Through its network of farmers, plantations and processing factories, Société Africaine de Plantations d’Hévéas (SAPH) is putting Côte d’Ivoire on the global rubber producing map, activity which is providing crucial incomes for communities across the country.
THE RUBBER REVITALISER
Vulcanised rubber, as with many inventions, was created by accident.
In 1839 American inventor Charles Goodyear accidentally dropped some natural rubber mixed with sulphur on a hot stove, and so discovered vulcanisation, the chemical process by which the physical properties of natural rubber are improved.
Goodyear, whose name inspired the well-known tyre manufacturer, had stumbled across a game-changing discovery, one which has aided the development of an industry now worth $30 billion a year.
But while many companies made millions from his invention, he suffered for it. Not only did Goodyear have to fight numerous patent infringements in the courts, he was imprisoned in 1855 for debt in Paris and died with arrears of $200,000.
Today, the natural rubber industry serves as a critical socioeconomic enabler in West Africa, especially in Côte d’Ivoire, which is the world’s fourth largest rubber producing nation, recording 780,000 tonnes of production in 2019.
It is also a historically volatile industry, with the majority of natural rubber produced being sold to tyre manufacturers who appreciate its hysteresis, or capacity to diffuse heat, compared to synthetic counterparts.
Prices are currently still low, but the Ivorian industry is starting to blossom at the right time – indeed, some 900,000 tonnes of natural rubber are expected to be produced during the course of 2020, a significant jump on last year’s output.
And not only is it an economic stimulator. Beyond this the sector also serves a wide-reaching, sustainable purpose.
“Natural rubber is a fascinating industry,” comments Marc Génot, General Manager of Société Africaine de Plantations d’Hévéas (SAPH). “Planting and maintaining trees, working with farmers, building and operating factories in rural areas are challenging, but very rewarding activities.
“But it goes beyond that – in plantations, we have a huge diversity of jobs and expertise. We plan, build and maintain roads, villages, hospitals, guesthouses and restaurants, treat water and effluents, collect and sort garbage, compost, recycle and create a circular economy on plastic waste, and extract and sell wood and woodchips from our old trees. Natural rubber is green and getting greener.”
Génot has been involved in the trade since 2004, the Frenchman initially moving to West Africa in 1986 before transferring to SAPH in 2011.
The company is Cote d’Ivoire’s largest natural rubber manufacturer, producing 187,000 tonnes in 2019.
Its main activities involve operating industrial plantations, purchasing rubber from and providing technical assistance to tens of thousands of Ivorian farmers, and processing said rubber from its five factories which provide work for around 1,400 people.
Génot is hoping to reach an output of 225,000 tonnes this year, a goal which is achievable thanks to renewed investment in plantations and processing facilities in recent years.
“We are constantly improving our plantations,” he adds. “These were initially planted between the 1960s and the 1980s, so they are in need of renewal, and we replant between 800 and 1,000 hectares a year with the finest planting material and best planting techniques.
“Our goal is to obtain the best plantations possible, with fast growth and excellent density and homogeneity. The development of those techniques was a challenge, but it is now mastered.
“We have also invested a lot in our factories in the last six years and were able to double our capacity on existing sites with state-of-the-art equipment.
“In Bongo and Rapides-Grah, we built two of the three largest rubber factories in Africa, and we are currently preparing the construction of a new factory in the western part of the country to take advantage of the fast-growing farmers’ production.”
SAPH’s recent growth and development has not been without challenges, however. The aforementioned volatility continues to create a degree of uncertainty, and prices have stayed relatively low since 2014 when it became clear that agricultural production outstripped demand.
For Génot and SAPH, it is therefore crucial to mitigate this uncertainty as much as possible for the betterment of its stakeholders, from employees and industrial clients to farmers and other suppliers.
Farmers, for example, provide some 85 percent of the raw materials processed by the company. Ensuring their operations are sustainable both environmentally and financially is therefore paramount, and a core focus for the General Manager and his team.
“It is very important for us as a member of the Global Platform for Sustainable Natural Rubber, and for our customers, that our farmers work in a sustainable manner,” he explains.
“The first issue is that their farms must be profitable and productive enough in order to reduce land pressure. This is the reason why we are so involved in technical assistance, which is not a margin generating business for us. We are going further by investing into programmes which make sure that the social and environmental impacts of their activities are under control.”
Génot also highlights how key customer Michelin has been supporting SAPH through its Rubberway application.
This enables the organisation to identify major sustainability challenges in the rubber supply chain, issues which are then addressed through the creation of policies, which in turn are relayed to farmers via various associations who represent their interests.
As well as farmers, SAPH invests significantly in the wellbeing and development of its own personnel.
A yearly training programme covering technical and managerial skills is based on the needs identified by individual departments within the business, while various management tools also help to improve performance and maintain healthy relations between SAPH leadership and a motivated workforce.
“We are also committed to the fight against discrimination and for gender balance in an industry which is traditionally male dominated,” adds Génot. “We welcome diversity in our workforce and try to find the optimum mix between external recruitment and internal promotion.”
The General Manager also highlights important work which looks out for the welfare of both employees and the wider community.
For example, since 2006 SAPH has been actively running an initiative to combat AIDS, including a mother and child programme which has proven to be tremendously successful. This is shown by a prevalence rate of 0.45 percent, well below the national average of 2.7 percent, with just three HIV positive births from 141 HIV positive pregnancies since 2011.
Health is just one of several key development areas SAPH focusses on with its community work, the others being education and culture, the environment, and sport.
Much of these efforts are channelled into investment in basic social infrastructure such as schools, medical centres, water adduction and canteens.
Other programmes focus on developing entrepreneurial skills through the support of agricultural training for young community members and women’s associations, activities which will help these groups start their own agribusinesses. In the area of environmental protection, SAPH continues to preserve forests on its lands and has 520 hectares safeguarded at present.
“Because we maintain plantations on large tracts of land, we need to deal very responsibly with the neighbouring communities,” says Génot.
“SAPH has been engaged in our parent SIFCA Group’s Sustainable Development Policy since 2007, placing people and environment at the heart of its concerns. As a corporate citizen and responsible company, SAPH contributes to the development of the regions that host it.
“To this end, we are proud to continue setting up socioeconomic initiatives aimed at improving the living and working conditions of our employees and the surrounding communities.”
Such programmes as those already described are planned and actioned with careful consultation from the local people themselves, the idea being that they take full ownership of projects with SAPH providing the resources required to get them off the ground.
And such cohesion, whether it be with communities or within SAPH and its supply chain, is going to be critical for all parties moving forwards into a sustainable, profitable future.
Indeed, Génot is certainly an optimist when looking ahead to the next chapter in the organisation and wider industry’s development, and with good reason.
According to research presented in a recent company presentation, the natural rubber market looks set for a sustained period of growth. Global production volumes are set to reach more than 17.2 million tonnes by 2030, a rise of 27 percent on 2018, with Côte d’Ivoire estimated to grow output by 47 percent in this time.
Génot concludes: “The world rubber market has been depressed since 2014, as agricultural production grew too fast after an intensive planting episode in previous years. However, we should see the market improve, even if it seems that 2020 may remain low.
“We are also concerned by the present COVID-19 crisis that will probably have dramatic impacts on the one hand for our employees and their families, and on the other hand for our suppliers and customers.
“It will certainly affect production adversely, but we continue to be positive for the longer term and see growth opportunities in terms of volumes with the fast-increasing agricultural production. I also believe price correction is likely to happen in the coming years, and that should give us a much-needed financial rest.”