Economy

"Our human destiny is inextricably linked to the actions of all other living things. Respecting this principle is the fundamental challenge in changing the nature of business."
- Paul Hawken, The Ecology of Commerce

 

The Sekem Initiative, Egypt

First published in LEDIS, Local Economic Development Information Service, 2005

The Sekem Initiative is a successful example of social capitalism, operating on organically managed farmland reclaimed from the desert, outside Cairo. It promotes both economic and social and cultural development among its 2,000 employees.

Origins
Sekem started with the personal vision of Dr. Ibrahim Abouleish, who was born in Egypt in 1937. After training in Austria in chemistry, medicine and pharmacology, Dr. Abouleish returned to Egypt in 1975, where he was overwhelmed by his country’s lack of education, its overpopulation, and its pollution, particularly from the use of chemical pesticides.

A vision was kindled in his heart, and he returned in 1977 to establish Sekem, which means “vitality from the sun”. Egyptians recognize that the sun is a life-giving force, permeating and enlivening the Earth’s entire being. “I had a vision of a three-fold project that would allow me to contribute to community-building, humanity, and healing the earth. The desert was like the canvas of a painting, but without a frame.”

He founded Sekem on a 70-hectare patch of scrub and desert near Belbeis, 60 km north-east of Cairo, on the eastern edge of the southern Nile Delta. With a group of Europeans and local Egyptian farmers, planted many trees, bringing life to an untouched part of the desert with the aid of natural biodynamic organic fertilizers. As the soil improved, they planted herbs, and started producing and selling herbal medicines. By 1983, they were harvesting their first crops of organic fruits, vegetables and spices. In the years since, Sekem has grown into a rich community of businesses, schools, and non-profit societies that employs some 2,000 people.

Aims and Objectives
Sekem is intended to establish a blueprint for a healthy corporation in the 21st century, and to show that profit-making can go hand-in-hand with social and cultural enrichment. To quote Dr. Abouleish: “We strive at Sekem to build a community in which people of all nations and cultures work and learn together with the aim to acknowledge, nurture and love the super-sensible world and noble ideals.” As well as producing a large variety of organically grown consumer products of high quality, and restore the earth by means of biodynamic agriculture, Sekem seeks to achieve a greater integration of the arts, religion and sciences, with the main aim of developing people.

“It was my wish for this initiative to embody itself as a community in which people from all walks of life, from all nations and cultures, from all vocations and age groups, could work together, learning from one another and helping each other, sounding as one in a symphony of harmony and peace.” (Dr. Ibrahim Abouleish)

One of Sekem’s offshoots, the Egyptian Society for Cultural Development, aims to elevate the total welfare of the Egyptian people by enabling them to determine and realize their own socially unique and culturally appropriate development path.

“All the different aspects of the company, whether the cultural ones or the economic ones, have been developed out of Islam. We believe that it is possible to derive guiding principles for everything from pedagogics, to the arts, to economics, from Islam.” (Dr. Ibrahim Abouleish)

Activities
The Sekem Holding Company operates six businesses, and the Egyptian Society for Cultural Development, which is responsible for social, cultural and health initiatives. Sekem has also established the Centre for Organic Agriculture in Egypt, and the Egyptian BioDynamic Association (EBDA). The six businesses are:

  • Sekem, a processing company whose 81 employees process and sell herbs, spices and dried vegetables from biodynamically cultivated plants. Founded in 1979.

  • Atos, a phyto-pharmaceutical joint venture with Gebrüder Schaette AG in Germany, whose 384 employees research, develop and produce medicines made from natural ingredients for heart disorders, cancer, hepatitis, and many other diseases. Founded in 1986.

    Libra, an organic farming company whose 225 employees grow rice, cotton, legumes, oils, oil seeds, and essential oils, for distribution to other Sekem companies, and in Egypt, Europe and America. Founded in 1992.

  • Conytex, whose 241 employees use organically grown cotton to design, develop and make 250 different articles of baby clothing, bathroom wear, bedsheets, and kitchen ware. Founded in 1994.

  • Hator, whose 74 employees produce and pack fresh organic fruit and vegetables for local and export markets. Founded in 1996.

  • Isis, whose 84 employees produce and pack organic cereals, bread, dairy products, oils, spices, teas and conserves for sale in Sekem’s chain of five “Nature’s Best” shops in Egypt, all supermarket chains, grocery shops and pharmacies, and the herbs in Europe. Founded in 1997.

  • The Sekem Holding Company supports Sekem’s six companies by promoting the overall biodynamic concept to the public, cooperating with the government, NGOs and other partners, and supporting Sekem’s six companies in the areas of finance, exports, graphics, business solutions, legal affairs, information technology, etc. Founded in 2001.

  • The Egyptian BioDynamic Association groups together and advises 400 different farms throughout Egypt which use the biodynamic organic methods of agriculture on over 8,000 acres of land, 1,800 acres of which is newly reclaimed desert land. The Centre for Organic Agriculture in Egypt certifies the farms as organic. Founded in 1994.

On the social and cultural side of Sekem’s activities, the Egyptian Society for Cultural Development, founded in 1984, is designed to develop a strong sense of self-consciousness and dignity among Sekem’s farmers and families. It has helped Sekem to build a kindergarten, the Sekem primary and secondary schools (300 pupils), a vocational training centre, an Institute for Adult Education, the Sekem Academy for Applied Arts and Sciences, an illiterate children’s programme, a special education programme for handicapped children, and the Sekem Medical Centre, which provides medical, health outreach and women’s health services to Sekem’s families and to the local community, treating 30,000 people a year.

Structure and Finance
Sekem Holdings is a privately owned holding company, whose six companies are wholly owned subsidiaries. The Egyptian Society for Cultural Development and the Egyptian BioDynamic Association (EBDA) are non-profit, non-governmental organizations.

Taken together, approximately 40% of Sekem’s income comes from its own activities. A further 30-35% comes from grants, and 15-20% from aid, mostly from the EU and the US. Sekem workers contribute a small part of their salaries to help maintain a social fund for colleagues in need, managed by the cooperation of Sekem Employees, and Sekem itself donates 15-20% of its profits to the social development side of its activities.

The EBDA is almost self-sufficient, based on fees from participating farmers (50 E£ per acre). (1 Euro = 8 E£). In 2002, Sekem obtained a $5 million US loan from the International Finance Corporation (an arm of the World Bank) to expand, reorganize, and financially restructure its six companies.

There is one other aspect of Sekem’s structure that should also be mentioned. Every morning, at a set time, the employees of every company meet in a circle, where each person reports briefly about their activities of the previous day, and their intentions for the present day. Each company has an administrator who is responsible for the wellbeing of the workers and the quality of their work environment, and who organizes their training, career development, and health care programme. The Cooperative of Sekem Employees works to ensure that workplace issues are looked after, and that the democratic rights and values of the workers are respected.

Performance
Sekem has grown from one man’s vision, in 1977, to employ 2,000 people. Revenues grew from 37 million Egyptian pounds in 2000 to 100 million in 2003. In 2003, Sekem earned $81 million E£, and realized a 25% increase in profits. 55% of its sales are domestic, within Egypt.

In 2003, Dr. Ibrahim Abouleish was awarded the Right Livelihood Award in Stockholm, “for a business model for the 21st century in which commercial success is integrate with and promotes the social and cultural development of society through the ‘economics of love’”. In 2004, the World Economic Forum selected Sekem’s founders as outstanding social entrepreneurs, establishing the blueprint for the healthy corporation of the 21st century.

In addition to the successful employment of 2,000 people, and the provision of social and cultural services to their families and other villagers, Sekem’s initiative in founding the Egyptian BioDynamic Association has led to a major expansion of organic farming in Egypt and further afield in Tunisia, Morocco, Palestine and Lebanon. Within Egypt, 600 farmers from Aswan to Alexandria are applying the international guidelines for biodynamic agriculture on over 8,000 acres, after undergoing a 2-3 year transition process..

In one specific area – the cultivation of cotton – Sekem has achieved a major breakthrough. After the Aswan high dam was built in 1970, the Nile no longer floods, and the farmer’s fields have been deprived of the nutrients that came with the silt. As a result the farmers have turned to the heavy and expensive use of chemical fertilizers and pesticides, especially on cotton, but with no increase in their average yields pf 900 kg per acre.

Working in collaboration with Egypt’s Ministry of Agriculture, Sekem researched and then introduced the use of biological pheromones to control cotton insects, which led to a ban on crop dusting throughout Egypt. (Pheromones are hormonal substances secreted by female insects, used by organic farmers to trap and eliminate male insects.) By 2000, the use of pesticides on Egyptian cotton fields had fallen by over 90%. 80% of Egypt’s cotton is now grown without synthetic insecticides, and average yields have risen by nearly 30% to 1220 kg per acre. The organic cotton also has better fibre elasticity, and is less contaminated with leaf fragments.

Sekem also has a deep aesthetic commitment to beauty. The farm and other buildings are painted in pastel colours, and the pathways are all lined with flowers and trees, in striking contract to the chaos, noise, dirt and smog of nearby Cairo.

Future
As the number of farmers who are growing biodynamically increases, Sekem can expect to see a major increase in the direct suppliers of organic produce sold to Sekem for processing, packaging and distribution. The market for Fair Trade products is also opening up, now that a number of Sekem’s business activities have been Fair Trade certified.

For further information contact :
Helmy Abouleish, Managing Director
SEKEM
3 Cairo-Belbeis Desert Road,
P.O. Box 2834
El-Horreya,
11361 Cairo, Egypt
Tel: +2 02 65 64 124/5
Fax: +2 02 65 64 123
helmy.abouleish@sekem.com
www.sekem.com