By Burnett Munthali
Illovo Sugar Malawi’s recent decision to venture into the scrap metal business has sparked outrage among local Small and Medium Enterprises (SMEs), with many accusing the company of threatening their livelihoods and disrupting the local economy. The move has raised concerns that it could crowd out smaller businesses that rely on scrap metal as a key resource for their operations.
SMEs in Malawi, particularly those involved in metal recycling, have expressed their frustrations, arguing that Illovo’s entry into the scrap metal market—an industry largely dominated by small businesses—could lead to unfair competition. Many local entrepreneurs fear that the multinational company’s financial resources and larger market presence will put them out of business.
“Illovo’s decision to enter the scrap metal business is a major blow to us small-scale operators,” said one local scrap dealer, speaking on condition of anonymity. “We depend on this business to sustain our families, and now we face the possibility of being undercut or squeezed out entirely by a company with far more resources.”
While Illovo has stated that its decision is part of its diversification strategy to increase revenue streams, it has not been well-received by many local businesses. The company’s large-scale operations, ability to purchase in bulk, and established infrastructure could allow it to dominate the scrap metal market, leaving smaller enterprises struggling to survive.
Local SME associations have raised their voices in protest, calling on the government to step in and regulate the scrap metal market to ensure that small businesses are not sidelined by larger corporations. They argue that without protective measures, the livelihoods of thousands of individuals who depend on the scrap metal industry will be severely affected.
“The government needs to ensure that the playing field remains level,” said a representative from a local SME association. “This is a matter of fairness—small businesses should not be forced to compete with giant corporations that have the power to set prices and dictate market conditions.”
In response to the backlash, Illovo Sugar Malawi has emphasized that it plans to operate in the scrap metal market responsibly and with a focus on sustainability. However, critics remain skeptical, stressing that the company’s entry into this space could exacerbate inequalities within the industry and lead to job losses in the local economy.
As the debate continues, the future of local SMEs in the scrap metal sector remains uncertain. Many are now calling for greater collaboration between big businesses, government, and small enterprises to ensure that all stakeholders can thrive without jeopardizing the livelihoods of vulnerable groups. The situation highlights the broader challenges faced by SMEs in Malawi, who often struggle to compete with larger, more established players in the market.
