Illovo Sugar Malawi’s decision to venture into the scrap metal business has ignited outrage among local Small and Medium Enterprises (SMEs), who claim the move will devastate their livelihoods.
The Malawi Stock Exchange-listed company, which produces raw, brown, and refined sugar, has announced plans to sell scrap metals directly to recycling companies in Limbe and Blantyre.
This shift in policy has sparked concerns among SMEs that previously purchased scraps from Illovo’s Nchalo estate.
James Chiutsi, Executive Secretary of the Chamber for Small and Medium Businesses Association, criticized Illovo’s decision.
“We plead with Illovo to reconsider this decision… It’s very punitive to come up with a decision before concluding investigations,” Chiutsi said.
Illovo Sugar Malawi’s Managing Director, Lekani Katandula, cited irregularities as the reason for suspending contracts with SMEs at Nchalo.
However, Chiutsi argued that the company should investigate and address these issues rather than abandoning local businesses.
“This move will kill Small and Medium Enterprises, which is opposite to what Illovo has been doing in the past,” Chiutsi added, referencing the company’s history of providing business opportunities to communities surrounding its factories in Nchalo and Dwangwa.
Tax analysts have also raised concerns about Illovo’s tax obligations, questioning how the company will manage payments for its new scrap metal business.
Illovo Sugar Malawi employs 11,800 people and is a significant player in Malawi’s economy.
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