Mr. von Deessen, BASF and Grameen are launching a health joint venture in Bangladesh. How did the contact and the idea come about?
BASF is always open towards innovative business opportunities and unconventional strategies. We therefore like to approach people who come up with new ideas for social and economic development. That’s why our attention was drawn to Nobel Peace Prize Laureate Muhammed Yunus and the Grameen Bank. A cooperation project with Grameen enables us to combine economic success with our corporate social responsibility (CSR) effort. BASF is now the first company in the chemical industry to launch a cooperation programme with Grameen.
Can you tell us something about the Bangladeshi healthcare system?
Bangladesh is one of the poorest countries in Asia. Some 40% of the population lives below the poverty line. For these people, primary health care is far from sufficient. Many Bangladeshis suffer from malnutrition and insect-borne diseases. According to a report by the World Health Organization (WHO), 2.9 million people in Bangladesh suffer from malaria. Some 72% of the population is threatened by the disease. The degree of malnutrition among infants and mothers is among the highest in the world, according to the UNICEF Child Report 2008. Roughly 8 million children under the age of five suffer from malnutrition.
What are the objectives of the joint venture?
The common objectives of our BASF Grameen Ltd. joint venture are to improve health care and promote business opportunities for Bangladeshis from the poorer social classes. The programme starts with two BASF products: dietary supplement sachets containing vitamins and micronutrients as well as coated mosquito nets for protection against disease-transmitting insects.
How does the business model work?
Social business is a sustainable form of entrepreneurship aimed at maintaining a balance between social objectives and economic success. These programmes are not charity projects, but viable business models that either reinvest profits or use them for building more social business enterprises. The BASF Grameen Ltd. joint venture meets all these criteria. Due to the huge demand for dietary supplements and mosquito nets, we have decided to establish our joint venture with these two products in Bangladesh. The company
will start working at the BASF site in Dhaka. At first, the focus of the dietary supplement project will be on large-scale consumers like schools and established distribution channels such as pharmacies. In the medium term, sales will be organized via Grameen’s networks, directly to final consumers. In urban areas, the coated mosquito nets will be available in local grocery and clothes stores as well as in pharmacies. In rural areas, the malaria protection device will be sold by our pesticide distributors in cooperation with the Grameen network. Grameen plans to help people to open their own businesses or finance mosquito nets with the aid of micro credits.
How is BASF contributing? And what are Grameen’s responsibilities?
Besides the investment of roughly 200,000 euros, BASF is providing the joint venturewith half a million sachets of vitamin supplements and micronutrients as well as 100,000 mosquito nets. Grameen is contributing specialist expertise regarding local markets and distribution structures as well as Bangladeshi networks.
The joint venture project is referred to as a social business. What do you understand by that?
Social business means combining social development with economic success. It’s not about donations, but about economically viable enterprises that aim to improve the living conditions of economically disadvantaged people. The profits are either used for corporate growth or as start-up capital for new social businesses. The Grameen Group is leading the way in this kind of social business, especially in Bangladesh, and it has already founded a large number of these businesses in different fields. Our cooperation with Grameen is based upon this experience. We are convinced that our joint venture will contribute to improving the situation of people in Bangladesh.
How important is corporate social responsibility in your company?
It’s very important! As a company, BASF is part of society and we take our social and environmental responsibility very seriously. For a long time now, sustainable business management has been an integral part of the BASF strategy. The strategic and organizational establishment of sustainability helps us recognize things at an early stage and at the same time develop new business opportunities for BASF.
Do you think this business model can be applied to other countries?
Yes, I do. Its transfer to other fields, with different products or into other regions, is certainly feasible. In talks with Grameen we have come to the conclusion that malnutrition and health hazards caused by malaria are urgent problems for which BASF can provide solutions. The local BASF operation in Bangladesh and Grameen’s well-established structures mean that there is a sound logistical basis for success. First of all, we will have to gain experience before we can think of further projects in other countries.
The interview was conducted by Martin Orth
