Document Abstract
Published:
2008
Measuring Unilever’s Economic Footprint: The Case of South Africa
Development or hindrance? - Unilever in South Africa.
This report provides an analysis of the Unilever “economic footprint” in South Africa. Unilever South Africa (ULSA) ranks among that country’s “Top Forty” companies, and in 2005 it generated about R8.5 billion in sales of branded food, home, and personal care products, while employing more than 4 000 workers and managers. This paper seeks to establish the overall impact of this enterprise on South Africa’s growth and development, and on its society and environmental quality.
The analysis shows that, in 2005, ULSA and its employees were directly or indirectly responsible for generating output of more than R32 billion and, in the process, supporting approximately 100 000 jobs throughout the South African economy. ULSA is responsible for a number of other important economic effects as well. The direct, indirect, and induced effects of ULSA operations on government tax revenues, for example, total some R4 billion, equivalent to almost 0.9% of all government revenue. The input-output analysis shows that ULSA’s contribution to value added throughout the economy amounted to R12.5 billion in 2005, or around 0.9% of the country’s GDP. As an employer, ULSA pays wages and provides comprehensive benefits that include medical care (including for HIV/Aids) and a private pension scheme. As a producer of fast-moving consumer goods, ULSA contributes to consumer welfare through its products and brands. South African consumers have been using products like Sunlight Soap and Rama margarine for more than 100 years.
However, this report also suggests a number of ways in which ULSA and its parent company Unilever could be even more supportive of the South African economy:
The analysis shows that, in 2005, ULSA and its employees were directly or indirectly responsible for generating output of more than R32 billion and, in the process, supporting approximately 100 000 jobs throughout the South African economy. ULSA is responsible for a number of other important economic effects as well. The direct, indirect, and induced effects of ULSA operations on government tax revenues, for example, total some R4 billion, equivalent to almost 0.9% of all government revenue. The input-output analysis shows that ULSA’s contribution to value added throughout the economy amounted to R12.5 billion in 2005, or around 0.9% of the country’s GDP. As an employer, ULSA pays wages and provides comprehensive benefits that include medical care (including for HIV/Aids) and a private pension scheme. As a producer of fast-moving consumer goods, ULSA contributes to consumer welfare through its products and brands. South African consumers have been using products like Sunlight Soap and Rama margarine for more than 100 years.
However, this report also suggests a number of ways in which ULSA and its parent company Unilever could be even more supportive of the South African economy:
- ULSA should seek to ensure that its local suppliers, who are under increasing competitive pressure from the global economy, receive the ongoing support needed to maintain and improve their productivity levels so they remain competitive
- it should continue to provide the top-notch training that workers (and “learners”) require to improve their skills
- it might wish to consider a more targeted CSI programme that focuses on those areas in which the firm possesses a sustainable competitive advantage
- ULSA should maintain an ongoing dialogue with the South African government to ensure a policy environment that promotes private sector investment, without which the country will not be able to generate economic growth, reduce poverty, inequality, and unemployment.
