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Viewpoint 13


How Ebola is affecting the supply chain T


heWorld Cocoa Foundation recently donated $600,000 to fight Ebola inWest Africa –money raised by itsmembers, which


include big chocolatemakers such as


Mondelēz, Nestlé and Hershey. It’s not pure altruism. Almost 70 per


cent of the world’s cocoa production comes fromWest Africa – notably: Côte d’Ivoire, Ghana, Nigeria and Cameroon – countries close to the outbreak. TheWCF funding is going to the


International Federation of Red Cross and Red Crescent Societies and Caritas, which are playing a critical role in efforts to control the virus. Bill Guyton, president,World Cocoa


Foundation, said: “The spread of Ebola is a serious concern toWCF and our member companies… “We recognise that many rural


communities inWest Africa, including those where cocoa is grown, need support


to find sustainable solutions to economic and social problems that may hinder their ability to tackle threats such as Ebola.” So far, the virus has not been seen in


Ghana or Côte d’Ivoire, the two main producing countries, but, inevitably, fear of the potential impact has already had an effect on cocoa prices. Of course, the Ebola epidemic is not


only affecting the cocoa supply chain. Liberia is a big exporter of rubber and iron ore. Guinea’s main export is aluminium ore, while Sierra Leone is major exporter of iron ore, titanium ore and cocoa. A group of major employers in Liberia have formed an organisation, the Ebola Private Sector Mobilisation Group (EPSMG), to help combat the spread of the virus. The group represents 45 of the largest


private employers inWest Africa, including: ArcelorMittal Liberia, Equatorial Palm Oil, ExxonMobil, Golden


Veroleum, Putu Iron OreMining, Total Liberia,Monurent, AureusMining Company, Chevron and PriceWaterhouse Coopers.MarcusWleh, head of external affairs and corporate responsibility at ArcelorMittal Liberia, who chairs the EPSMG, said the group will focus its activities on four areas of concern: social mobilisation and awareness, logistics, public partnership and early recovery. Apparently, this kind of private sector


activity is unprecedented in Liberia. Dr Lawrence Bropleh, head of legal affairs and corporate communications at Lonestar MTN, said: “Everyone asks what the private sector is doing, but for the first time we have a cohesive and holistic effort from the private sector to help the fight against Ebola.” The human cost of the Ebola outbreak


has already been terrible, and unless it is checked, it could get worse. Malory Davies.


£30bn prize for supply chain success T


he UK should focus on boosting supply chains that are primarily driven by innovation and service, according to a report by the


Confederation of British Industry in association with AT Kearney. Boosting growth in manufacturing sub-


sectors driven by these factors could boost the economy by as much as £30bn by 2025, creating over 500,000 jobs, it reckons. The report, “Pulling together:


Strengthening the UK’s supply chains”, highlights the shift away from cost-driven off-shoring towards a recognition that other factors – the ability to innovate, increase quality and reduce product lead times – can be just as important. “While we must be cost competitive, the


UK cannot and should not aim to be the lowest cost economy on the planet, it says, arguing that “What the UK can and should aim to be, however, is the destination of choice for supply chains driven by innovation, quality and service.” The report argues that strong supply chains provide the building blocks for a balanced economy. “The resilience and overall health of an


economy is influenced by the balance and diversity of the industries that power it: more diverse economies are able to show greater resilience to volatile performance in individual sectors. Healthy supply chains should be a key driver of this balance and diversity in the UK – enhancing growth and productivity, improving the UK’s balance of trade performance, boosting the economic performance of regions outside of the greater south east and providing a range of jobs for people of all skill levels. “Stronger domestic supply chains will contribute to higher growth and


Supply Chain Standard December 2014


productivity by boosting the performance of the manufacturing sector, which has an above average GVA per worker – employing around eight per cent of the UK’s total workforce, it accounts for over 10 per cent of GVA. The sector also typically sees greater year-on-year productivity increases than the economy as a whole. And it points out that an expanded


industrial sector would make an important contribution to improving the UK’s balance of trade. “We have consistently run a deficit since


1998, and although this has edged down in recent years, in Q2 2014 it still amounted to £6.9bn or 1.3 per cent of GDP. Driving this deficit has been a high trade deficit in goods, standing at £9.4


billion in June 2014. StrengtheningUK supply chains could


make a significant impact here. Boosting domestic supply chain capacity wouldmake theUK less reliant on imports and boost the potential for exports.Manufacturers already make a disproportionately strong contribution toUK exports: though just over 10 per cent of the UK’s total economy by output,manufacturing contributes 46 per cent of exports.” The report calls on the government to


increase spending on research and development with the aim of reaching a combined public and private spend of three per cent of GDP. It also calls on industry to play its part and expand collaborative supply chain innovation schemes. There are also proposals on education


and training, procurement, and supporting long term investment. Two other proposals highlight some significant weaknesses: Production of critical materials is under


threat, it says, calling on the government and industry to establish a UK ‘materials strategy’ along similar lines as the sector strategies already in existence and collaborate on the development of roadmaps for transformative materials technologies. There are gaps in supply chains that


need to be filled by attracting more businesses. The report calls on industry and government to establish an integrated approach to attracting foreign direct investment, with industry helping to ‘warm up’ potential investors and all layers of government joining up to present a coherent offer to them. These are challenging tasks – but with £30 billion at stake it must be worth the effort. Malory Davies.


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