The history of Feronia’s palm oil business spans over one hundred years’ including decades of economic and social turbulence, conflict and civil unrest.
The plantations were founded by Lever Brothers (which became Unilever) in 1911 as Huileries du Congo Belge (HCB) and went on to become one of the largest private sector employers in Africa, supplying edible oils and agricultural products to local and international markets. At its peak, the company consisted of 11 plantations covering approximately 200,000 hectares. HCB remained in continuous operation in the Congo through the transformation from Belgian rule to independence, changing name several times as a result, and became Plantations et Huileries du Congo S.A (“PHC”) in 1997.
The early years of Lever Brothers' history are well documented and marred by practices typical of European companies operating throughout the world during the colonial era. We do not dismiss the historical issues and believe it is important to understand their legacy in order to build a sustainable, productive and inclusive path forward.
In September 2009, Feronia acquired 76% of PHC from Unilever which consisted of the three plantations we own and operate today. We believe that our commitment to environmental and social sustainability and respect for our workforce and local communities were pivotal factors in Feronia’s successful bid for the Company.
When we acquired the business we believed the Company was substantially over-staffed for the levels of production both in 2009 and for the next several years. However, we made a commitment to PHC that we would not undertake any retrenchment as we believed that the damage caused to the social fabric and the loss of skills and experience within our workforce would far outweigh any cost savings from reducing the headcount. With the benefit of hindsight, we still believe that this was the correct approach.
Since 2009 our overarching development goals have been to secure livelihoods, increase food security and enable broader economic activity through the sustainable rehabilitation and diversification of the plantations.
Find out more information on the history of the plantations here.
The importance of growth in rural DRC
The rehabilitation of any 100 year old business comes with responsibility and challenges. Operating in the DRC, with its recent history and development issues, makes our task even more complex and succeeding even more important.
Between 1996 and 2003, the country endured a period of war and conflict which resulted in millions of deaths, widespread internal migration and extreme poverty. This period also saw severe under investment in, and the gradual decay of, the country’s infrastructure, health, education and job markets.
A transitional government established in 2003 has helped provide some level of stability and growth but the DRC remains a fragile country requiring considerable investment and reconstruction.
The UN 2015 Human Development Report ranked the DRC 176 out of 188 countries on the Human Development Index estimating average per capita income at $680 and life expectancy at 58.7 years; both amongst the lowest in the world. It has a predominantly rural population and it is estimated that fewer than 40% of the nearly 70 million inhabitants live in urban areas.
Socio-economic challenges to growth in rural DRC
Our three plantations – Lokutu, Yaligimba and Boteka - are all significant in size and remote in location. The nearest large towns or cities to the plantations are between 60 and 200 kilometres away and access to the plantations is severely restricted by road. This means there is a reliance on the river Congo to transport produce, materials, people and equipment to and from the plantations; be it food, fertilizer, fuel, building materials, spare parts or specialist advisers. This hinders the pace at which activities can be undertaken whilst also increasing the cost considerably.
The remoteness of our operations also places pressure on the socio-economic infrastructure of both the plantations and their wider area of influence. As with much of DRC, the plantations are in areas which have under-developed local economies which limit the ability to move away from subsistence farming and towards other enterprise-based livelihoods. A legacy of isolation and difficult access to markets has also resulted in reliance by communities on resources available locally such as timber, fuelwood and bushmeat; activities which are not sustainable in the long term given rapid rises in population and pressure on natural resources in the area.
Prior to Feronia acquiring the business in 2009, there had been little in the way of investment in worker housing for twenty years and existing healthcare and education facilities were also very run down. Access to potable drinking water was limited to a small number of boreholes that had not fallen into disrepair and, in the absence of these; water supplies were taken from streams, rivers and ponds.
At 2.3 million km2, the DRC is larger than the combined areas of Spain, France, Germany, Sweden and Norway.
"As the crow flies", Boteka is 600Km from Kinshasa with Yaligimba and Lokutu 1,100Km.
A barge of supplies takes around 3 weeks to get from Kinshasa to Lokutu.
How can sustainable development at Feronia help growth in rural DRC?
The DRC government has identified the following four pillars as part of its growth and poverty reduction strategy:
1. Strengthening governance and peace
2. Diversifying the economy, accelerating growth and promoting employment
3. Improving access to basic social services and strengthening human capital
4. Protecting the environment and fighting against climate change
An important part of the second pillar, “Diversifying the economy, accelerating growth and promoting employment” has been to reinstate agriculture as a priority growth sector. Despite having huge agricultural potential, the DRC still relies heavily on imported food, creating food insecurity through fluctuating prices and scarcity. We aim to contribute to local sustainable food production and security by increasing the availability of edible oil and crop products to people in the DRC as well as enabling opportunities to develop sustainable livelihoods through investment in community development.
We recognise the challenging history and context in which we operate and are committed to conducting our operations in a way that supports the development of all four national priorities - through improving the livelihoods of our workers and communities through the promotion of employment, skills and educational programs, the improvement of healthcare facilities and infrastructure as well as the creation of opportunities. We are also committed to protecting the natural environment in which we operate.
We strongly believe that addressing these challenges is central to securing the future success and longevity of our company and improving the livelihoods of both our employees and broader communities. This is a long term commitment.