Beyond the bottom line

Hailed by global partners such as USAID and the UN, Sudan's DAL Group is demonstrating the power one company has to help a country

Ihab Daoud is standing quietly at the back of a crowd outside the headquarters of DAL Group, in Sudan’s dusty capital, Khartoum. It is hours before the launch of the firm’s first food festival – a celebration of Sudanese culture held for local residents – and Ihab, managing director of the group’s food division, looks on as a speech is given in his honour. The unassuming businessman may flinch at taking centre stage, but the speech exposes a list of philanthropic achievements for which he can feel rightly proud.

“Success is often measured in dollars: many companies can be successful,” says Ihab. “For DAL, there is more to it. We’re very much about leaving a legacy.”

“Philanthropy is part of day-to-day business. We seek out opportunities where there is a link between what we can do to help society, and how we can support our business”

DAL is an unlikely champion. Based in Sudan, a state that has teetered close to bankruptcy amid years of unrest, sanctions and bureaucratic bungling, it has beaten the economic odds to not only survive, but thrive. DAL is today the country’s biggest firm, capturing sales of more than $1bn a year, and with a presence across much of Sudanese industry. Its portfolio spans real estate, healthcare, food and agriculture, among other sectors, all propelled by a 7,500-strong workforce. That DAL has also succeeded in making social enterprise the beating heart of its business model, is little short of astonishing.

“Philanthropy is part of day-to-day business for us,” says Ihab. “We seek out opportunities where there is a link between what we can do to help society, and how we can support our business.”

It is costly work. DAL estimates it has fed millions of dollars into corporate social responsibility (CSR) efforts since the early 1980s. Its initiatives range from income-generating schemes for women’s groups, to reforestation efforts, to providing free milk for schoolchildren. But Ihab says he is most proud of the company’s bakery school, which launched in 2000. The project began life as a class for professional bakers, training some 60,000 staff in 11,000 external bakeries across Sudan, before DAL took the decision to open the school to the wider public.

“It started from a very simple idea,” Ihab explains. “We were offered senior bakers by one of our suppliers, to train our customers. There was huge demand for training and the bakers were also very keen to take part. We began with a small bakery development centre and it grew into something much bigger.”

In the 15 years since, DAL has trained 200,000 people in safe baking techniques, including housewives who attend the thrice-daily classes. A free bus service helps transport those for whom the trip might otherwise be impossible, while a further five buses operate as mobile bakery units, touring the roads and outlying villages in northern Sudan.

DAL funds the running costs of the school at $2m a year, and has gone so far as to offer seed funding to a number of pupils, enabling them to launch microenterprises to sell their baked goods. In a country where less than a third of women are active in the workforce, and where gross national income per capita is estimated at $1,550, such help is highly prized. “It’s very critical assistance, because it helps them to earn,” says Daoud.

As the biggest wheat importer and miller in Sudan, DAL has substantial sway. Its efforts to eliminate the use of potassium bromate – a potential carcinogen once widely used in Sudan as a bread improver – by introducing bakers to proved flour, have had an industry-wide impact. The Sudanese government outlawed the substance in 2003, but made little headway in curbing its use. According to DAL, more than 90 per cent of Khartoum’s bakeries are now potassium bromate-free, following its campaign.

“By training people, we’ve eliminated its use,” explains Ihab. “The value to the community is, we feel, immense.”

A private, family-run business, DAL occupies an unusual niche. The conglomerate has flourished despite Sudan’s turbulent history, including almost four decades of civil war. The last century of Sudan’s existence witnessed the highest civilian death toll of any conflict since World War II. The Arab-African country lost an estimated three-quarters of its oil reserves, its primary source of revenue and cash for food imports, when South Sudan seceded in 2011. It still faces US trade sanctions, first imposed in 1997, which curb access to credit and the wider global markets.

In Khartoum, where tea shacks and other microbusinesses jostle for space at the side of busy roads, the government is trying to move towards a more structured, commerce-driven economy. But, with more than 46 per cent of the country’s population living below the poverty line, according to data from Beirut-based research firm ICARDA, the task ahead is vast.

“We try to do the best for DAL Group, the best for society and the best for the country,” says Osama Daoud, Ihab’s elder brother. “Actually, in many ways, I think all these elements fit together.”

As chairman of the company, Osama is the driving force behind its philanthropic-led outlook. The 65-year-old leads an organisation that is proud of its local heritage and has always sought out ways to give back to society. “You know, we’re trying to create a good organisation that will last beyond me or anybody else,” he says. “Hopefully, we’ll be like our Nubian pyramids.”

DAL takes this duty seriously. As a major agricultural player – the group has a 10 per cent share of Sudan’s dairy market – food security is high on its agenda. Despite fertile land, Sudan produces too little to feed its 37.2 million people and remains partly reliant on food imports. Food price inflation puts staples beyond the reach of some communities, while a fragmented agricultural sector curbs efforts to ramp up local production. Some 3.3 million Sudanese face ‘stressed’ and ‘crisis’ levels of acute food insecurity, found a January 2014 report. UN agencies estimate some 35 per cent of the population may suffer from stunting brought on by malnutrition.

DAL’s dairy operations began at Osama’s behest, with 25 young cows and a small farm. Today its largest farm Ailafoun, located just outside of Khartoum, stands at 500 hectares and is home to some 5,000 cows. A further 9,000ha holding sits on the River Nile. In developing the farm, the firm rolled out modern irrigation and animal husbandry methods, training smallholder farmers to increase milk production. DAL Food buys this extra yield, at market price, boosting the farmers’ livelihood.

The milk initiative doesn’t stop there. Seeking to displace powdered milk, which is cheaper but imported, DAL believes it can slash the cost of milk for everyone by improving production and creating demand nationally and across the wider region. “It’s all about making basic foods affordable, that’s our aim,” says Osama. “We call it our white revolution.”

DAL’s efforts to place social enterprise at the core of its business activities have not gone unnoticed. The group has netted dozens of awards for its work, including being named a Social Investment Pioneer by the UN Global Compact (UNGC). Following a recent visit to Sudan, Sir Mark Moody-Stuart, the former Shell chief and chairman for the foundation for the UNGC, described DAL’s ethos as “truly impressive”.

“You have some of the best examples of corporate responsibility, as an integral part of day-to-day business, rather than as an add-on, that I have seen in visits to many different parts of the world,” he remarked. “DAL is a company I would have been proud to work for.”

The Daoud brothers’ father, Daoud Abdelatif, founded DAL in the 1960s, after winning a distribution contract from US-based machinery giant Caterpillar. A self-made man, who served as a politician for a time after Sudan’s independence from Anglo-Egyptian rule in 1956, he did much to shape DAL’s approach to corporate philanthropy and employee development.

“We empower the people we trust,” says Osama. “We give them authority and responsibility. We create a good work environment and we support them, fully.”

His influence can also be felt in DAL’s school milk initiative. The firm’s dairy operations introduced free milk into the education system in 2011, after identifying an issue with children skipping classes, in order to work to earn enough money to afford a meal. Net attendance in Sudan’s primary schools is just 75 per cent, according to estimates from the UN.

DAL began by supplying 45 schools and approximately 20,000 students in Khartoum and the Red Sea State with free milk. By providing incentive and nourishment, DAL says pass rates among students rose from 68 per cent in 2011 to 80 per cent in 2014. The annual cost of this scheme, which DAL funds directly, is $1.25m. The US Agency for International Development (USAID) has recently joined as a donor, and the company is keen to partner with other agencies to expand the initiative across Sudan.

“It has no direct business advantage,” explains Osama. “We do it as our way of paying back society. We feel a responsibility to help.”

Looking ahead, DAL sees growth in the pipeline. The company has plans to expand not only within Sudan, but also into neighbouring African countries where it feels its model of inclusive economic growth can help ignite change. A public listing is another option, as a means to further underpin DAL’s future. But whatever shape that future takes, social responsibility will remain at the company’s core.

“We are determined to do certain things and if we face difficulties, we don’t give up,” concludes Osama. “You know, we just keep going.”

Preserving talent

Years of unrest drove many young Sudanese to seek opportunities abroad, creating a vacuum of educated talent in the Arab-African nation. The challenge that DAL Group – and indeed Sudan – faces today, is two-fold: how best to entice these professionals to return home, and how to retain the next generation of graduates.

The group is tackling the issue with two initiatives. The first is a scheme whereby an annual intake of 20 promising graduates spend two years with DAL, learning about the firm’s myriad operations. The firm reports that more than 90 per cent of interns choose to stay on at the end of the programme, accepting permanent roles.

The second initiative is an international school, built to offer a top-level education to students and cater for the families of Sudanese expatriates. The firm’s strategy was simple: to bring in exceptional teachers to work with – and train – locals. Today, the school has students and staff spanning some 39 nationalities.

“We want to bring up the new leaders in the country and for them to have an international outlook,” explains Osama. “Our children have gone to... top universities all over the world. [It] is a good sign that in Sudan there is the talent and it can be done.”

Photo credit: DAL Group