Q: AECI speaks of its enterprise and supplier development (ESD) programmes as resting on specific pillars. What are they?
A: Social impact is a strategic priority for the group’s ESD. Localisation and preferential procurement are key vehicles we use to deliver that impact. Through these, we work hard to enhance the sustainability of our supply chain with the added benefit of improving our BEE contributor rating. AECI is currently a Level 3 contributor.

Q: Regarding ESD, which industries is the company involved in?
A: In 2017, we explored the transport and construction industries and, more recently, we embarked on a special programme targeting emerging farmers, engineering suppliers and chemical manufacturing businesses.

The focus on emerging farmers is aligned with our sustainability goal of delivering better food systems to address the critical need for food security and SA’s national growth agenda. A three-year pilot project, in which AECI Plant Health played a pivotal role, served as a catalyst and framework in the programme’s structure.

Q: Why has AECI focused so strongly on agriculture?
A: Agriculture is an important contributor to growing economies, and AECI has a lot of value to add through its products, as well as its people’s know-how and experience.

The Africa Institute for Policy Analysis and Economic Integration has identified this sector as a primary engine for growth and development because of the linkages with the secondary and tertiary sectors. In general, these sectors purchase raw materials from the agricultural sector which, in turn, buys intermediate or finished products and services from them. Grain SA, which provides strategic support and services to SA grain producers to ensure sustainability, estimates that a 1% GDP contribution from agriculture produces a 2% increase in a country’s growth. It also estimates that investment of R1 million in agriculture may generate twice as many jobs as the equivalent investment in manufacturing.

Q: How many emerging farmers are involved in AECI’s agriculture projects?
A: Four emerging farmers are currently benefiting from our ESD programme, namely Raletjana Farming, Farmers Hope, HempVest and Ithuba. Together, they employ more than 200 people (permanent and/or seasonal) working on more than 3 000 ha in Gauteng, Mpumalanga and North West.

Q: What are some of the salient lessons AECI has learnt from its agriculture programme?
A: The agriculture industry has a remarkable number of talented SMEs with the potential to develop, grow and become significant industry players. Market access is easier in the informal environment; however, many farmers struggle to supply the formal markets as their production capacity increases.

A notable challenge is the need to increase output so that prices per unit allow them to compete in the formal market. To help address this we provide assistance on business fundamentals such as financial management and marketing, together with mentorship as the businesses mature. This is further augmented by solid technical and commercial expertise from the AECI business counterparts.

Q: Besides emerging farmers, how many other SMEs are part of AECI’s ESD programmes?
A: To date, AECI has contributed to the growth of more than 90 businesses in nine industries. These industries are mostly aligned with AECI’s four strategic business pillars – mining, water, agri health and chemicals (including road construction).

Q: What consultation services does AECI provide?
A: We choose SMEs that are closely aligned with our business and its value chains so that the advice, support and mentorship we provide can have maximum impact. We believe that when our people act as sponsors, they can provide genuine expertise and guidance.

In agriculture, the foundation phase of our journey was essential to framing what became a fully fledged programme. Our enabling ecosystem includes technical support from relevant AECI functions, finance from the AECI Good Chemistry Fund, input from other funders, development of market-access opportunities (for instance, the Khula! app) and business-development support. The intervention plans are based on the individual needs of each beneficiary.

Q: Involving SMEs in a corporate’s supply chain has been singled out as a key factor in small-business support. What does AECI do in this regard?
A: We have directed a great deal of effort towards the diversification of our supply chain, with a focus on small, black-owned and womenowned/managed businesses, an integral part of the selection process. Our intent is to drive an inclusive supply chain guided by an ESD policy that is supported by clear guidelines for implementation. Our businesses act as project sponsors to promote the successful development of SMEs by providing mentorship and regular feedback through supplier-relationship management meetings. We consistently analyse our spend to identify supply chain focus areas for new SMEs.

Q: How important is local SME spend to AECI?
A: Our ESD support targets a wider spread of beneficiaries because we know our sustainability and performance are intricately tied with the diversity of the countries in which we operate. To this end, we have concentrated on ensuring we procure from local sources whenever possible and practical to do so. To date, the AECI group as a whole has spent an average of 20% of its total cumulative procurement spend on local suppliers. We have a presence in 23 countries on six continents.

Q: The company has set sustainability benchmarks for 2025. What progress has been made?
A: In 2021 we solidified zero harm to people and the environment and sustainability as one of three strategic platforms in AECI’s growth strategy. Our vision is to deliver sustainable solutions for a better world through innovation and excellence founded on good chemistry. This is the purpose of One AECI, for a better world, and drives who we are and everything we do.

Key focus areas are the significant opportunities we have to deliver better mining, better water, better food systems and better chemistry in collaboration with our customers and other partners. We will do this responsibly and safely from the point of view of our impact on people and the environment.

Our sustainability strategy is fundamental to the growth strategy as a whole, and includes a sustainability framework that, in turn, details our goals. Detailed dashboards measure progress against our goals on an ongoing basis and this is reflected in the ESG scorecard. The initial time frame for achievement of the goals and targets set is 2025. In some areas the group is ahead of this schedule in terms of progress. Examples include decreasing potable-water consumption, and lower Scope 1 and Scope 2 emissions. Others, such as energy from renewables, are longer term in nature, and action plans or baseline data have been developed as required.

ESD development and ESD local-community spend are two social indicators in the ESG scorecard where progress has been made and, with sustained focus, achievement of the 2025 targets will be possible.

Q: AECI has acquired an equity stake in the Khula! app. Why? And how does this investment dovetail with the company’s ESD projects?
A: We acquired an equity stake in the Khula! app in 2020 and, as a result, have exclusive rights for plant-health products and support services in Southern Africa. The app benefits emerging farmers by giving them access to a tool that helps them grow and sell their produce commercially. It delivers value in three key functions.

First is input marketplace, where emerging farmers buy more than 5 000 products from leading national and international suppliers at competitive prices. These products are collected from an AECI Plant Health depot near the farmers or delivered directly to their farms. There is also access to advisory services and spray programmes. Then there’s the fresh produce marketplace, where emerging farmers sell their produce to major off-takers and supply chains, such as hotels, restaurants and shops.

Thirdly is the funder dashboard, where funders allocate grants and/or loans to selected emerging farmers, depositing funds through the Khula! app for drawdown. We aim to have 50 000 farmers registered on the app by 2025.

By Patrick Farrell