAIC (Société AgroIndustrielle de la Comoe) in Côte d’Ivoire is helping smallholders access bank loans. Banks were hesitant as most crop payments were made by processors in cash, and transactions could not be tracked. With SAIC helping to maintain accounts in microfinance cooperatives, banks are now able to estimate the required transaction, enabling farmers to secure loans. Over the course of 2016 and 2017, more than 2,000 rubber growers working with SAIC gained their first bank accounts, encouraging farmer loyalty.
  • In the Republic of Congo, subsidiary Congolaise Industrielle des Bois (CIB) successfully renewed FSC® certification2 for 1.3 million hectares (ha). The team is working towards certification of the most recent concession of 671,000 ha.

1. Joint Venture between Olam, Republic of Gabon and Africa Finance Corporation (AFC) 40.5:38.5:21
2. Licence numbers: CIB Kabo – FSC-C128941; CIB Pokola – FSC- C014998: CIB Loundoungo – FSC – C104637

  • CIB is the largest employer in the region (994 people), and the only major provider of healthcare across approximately 20,000 km² with 58,000 people, the vast majority living in poor villages or as semi-nomadic tribes. CIB operates a 42 bed hospital and another 36 beds across 4 rural clinics. Both chronic and infectious diseases are rife in this area and, in 2017, over 21,500 patients were treated who were not CIB employees.
  • In 2016, the CIB doctor, with an NGO healthcare project, travelled to a remote group of villages, previously only accessible by canoe, along a road just built by CIB at the villages’ request. During this trip, the medical team treated many children for malaria and malnutrition. The CIB medical team returned a few weeks later and many more children and adults were treated by the medical team with some being evacuated to the CIB hospital. Tragically, there were still many deaths.
  • In August 2017, two Congolese NGOs (OCDH and RENAPAC) issued a report stating that the road building itself had caused an increase in malaria, which in turn caused high child mortality.
  • To investigate the allegations CIB requested advice from the NGO The Malaria Consortium. On their recommendation an independent tropical disease specialist was commissioned. The report findings show:
    • While malaria is endemic in the region it was not the single or main cause of death
    • The final cause was split mainly between dysentery, malaria, pneumonia and measles
    • The road was assessed to have not made a relevant impact on the breeding of malarial mosquitoes due to the surrounding marsh (flooded forest) landscape which provided enormous permanent breeding ground potential for the mosquitos.
    • These villages are affected by immense poverty, malnutrition and many negative social factors, facilitating the spread of deadly diseases. The deep, systemic healthcare issues underpinning this tragedy cannot be solved by any one party acting alone and it will require a renewed focus on effective delivery of healthcare for the region. In this, CIB will continue to work with the Government, national and international NGOs, and experts to find a durable solution to help communities living in the forest.

Natural: Supporting development of a Sustainable Natural Rubber Standard to reduce deforestation

  • Similar to other smallholder crops, rubber is also facing questions on deforestation, community and labour rights. As yet, there is no industrywide platform for stakeholders addressing these issues and therefore there lacks a common understanding of “sustainable rubber.”
  • Olam has been working with major tyre manufacturers, producers and civil society like the Sustainable Agriculture Network (SAN), Global Witness, Birdlife International, Rainforest Alliance, Proforest and others on a white paper to develop a Sustainable Natural Rubber Standard. A risk-based rather than rule based certification approach is recommended. The NGO Nepcon explains: “It allows the greatest level of effort to be placed on the areas with the highest risks. A conventional approach to certification, on the other hand, requires effort to be put into all the listed requirements, no matter whether they pose a significant risk to company in question or not. A risk-based approach would ultimately make certification viable for smallholders and small-scale farmers. It would enable certification to drive positive changes in areas where there is need for change, without exposing smallholders to the high costs of a conventional certification process.”