In West Africa, the name Vlisco evokes heritage, quality and individuality. Established more than 160 years ago, the Vlisco Group’s textiles are at the heart of fashion in West and Central Africa. The company designs, manufactures and distributes 70 million yards of branded fabrics annually through its operations and retail presence in Côte d’Ivoire, Ghana, Togo, Benin, Niger, Mali and the Democratic Republic of Congo. Vlisco also directly employs 2,700 people and it helps to create thousands of additional indirect jobs for salespeople, shopkeepers and tailors. The group’s brands include Vlisco, Woodin, GTP and Uniwax.
In 2010, the company was acquired by Actis, a global private equity firm investing in Africa,Asia and Latin America. Actis’ mantra – the positive power of capital – highlights the firm’s focus on integrating environmental, social and governance factors into all of its investment decisions. Actis has worked closely with Vlisco’s management team to accelerate the development and implementation of the company’s environmental and social strategy. This strategy is driven by Vlisco’s mission – to expand its business and make a greater economic and social impact in African markets.
BUILDING A SUSTAINABLE AND LOCALISED SUPPLY CHAIN
Vlisco’s activities in West Africa, through its two factories in Côte d’Ivoire and Ghana, have generated US$49 million in value added to the local economy and created 19,400 indirect jobs through its supply chain1.
A large part of Vlisco’s shift in strategy has occurred through an increasing focus on the localisation of its supply chains.
West Africa is an important cotton producer and cash crop for small farmers. However, over the past 25 years, what was once a robust industry in cotton spinning and weaving has diminished considerably.Consequently, sourcing cotton locally is a challenge.
Today, about 18 million yards, or 41%, of the fabric for Vlisco’s factories in Ghana and Côte d’Ivoire are sourced in Africa (the remainder is from Asia). Vlisco has reached this milestone through the following projects:
|Partnership with Cotton Made in Africa(CmiA):
||CmiA’s mission is to help farmers earn a better income by training them in modern and sustainable farming methods that improve the quality and yield of their crops. Unlike many sustainably produced goods that have higher costs, Vlisco purchases cotton from certified farmers in Côte d’Ivoire through Ivoir Coton, at world market prices, which has a positive impact on the local economy, while also keeping Vlisco’s lead times low. Farmers earn approximately 20% more in income as a result of CmiA training. Additionally, CmiA sets labour standards, including ensuring workers’ rights through employment contracts and adequate health and safety practices.(2)
|Partnership with cotton supplier in Benin:
||Vlisco has developed an important partnership with CBT, from whom they purchase approximately 12 million yards of cloth. Using a local supplier benefits Vlisco’s operations in two ways: reduced lead times for delivery of cloth to its factories in Côte d’Ivoire and Ghana, as well as lower prices for the cloth. Cotton is one of Benin’s largest export products (17%) and by purchasing from a local supplier, Vlisco adds $7 million in GDP along the supply chain and supports farmers, who represent one of the most vulnerable parts of society.
|Developing cotton industry in Ghana:
||Vlisco is engaging with the Government of Ghana to help in the development of its largest cloth producer, by financing the purchase of cotton lint. In addition, Vlisco’s factory in Ghana adds US$11 million in value to the economy annually.
Vlisco has also been sourcing items for its ready-to-wear collection from small workshops in Côte d’Ivoire and Ghana, which employ 20 to 40 people. The value of this approach to Vlisco is significant because it reinforces its brand promise to offer its customers unique African textiles and products, with a distinct cultural identity. In addition, Vlisco is helping the workshops to meet labour and health and safety standards through a sourcing code of conduct, thus improving the lives of the artisans.
Overall, the socio-economic benefits of building a localised supply chain include:
- Improving the livelihood of small farmers: 3,100 farmers are now engaged in cultivating cotton to meet Vlisco’s demand.
- Creating jobs: 8,600 jobs have been created in Benin, Côte d’Ivoire and Ghana as a result of Vlisco’s cloth sourcing.
- Eliminating the use of child labour: CmiA-certified cotton is not a product of exploitative child labour.
- Decreasing negative environmental impact through sustainable farming methods: CmiA-certified cotton has a smaller ecological footprint as a result of reduced use of pesticides and lower greenhouse gas emissions.
With Actis’ support, CSR has established itself in Vlisco’s business principles. “There is a momentum within the company now,” explained Jan.
There is work left to be done. The company’s labour, environmental and local sourcing programmes will continue to develop, as it sets new goals and expands its African footprint.
“There is no question that being active in CSR takes more effort,” said Jan. “It is more work and it requires extra support, but we are gradually winning over hearts. The effort is worth it.”
The company wants to contribute economically, socially and environmentally to the markets in which it operates and sells its products. Vlisco believes that a successful business model can combine commercial success with social and environmental improvements, particularly given that textile manufacturing and printing can have a significant environmental impact.
Vlisco’s environmental and social (E&S) strategy includes three central pillars:
|Responsible sourcing of cotton
||The company is increasingly sourcing materials in Africa, as part of its efforts to localise its supply chain. These efforts include work with farmers to increase the sustainability of production practices(especially water and agrochemical use)
|Social and community support
||Employees are involved in community engagement in Holland,while in Africa the firm is focused on providing social and medical services, including a tailoring education programme for underprivileged women
|Sustainable use of natural resources
||Water recycling and energy savings are at the heart of the company’s environmental management systems
Vlisco has introduced the following initiatives to reduce the company's environmental footprint and costs.
1. Wastewater treatment and recycling: given the scarcity of freshwater in Ghana, Vlisco is increasing its use of recycled water in the production process,resulting in a reduction of its water bills
2. Responsible use of pesticides and water:Farmers for CmiA-certified cotton are trained on the efficient use of rainwater and careful use of organic fertiliser and pesticides, thus creating more sustainable supply chains
3. Energy savings: at its headquarters and factory in Helmond, the company is reducing emissions and using greywater recycling, both of which are lowering costs.
One of the defining characteristics of Vlisco is that women are at the centre of its business – as customers, distributors and, importantly, as the focus of one of the company’s social initiatives.
The Democratic Republic of Congo (DRC), which is one of Vlisco’s key markets,remains politically and economically fragile following civil war, and humanitarian emergencies persist in parts of the country. It is estimated that the country has 2.3 million displaced persons1.
Monique Gieskes, Group Director of Brand Protection at Vlisco, met a group of women in the DRC whose lives had been overturned by the civil war. “The stories were devastating.When I heard what type of hardships and difficulties these women had experienced,I thought we could do something through Vlisco,” said Monique.
In 2012, Vlisco launched a tailoring programme for underprivileged women in Goma, in eastern DRC, to help them attain financial autonomy. Thirty women have completed the six-month training programme, where they learned basic tailoring skills, enabling them to earn a living and begin rebuilding their lives. The programme also includes financial and commercial training, to assist these women to go on to work independently as seamstresses and entrepreneurs. Vlisco is working with a technical institute, the l’Institut Supérieur des Arts et Métiers, to expand the training programme across the country.
For Vlisco, the benefits are two-fold. Firstly, the seamstress academies support the company’s drive to empower African women, by helping them to build the skills needed to become a part of the supply chain and benefit economically. Secondly, the value of such an initiative to Vlisco’s brand and reputation is significant, despite the fact that it is a well-established company in West Africa. In addition, through social reintegration,the women can begin to contribute to the wider economy in DRC, which is one of Vlisco’s key markets.
The programme has been expanded, with the launch of a tailoring academy in Ghanain collaboration with a fashion school, targeting young women who have been unable to pursue a tailoring career due to socio-economic constraints. The initiative is also expected to roll out in Nigeria in late 2014.
1 “Socio-economic impact of Vlisco’s grey cloth sourcing in Western Africa,” Steward Redqueen, June 2014.