Case Name :      Tata Chemicals Magadi: Confronting Poverty in Rural Africa

Authors :           Michael Valente

Source :             Ivey Publishing

Case ID :            W15033

Discipline :        General Management

Case Length :    11 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

In the summer of 2013, the managing director of Tata Chemicals Magadi, Africa’s largest soda ash manufacturer and one of the oldest and largest export earners in Kenya, was wondering how he was going to respond to a growing number of challenges. As a producer of a commodity product, the company was vulnerable to escalating energy costs, oversupply and economic cycles. Global growth had been sluggish since the 2008 economic recession and competition was intense, especially since the emergence of Chinese producers. Magadi Township, where the company’s production facility was located, was one of the poorest in the country, subject to droughts and without many of the basic public services typically provided by government such as roads, health care, electricity, water and education. To address these needs, the company migrated from a top-down, paternal, ad hoc and resource-intensive approach to a bottom-up, collaborative, holistic and resource-sharing style that focused on community capacity building and self-governance. However, the issue now is how to best balance the strong need to reduce costs while remaining committed to the sustainability of the surrounding community.