If you headed a company in a country that has a substantial prevalence of HIV/AIDS, how would you convince your board of directors to endorse free anti-retroviral therapy (ART) for infected employees and their families? No simple task. This was the challenge James Mathenge, CEO of Kenya's Magadi Soda Company, and his senior management faced.
With operations dating to 1911, Magadi Soda is one of Kenya's oldest private firms. The company uses Lake Magadi’s trona to produce soda ash, a vital component in producing glass, detergents, and various chemicals. Soda ash is also used in the manufacture of such diverse products as pharmaceuticals, baked goods, toothpaste, and deodorants.
Located in the Kajiado district in the Rift valley Province of Kenya, the company has developed a strong bond as a development partner with the Maasai, a semi-nomadic people.
How IFC Helped
IFC's first financing of Magadi Soda was a $9 million loan for a major rehabilitation that expanded the productive capacity of the company by 50,000 tons a year. The loan also enabled the company to take over from Kenya Railways the operations of a 150 km branch line connecting its plant to the main Nairobi-Mombassa railway line.
Since 2003, IFC Against AIDS has worked with Magadi Soda to enhance its AIDS program. With IFC support, the company adopted an HIV/AIDS policy, crafted a road map for program implementation, created an AIDS Committee to drive priorities for action, appointed a coordinator, and mainstreamed HIV/AIDS into the company’s community development work.
Other issues included the provision of voluntary counseling and testing services, as well as an increase in HIV/AIDS education and awareness activities. Provision of free ART to employees and their families began in mid-2004. Today, 11 of 553 employees are receiving ART.
Although Magadi Soda has a long history of providing benefits to employees and the local community, including subsidized medical care, there were serious concerns among the board members that providing ART would escalate costs.
The Business Case for Action Against AIDS
As James Mathenge, Magadi’s CEO, has told IFC, "Our response was that if we ignore treatment for HIV, yet are extending medical care to employees and their families and to the community through a highly subsidized system, our costs will go up, because we will end up treating opportunistic infections [associated with the virus]."
The company estimates the adult prevalence of HIV/AIDS in the area where it operates to be 9 percent. This is higher than Kenya’s national figure of 7 percent as reported by the joint United Nations Program on HIV/AIDS (UNAIDS). Mathenge believes companies cannot afford to ignore HIV/AIDS. “We are going to pay for it now or later,” he says.
A 2004 assessment of the epidemic’s impact on Magadi Soda’s business estimated that direct and indirect costs exceeded 4 million Kenyan shillings (about $55,000), while the current cost of ART is 50,000 shillings ($700). This translates to an expenditure of about 4,500 shillings--about $63--for each of the HIV-positive people taking the life-prolonging drugs.
AIDS Action Plan
Magadi Soda has developed a detailed HIV/AIDS action plan that aims to provide a more systematic, coordinated, and sustained approach to fighting the epidemic. Implementation is the responsibility of the AIDS Committee comprised of staff and community members. Components of the plan include:
Effective partnerships are crucial to Magadi Soda’s AIDS program. The company is collaborating with the African Medical Research Foundation (AMREF) and PharmAccess for training of clinical staff and the company’s AIDS committee.
The company is exploring partnerships with other organizations to offer free nutritional supplements and foodstuffs to needy people living with HIV/ AIDS. The company is also looking at greater liaison with existing government programs.
IFC’s Collaboration with Magadi Soda Company Ltd.
|IFC loans $9 million for a major rehabilitation and debottlenecking program.|
|IFC provides a senior loan of up to $22 million and a C-loan of up to $4 million to help finance a new plant that will produce up to 365,000 tons a year of high purity soda ash.|
|IFC, through its Corporate Citizenship Facility, helps the company develop, fund, and implement a Community Development Plan that is being delivered through a local NGO. IFC also helps the company formulate a formal HIV/AIDS policy and craft a road map for program implementation.|
IFC Against AIDS works with client companies to accelerate their efforts in fighting HIV/AIDS.
For further information contact:
Tel: (202) 458-1406