Sumitomo Chemical and the Fight Against Malaria Using Bednets: A

Sumitomo Chemical and the Fight Against Malaria Using Bednets

A CASE STUDY

Christina Gradl

CSR Initiative, Harvard Kennedy School

The material in this publication is copyrighted. Quoting, copying, and/or reproducing portions or all

of this work is permitted provided the following citation is used:

Christina Gradl (2013). “Sumitomo Chemical and the Fight Against Malaria Using Bednets

–A Case Study." Cambridge, MA: the CSR Initiative at the Harvard Kennedy School.

The views expressed in this paper are those of the authors and do not imply endorsement by the

John F. Kennedy School of Government, or Harvard University.

ACKNOWLEDGEMENTS

This report would not have been possible without the collaboration of a great number of

stakeholders in the Olyset ecosystem, listed on page 33. In particular, the author is grateful for the

ongoing support provided by Lisa Goldman of Sumitomo Chemical.

The author would also like to thank her CSR Initiative colleagues Jane Nelson and Beth Jenkins for

the thoughtful reflection and insightful feedback they provided throughout the research and

writing process.

Finally, the author would like to thank Edouard Barthen for research support.

Written by Christina Gradl

Cover photographs: M. Hallahan/Sumitomo Chemical

FOREWORD 4

EXECUTIVE SUMMARY 7

1. THE GLOBAL LLIN ECOSYSTEM 11

1.1 Malaria – A global disease 11

1.2 A brief history of combating malaria 12

1.3 The market for bednets 16

1.4 Challenges 16

2. SUMITOMO CHEMICAL’S ROLE IN THE GLOBAL LLIN ECOSYSTEM 18

2.1. Olyset Net 18

2.2 The A to Z – Sumitomo Joint Venture 20

2.3 The future of Vector Health International 21

3. GLOBAL POLICIES AND THE LOCAL LLIN ECOSYSTEM IN TANZANIA 23

3.1 Beginnings 23

3.2 The Tanzanian National Voucher Scheme (TNVS) 24

3.3 More programs 25

3.4 Results 26

4. SYSTEMIC CHANGE APPROACH AND LIMITATIONS 29

4.1 The boundaries of ecosystems change 29

4.2 Combination of structures 30

4.3 Lessons learned 31

APPENDICES

A Interviews 33

B Literature 33

C List of abbreviations 35

D Endnotes 36

Sumitomo Chemical and the Fight Against Malaria Using Bednets

4 Sumitomo Chemical and the Fight Against Malaria Using Bednets

evelopment challenges, such as tackling poverty

and unemployment; improving food, water and

energy security; increasing access to education,

health care and nutrition; and adapting to climate

change, are notoriously systemic. They have their roots

in public awareness, regulatory and policy frameworks,

social and cultural norms, market dynamics, institutional

capacity, infrastructure, and many other factors that

shape people’s incentives and drive their behavior. And

behind each of these factors is a set of interconnected,

interdependent stakeholders.

Increasingly, the private sector is being recognized by

the development community as a crucial partner in

helping to address these challenges. New technologies,

products and services and more inclusive business

models are helping to improve livelihoods and quality

of life for millions of low-income households while at

the same time improving the efficiency of natural

resource use and decreasing environmental degradation.

Yet, with a few notable exceptions such as the

development of mobile banking, most of these

market-based solutions have not achieved business

growth and development impact at scale. Many are

impeded by a combination of market failures,

governance gaps, insufficient financing, and inadequate

individual and institutional capacity. There is an

enormous need for more collaborative solutions that

leverage the combined resources and capabilities of

business, government and civil society to overcome

these barriers.

In this context, the Corporate Social Responsibility

(CSR) Initiative at Harvard Kennedy School has

undertaken research on the different strategies and

structures that companies are using to strengthen the

ecosystems around their inclusive business models. We

have looked at three approaches that can help overcome

barriers to scaling these business models:

• Private initiative by an individual company along its

own value chain;

• Project-based alliances between a company and one

or more other organizations; and

• Platforms that are formal networks of potentially

large numbers of players, established for a common

purpose.

These structures are complementary, and companies

often use them in combination, either sequentially or

simultaneously. The following case study looks at a

private initiative for providing bednets for use against

malaria in Tanzania and the rest of Africa.

Sumitomo Chemical is a leading global chemical

company based in Japan. In 1993, the company

developed a technology whereby insecticide could be

embedded directly in polyethylene fiber. Olyset Net was

born. Long-Lasting Insecticide Treated Net (LLIN)

remain effective in killing mosquitoes for five years or

longer. With this technology, Sumitomo Chemical was

confronted with a fascinating opportunity and a new

responsibility: it could make a significant contribution

to fighting malaria, a disease that kills approximately

one million people every year.

Sumitomo Chemical decided to use this opportunity

to empower a local ecosystem for net production in

Tanzania. As part of a joint venture in 2007, it

transferred the technology royalty-free to A to Z Textile

Mills Ltd., a local producer already engaged in the

manufacturing of bednets. Demand for bednets soared

as donors made the fight against malaria a priority. A

new factory in Arusha can produce 30 million nets per

year and employ 7,500 people. Through awareness-

raising campaigns, Sumitomo Chemical also invested

in increasing the demand for and use of bednets

globally. After donors had achieved their coverage goals

and faced budget constraints as a result of the global

financial crisis, demand for bednets fell drastically. The

company and its local partner A to Z Textile Mills Ltd.

are currently at an inflection point. How can they use

the production capacities to keep the thousands of

people employed? Is there a way to reinvigorate demand

from end consumers?

The Olyset case study shows, above all, the complexity

of strengthening inclusive business ecosystems. In

particular, it shows the limitations of private initiative

Foreword

Sumitomo Chemical and the Fight Against Malaria Using Bednets 5

in this endeavor. Much of the inclusive business

literature is based on an implicit premise that the

government is absent in the markets of the poor and

that these markets are largely informal. In the market

for bednets, however, governments and donors are the

most important and influential players. Fighting

malaria is a public health concern both locally and

globally. Changing policies from governments and

donors can rapidly alter the conditions for companies in

this market.

The case study raises more questions than it can answer.

This is a good thing: it provides food for thought and

discussion on the interplay between public and private

actors in strengthening inclusive business ecosystems.

Sumitomo Chemical, we believe, is a particularly

interesting example to advance our understanding of

the strengths and limitations of both public and private

actors in creating markets and addressing social

problems. The joint venture between Sumitomo

Chemical and A to Z Textiles Ltd. was hailed as a

landmark example for inclusive business when it was

created a few years ago. It is also an example for how

public procurement can stimulate job creation, capacity

building and economic growth in sub-Saharan Africa.

We hope that this case study can open up new

perspectives on public-private collaboration in inclusive

business ecosystems.

Since it was founded in 2003, the CSR Initiative at

Harvard Kennedy School has worked to bridge theory

and practice in the field of multi-stakeholder

partnerships. This case is part of a series focused on

collaboration between business and other sectors to

drive systemic change. Our goal is to learn in “real time”

how a new generation of collaborative initiatives

designed for systemic change and scale are mobilized,

and how they work. We hope others will benefit from

the experiences of these initiatives and be able to

accelerate their own progress in developing models that

achieve both business benefit and development impact

through tackling some of the world’s most pressing

development challenges.

Jane Nelson

Director, CSR Initiative

Mossavar-Rahmani Center for Business and Government

Harvard Kennedy School

6 Sumitomo Chemical and the Fight Against Malaria Using Bednets

Case Study Background

This case study is part of a Harvard Kennedy School CSR

Initiative workstream on systemic approaches to creating

business opportunity and development impact at scale.

An initial framing paper, “Tackling Barriers to Scale:

rom Inclusive Business Models to Inclusive Business

Ecosystems,” was published in September 2011.

This document is one of three in-depth case studies to

generate knowledge and provide practical guidance on

what such systemic approaches look like and how to

structure and implement them.

Inclusive business includes people living in poverty into

the value chain as producers, consumers, employees

and business partners. Inclusive business ecosystems

are the communities or networks of interconnected,

interdependent players whose actions determine whether

or not a particular company’s inclusive business model

will succeed. These players typically include individuals,

companies, governments, intermediaries, NGOs, public

and private donors, and others.

Broadening the focus from developing inclusive business

models to strengthening inclusive business ecosystems,

the research suggests, helps companies deal more

efficiently and effectively with the widespread challenges

in the slums and villages where the poor reside.

Companies use a variety of strategies to strengthen the

ecosystems around their inclusive business models.

These include awareness-raising and capacity-building,

research, information-sharing, public policy dialogue,

and creating new organizations.

Companies execute these strategies using three structures

to harness the necessary resources and capabilities and

overcome the incentive problems inherent in coordination

and cooperation: 1) private initiative by an individual

company, 2) project-based alliances and 3) platforms.

This case study explores an example of a private initiative.

Private initiative by an individual company is the default

structure for firms seeking to strengthen their inclusive

business ecosystems, because it enables them to move

quickly with fewer transaction costs. It presumes sufficient

resources and the necessary capabilities, and typically

works best when incentive problems are limited to the

company and its direct customers and suppliers – and can

be addressed through payment and certification systems

already embedded in the business model.

umitomo Chemical and its activities around Long-Lasting

Insecticide-Treated Nets (LLINs) was chosen as a case study

because it highlights the challenges and limitations of an

ecosystem approach. The Japanese chemical company has

developed a technology that maintains such nets as

effective and intact for more than five years. To enable

production of nets in Africa, where the need for them was

greatest, Sumitomo Chemical transferred the technology

to A to Z Textile Mills Ltd., a manufacturer in Tanzania.

The joint venture quickly scaled up to 7,500 employees,

producing much of the global supply of mosquito nets

for the ongoing Universal Coverage Campaign. But with

increasing competition and decreasing donor funding

for nets, the joint venture is now struggling to keep

employees at work. At the same time, Sumitomo Chemical

is engaged on the global level in raising awareness for

LLINs. The limitations of private initiative to strengthen

inclusive business ecosystems are clearly the boundaries

set by the public sector. The challenge confronting

Sumitomo Chemical is to navigate the complex ecosystem

around LLINs, which is at once global and local, public and

private, and stay abreast of changes in the ecosystem.

The research sought to generate insight into the following

questions:

• How can private initiatives strengthen inclusive business

ecosystems? Where are the limitations?

• How can private initiatives be combined with other

structures to strengthen inclusive business ecosystems?

This case study was conducted between June and

September 2011, including on-site interviews in Tanzania

between August 28 and September 12. Tanzania was

selected as a site for field research since several examples

of inclusive business ecosystem development had been

identified there.

Sumitomo Chemical and the Fight Against Malaria Using Bednets 7

Executive Summary

The global LLIN ecosystem

Malaria is still a major cause of illness and death in

developing countries around the world. Approximately

half of the world's population is at risk of malaria,

especially children under age 5 and pregnant women.

Nearly one million people died of the disease in 2008,

mostly children living in Africa. Malaria is caused by

parasites that are spread to people through the bites of

infected Anopheles mosquitoes, called “malaria

vectors”, which bite mainly between dusk and dawn.

Malaria is a preventable disease. “Vector control”,

eliminating or keeping away the mosquitos that

transmit the disease, can help prevent infections. Today,

the main instruments for vector control are

Indoor-Residual Spraying (IRS), where walls are

sprayed with insecticide, and the use of Long-Lasting

Insecticide Treated Nets (LLINs), a special type of

bednet that contains insecticide and does not need to be

retreated.

After a failed elimination program in the mid-20th

century, malaria came back on the global agenda in the

1990s, after a dramatic increase in malaria mortality

and morbidity. In 1998, the WHO, UNICEF, UNDP

and the World Bank launched the Roll Back Malaria

Partnership (RBM) as a global framework to

implement coordinated action against malaria.

Subsequently, a series of global goals to reduce the

burden of malaria were announced, from halving

malaria mortality by 2010 to universal coverage of all

beds with nets by 2010 to achieving near-zero mortality

from malaria by 2015.

As a result, international funding for malaria control

rose steeply. Disbursements reached their highest ever

levels in 2009 at US$ 1.5 billion. The Global Fund to

Fight HIV/AIDS, Malaria and Tuberculosis, launched

in 2002, is by far the biggest donor, having disbursed

almost US$ 1 billion in 2009 alone. The US President's

Malaria Initiative and the World Bank also provide

significant funding.

Donors spent much of their budget on procuring and

disbursing LLINs. By the end of 2010, approximately

289 million LLINs had been delivered to sub-Saharan

Africa, enough to cover 76% of the 765 million persons

at risk. All LLINs procured under these schemes have to

be certified by the WHO. In 2011, donors had

achieved the goals defined by the Universal Coverage

Campaign, and funds available reduced drastically, also

as a result of the global economic crisis.

The results of the global campaign have been

significant: A total of 11 countries in Sub-Sahara Africa

showed a reduction of more than 50% in either

confirmed malaria cases or malaria admissions and

deaths in recent years. The challenge will be to keep up

this level of control. Nets will need to be replaced soon.

In addition, resistance of mosquitoes against

pyrethroids, the only insecticide class currently used for

LLINs, is increasing fast.

8 Sumitomo Chemical and the Fight Against Malaria Using Bednets

Sumitomo Chemical’s role in the global

LLIN ecosystem

Sumitomo Chemical is a leading global chemical

company. Its customers are almost exclusively

businesses that buy inputs for their production.

Sumitomo became involved in the fight against

malaria because it had developed a superior

technology for Insecticide Treated Nets (ITNs) in

1993. Olyset Net is a LLIN that remains effective in

killing mosquitoes for five years or longer.

For Sumitomo Chemical, Olyset Net, though rather

small in terms of revenue, is a critical CSR activity. It

allows the company to show the social value of its

products in a very tangible way. Therefore, Sumitomo

Chemical is not just producing the nets, but is

investing significant resources in promoting its net

technology and malaria prevention in general around

the world. Among other initiatives, it supports

Malaria No More and, in partnership with the Royal

Commonwealth Society (RCS), launched the “Me

and My Net” competition. Moreover, dedicated staff

represent Sumitomo Chemical in the global discourse

around net provision.

Olyset Net was the first net that received WHO

Pesticides Evaluation Scheme (PES) certification in

October 2001. Consequently, WHO asked Sumitomo

Chemical to increase the capacity for producing

LLINs to meet the surging demand from international

donor agencies and funds. The company found

partners in China and Vietnam to produce nets, and

others in Kenya, Malawi and Ethiopia to do the

stitching.

Sumitomo Chemical felt that nets should be produced

where they were most needed, in Africa. In this way,

production would also create jobs and income for

local people. In 2003, the company entered into a

partnership with A to Z Textile Mills Ltd. to produce

Olyset Net in Arusha, Tanzania. It transferred the

technology royalty-free and helped with the setup of

the production. In 2007, the two companies created

the joint venture “Vector Health International”

(VHI). A new factory was built that employs 7,500

people and has the capacity to produce 30 million nets

per year.

After some years of quick scale up and enormous sales,

the joint venture is now at an inflection point. Today,

10 manufacturers are certified by WHO, and so

competition has increased. Because tenders define only

a minimum durability of three years and usually take

the cost of production as the price criterion, the two

competitive advantages of VHI’s Olyset Nets –

longevity and local production in Africa – are not being

considered, which makes it increasingly hard to win

tenders. In September 2011, ordering books were

empty and machines were standing still, also due to

energy scarcity in Tanzania.

In order to use the production capacities, Sumitomo

Chemical decided to actively create new markets. It has

just launched Olyset Net on the commercial market in

Kenya, where the net is now available in all sales

channels. It has installed a machine to recycle the nets

at VHI. Finally, the company has entered into a new

joint venture with A to Z, where both companies are

establishing a research site in Arusha. Among other

things, the facility will develop new net technology with

new insecticides to counter looming resistance.

Global policies and the local LLIN

ecosystem in Tanzania

Sumitomo Chemical entered the market in Tanzania

with the joint venture with the intention to build local

capacity for LLIN production. Tanzania was also the

arena for the global debate among proponents of free

net distributions and those defending the power of

market forces and sales of nets. Tanzania thus provides

an interesting case study for how global policies can

affect local markets and companies.

From 1998, public health NGO Population Services

International (PSI) started a multi-year social marketing

EXECUTIVE SUMMARY

Sumitomo Chemical and the Fight Against Malaria Using Bednets 9

campaign to develop a commercial market for nets. As a

result, Tanzania became the biggest producer of

insecticide-treated nets (ITNs), the predecessor technology

to LLINs, with four local manufacturers. 20,000 retailers

sold the nets to customers, who bought them for around

US$ 3

. In 2004, 3.3 million nets were sold.

In 2004, the Ministry of Health and Social Welfare

under the National Malaria Control Programme

initiated the Tanzania National Voucher Scheme

(TNVS). The scheme provides a subsidized net to all

pregnant women and their infants. This subsidy further

stimulated the commercial market. In 2009, the TNVS

was readjusted to ensure that women had to pay no

more than US$ 0.3 per net. To implement the complex

control system required by this new policy, LLINs had

to be produced and distributed by just one

manufacturer, VHI. This change effectively left the

three other manufacturers without business, since

without LLIN technology, they could not compete on

the global market. In addition to the TNVS, two

campaigns for free distribution of nets were

implemented from 2008 to 2011, the Under-five Catch

Up Campaign and the Universal Coverage Campaign.

In total, 25.3 million free nets were handed out to

Tanzanians, a population of 44 million, as part of these

campaigns. As a result of these interventions, the

commercial market for nets has completely dried up.

VHI has become a very important player in this local

ecosystem. It is the sole provider of nets to the national

voucher scheme. Some donors even started to worry

that its position was too strong for the local market.

With 7,500 employees, A to Z Textile Mills Ltd.

became one of Tanzania’s largest employers. Yet, the

success of A to Z Textile Mills Ltd./VHI depends to a

great degree on global policies which it is unable to

influence. While global, local and corporate priorities

seemed to be aligned at one point, this alignment has

been lost over time. The global LLIN campaigns

resulted in good coverage for the moment, but have

been unable to strengthen local ecosystems that would

maintain these high levels. As a result, Sumitomo

Chemical’s effort to build local capacities and thus

strengthen local ecosystems might not reap the social

and economic benefits that were intended.

Systemic change approach and

limitations

Sumitomo Chemical found itself stretched between the

global and the local ecosystem for LLINs. On the global

level, donors were keen to scale up production and

increase competition for nets. On the local level, the

production partnership with A to Z increased market

power of A to Z to the degree that global donors were

concerned about it. At the same time, local policies

drove other competitors out of the market, and the lack

of global funds led to local problems when orders did

not come any more. What was the role for the chemical

company in strengthening this ecosystem?

The case of Sumitomo Chemical shows the limitations

for companies in actively shaping inclusive business

ecosystems. Most of the unavoidable limits for

companies to shape the ecosystem around them are

defined by the public sector. By coordinating the

multiple players in a sector or around an issue,

companies partially take on public responsibilities. This

happens when there is a certain public void – when

government is either not functional or not interested.

This is precisely why ecosystem change is so important

for inclusive business, especially business in the context

of slums and villages, where government is often rather

absent. In a situation where the public sector is stepping

up and clearly leading the way, companies can only act

on the execution level and provide their inputs to the

policy makers.

Even in situations where the public sector is strong,

companies can play an important role in strengthening

the ecosystem within the boundaries of the political

framework. Sumitomo Chemical provided its technology

royalty-free to A to Z Textile Mills in order to build

local production capacity for the nets that would

mainly be used in Africa. It thus helped to bring

another player into the picture, which might not have

EXECUTIVE SUMMARY

10 Sumitomo Chemical and the Fight Against Malaria Using Bednets

EXECUTIVE SUMMARY

been able to participate otherwise, and created jobs and

income opportunities in Tanzania. Through its

project-based alliances, it helps to raise awareness for

vector control globally. Finally, its active involvement

on the global issue platforms makes sure the private

sector’s concerns, from tendering policies to resistance

and recycling, are heard and influence the public

debate.

Sumitomo Chemical maintains an ongoing

commitment to strengthening the LLIN ecosystem.

However, the company wants to learn how better to

navigate the complex LLIN ecosystem. How can the

company balance the demands of global and local

stakeholders? How can the different interests of

Sumitomo Chemical and A to Z Textile Mills be

aligned under the joint venture? The case study shows

that combining structures for strengthening ecosystems

is not without challenges. Though the diverse

stakeholders and frameworks may be aligned at one

point in time, alignment can be lost over time as

framework conditions change.

The case study of Sumitomo Chemical and the LLIN

market highlights the challenges as well as the potential

of strengthening ecosystems through private initiatives.

Technology transfers and the accompanying capacity

building can lift local companies in developing

countries into the league of global players, creating

employment and economic opportunity. By providing

evidence of the positive impact of such initiatives,

companies can make the case toward public agencies to

revise their procurement policies and support similar

initiatives. Sumitomo Chemical has only started to get

more engaged into discussions with donors about these

issues. The example of VHI may well influence donors

approach the procurement of LLINs and other goods in

the future.

Sumitomo Chemical and the Fight Against Malaria Using Bednets 11

1.1 Malaria – A global disease

Malaria is still a major cause of illness and death in

developing countries around the world. In 2010, the

WHO counted 216 million cases of malaria. 655,000

people died of the disease that year, mostly children

living in Africa. In Africa, a child dies every minute of

malaria. The disease accounts for 22% of all childhood

deaths.

Malaria also causes significant economic losses. The

WHO estimates that gross domestic product (GDP)

can decrease by as much as 1.3% in countries with high

levels of transmission. The health costs of malaria

include both personal and public expenditures on

prevention and treatment. In some heavy-burden

countries, the disease accounts for up to 40% of public

health expenditures, 30% to 50% of inpatient hospital

admissions, and up to 60% of outpatient health clinic

visits. Malaria disproportionately affects poor people

who cannot afford prevention and treatment or have

limited access to health care.

Malaria is caused by

Plasmodium parasites.

The parasites are

spread to people

through the bites of

infected Anopheles

mosquitoes, called “malaria vectors.” They bite mainly

between dusk and dawn. Symptoms appear seven days

or more after the infective mosquito bite. The first

symptoms – fever, headache, chills and vomiting – may

be mild and difficult to recognize as malaria. If not

treated within 24 hours, malaria can progress to severe

illness, often leading to death.

Approximately half of the world’s population is at risk

of malaria. In 2008, malaria was present in 108

countries and territories. Especially at risk are children

under age 5 who have not yet developed immunity

against the most severe forms of the disease. Malaria

infection during pregnancy results in high rates of

miscarriage and low birth weight as well as maternal

deaths.

1 The global LLIN ecosystem

Figure 1. Malaria prevalence around the world

High global deaths

Low global deaths

Elimination

Malaria free

Picture 1. Anopheles mosquito

©James Gathany

Source: World Malaria Report 2008, Geneva: WHO (2006 data)

12 Sumitomo Chemical and the Fight Against Malaria Using Bednets

THE GLOBAL LLIN ECOSYSTEM

1.2 A brief history of combating malaria

Malaria is a preventable and treatable disease. “Vector

control,” i.e. eliminating or keeping away the

mosquitoes who transmit the disease, can help prevent

infections. A variety of medicines have been developed

over the years to treat those who fall sick.

In the mid-19th century, malaria was endemic in most

regions of the world, affecting about 90% of the world’s

population. After successful efforts to reduce malaria

with DDT beginning in 1945, the 8th World Health

Assembly launched the Global Malaria Eradication

campaign for most malarious countries in 1955. The

countries of sub-Saharan Africa were excluded, since

eradication did not yet seem in reach. The main

approach to malaria eradication was indoor residual

spraying (IRS), primarily with DDT. In all, 37 of the

143 countries that were endemic in 1950 were free of

malaria by 1978, of which 27 were in Europe or the

Americas. The effort helped to reduce malaria in almost

all targeted countries. However, some of the countries

were unsuccessful in interrupting transmission. Basic

health services were not widespread enough, and

funding was lacking. By 1973, it was concluded that in

some countries a time-limited eradication program was

impracticable, and strategies were shifted into long-term

integrated control programs.

The Global Malaria

Eradication campaign was abandoned. Little attention

was paid to malaria over the subsequent years.

Malaria mortality and morbidity began to increase again

in the 1980s. Parasites and vectors had become resistant

to the current anti-malarial drugs and insecticides. At

the same time, traditional malaria control programs

weakened, along with the health systems in which they

were embedded. This dramatic increase led to the

adoption of the Global Malaria Control Strategy in

1992. In 1998, WHO, UNICEF, UNDP and the

World Bank launched the Roll Back Malaria (RBM)

Partnership.

The RBM Partnership is a global framework to

implement coordinated action against malaria through

resource mobilization and consensus building. It

comprises more than 500 partners, including

malaria-endemic countries, development partners, the

private sector, nongovernmental and community-based

organizations, foundations, and research and academic

institutions.

It is hosted by WHO. WHO provides

general guidance for malaria control and treatment

policies and interventions.

Table 1. Main malaria interventions

INTERVENTION EXPLANATION

ector control

Insecticide-Treated Nets In addition to keeping mosquitos away, ITNs kill mosquitos resting on them. Since the mosquitoes

(ITNs) feed at night, nets mostly hang above the bed and cover it completely. Long-lasting insecticide

treated nets (LLINs) already contain and release the insecticide,so they don't have to be treated

separately with it.

Indoor Residual Spraying Interior walls of homes in malaria affected areas are sprayed with insecticide.

(IRS) The insecticide kills mosquitos that rest on the wall.

Prevention

Intermittent preventive To avoid infection during pregnancy, pregnant women receive at least two preventive

treatment for pregnant treatment doses of an effective antimalarial drug during routine prenatal clinic visits.

women (IPTp)

Treatment

Artemisinin-based Artemisinin is currently the most effective drug against malaria. The WHO recommends using it in

Combination Treatment combination with other antimalarials, in order to avoid the development of drug resistance

(ACT) against artemisinin.

Source: Author

Sumitomo Chemical and the Fight Against Malaria Using Bednets 13

THE GLOBAL LLIN ECOSYSTEM

igure 2. Evolution of malaria mortality globally

Figure 3. History of malaria eradication and control programs and targets

1950 1960 1970 1980 1990 1990 1990 1990 1990

Millennium

Development

Goals (2015)

Bill and Melinda Gates

Foundation

Calls for eradication of malaria

Global Malaria Action Plan

(2008)

The GMAP provides a

global blueprint for control,

elimination and eventual

eradication of malaria

UN Secretary-General calls

for Universal Coverage

UN Secretary-General Ban

Ki-Moon appoints UN Special

Envoy for Malaria and calls for

universal coverage of malaria

interventions by end-2010

UNITAID (2006)

World Bank Booster

Programme (2005)

US President’s Malaria

Initiative (2005)

Global

Fund

(2002)

The Abuja Declaration

(2000)

African leaders

committed to halving

malaria mortality by 2010

Amsterdam Ministerial

Conference on Malaria

(1992)

Declaration of moving to

a malaria “control” strategy

Global Malaria

Eradication Era

(1955-1970s)

Achieved much success

outside of the tropics but

abandoned with failing

insecticides, concerns

over drug resistance and

implementation

challenges

Roll Back Malaria Partnership

(1998) WHO, UNICEF, World Bank,

UNDP create partnership with the

goal of halving malaria deaths by

2000 and halving again by 2015

RBM Goals (2015)

1900 1920 1940 1960 20001980

Annual deaths (million)

Treatment: Quinine only

Heavy use of DDT spraying

Drug resistance growing

Africa

China and NE Asia

S Asia and Middle East

The Americas

Source: R. Carter and K. Mendis (2002) Evolutionary and historical aspects of the burden of malaria. Clinical

Microbiological Reviews 15 (4), p. 564-594

Source: Roll Back Malaria Partnership (2011) A Decade of Partnership and Results

Source: R. Carter and K. Mendis (2002) Evolutionary and historical aspects of the burden of malaria.

Clinical Microbiological Reviews 15 (4), p. 564-594

Funding Procurement

Awareness

raising

14 Sumitomo Chemical and the Fight Against Malaria Using Bednets

International attention for malaria increased in

subsequent years. The United Nations’ Millennium

Development Goals call for halting and reversing the

incidence of malaria by 2015. In the Abuja Declaration

in 2000, African leaders affirmed their commitment to

halving malaria mortality by 2010. In April 2008, the

UN Secretary General called for universal coverage by

the end of 2010 to halt malaria deaths. The table below

summarizes the international targets.

THE GLOBAL LLIN ECOSYSTEM

Figure 4. Important global actors to fight malaria and their roles

Table 2. International goals to control malaria

TARGET YEAR

2015 (established in the Millennium

Declaration)

2005

(established at the 2000 Abuja Summit)

2010 targets

(established in the 2005 RBM Partnership

Global Strategic Plan 2005-2015)

Universal coverage target

(established in the 2008 RBM Partnership

Global Malaria Action Plan)

2015

(established in 2011 by WHO)

Vector control

methods

> 60%

>80%

100%

Treatment

> 60%

>80%

100%

Burden of

disease

Halve the spread of

malaria

Halve malaria mortality

between 2000 and 2010

Halve the malaria burden

between 2000 and 2010

Near zero mortality

WHO

Guidance on control and treatment policies and approaches

Certification of LLINs through WHOPES

Roll Back Malaria Partnership (RBM)

esource mobilization and consensus building

00 partners from all sectors

UNITAID

Fostering competition

nd ensuring funding

for ACTs

Malaria No More

Nothing But Nets

United Against

Malaria

Affordable Medicines

Facility Malaria (AMFm)

egotiating ACT prices

UNICEF

(among others) procurement

f LLINS

World Bank

S$ 760 mn 2005-2011

President’s Malaria

Initiative (PMI)

US$ 1.2 bn 2005-2010

Global Fund to Fight HIV/AIDS,

Malaria and Tuberculosis

US$ 1 bn in 2009

Coordination

Intermittent treatment

for pregnant women

> 60%

>80%

100%

Source: Author

Sources: RBM Partnership, Global Malaria Action Plan, 2008.14 RBM Partnership, Global Strategic Plan 2005-2015, 2005.15 African Summit on Roll

Back Malaria, The Abuja Declaration and Plan for Action, 2000.16 UN Statistics Division, 2011.17 Office of the UN Secretary-General’s Special

Envoy for Malaria, 2009.18.

Sumitomo Chemical and the Fight Against Malaria Using Bednets 15

As a result of the increased attention, international

funding for malaria control has risen steeply in the past

decade. Disbursements reached their highest ever levels

in 2009 at US$ 1.5 billion, but new commitments for

malaria control stagnated in 2010.

The Global Fund to

fight HIV/AIDS, Malaria and Tuberculosis was set up in

2002 as an innovative mechanism to pool donor

funding. The Global Fund is by far the biggest donor,

having disbursed almost US$ 1 billion in 2009 alone.

The US President’s Malaria Initiative ranks second,

having committed US$ 1.2 billion from 2005 to 2010.

The third biggest donor is the World Bank, having

committed more than US$ 760 million since 2005. All

funding is provided to governments of malaria-endemic

countries. The Global Fund alone had procured and

delivered over 100 million mosquito nets, and a similar

number of ACT malaria treatment courses, by the end

of 2010.

The increased financing resulted in significant progress

in vector control. By the end of 2010, approximately

289 million ITNs had been delivered to sub-Saharan

Africa, enough to cover 76% of the 765 million persons

at risk. WHO estimates that 42% of households in

Africa owned at least one ITN in mid-2010, and that

35% of children slept under an ITN. IRS programs

increased the number of people protected in

sub-Saharan Africa from 13 million in 2005 to 75

million in 2009.

The health benefits have been considerable. A total of 11

countries in sub-Sahara Africa showed a reduction of

more than 50% in either confirmed malaria cases or

malaria admissions and deaths in recent years. WHO

estimates that the number of cases of malaria rose from

233 million in 2000 to 244 million in 2005 but

decreased to 225 million in 2009. The low absolute

decrease is explained by the high level of population

growth. In Africa, population grew by 28% between

2000 and 2009.

The number of deaths due to malaria

is estimated to have decreased by 20%, from 985,000

in 2000 to 655,000 in 2010.

As the era of ready funding for Universal Coverage

Campaigns comes to an end, and budgetary constraints

of donor countries as a result of the ongoing global

financial crisis, contributions to the Global Fund

decreased significantly. As a result, funding round 11

was cancelled. At the moment, it is unclear how funding

for malaria programs will continue.

THE GLOBAL LLIN ECOSYSTEM

Figure 5. international donor disbursements to

malaria endemic countries, 2000–2009

Figure 6. Cumulative number of ITNs distributed in

sub-Saharan Africa, 2000-2009

300

600

900

1200

1500

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

108

204

393

599

692

1055

1472

Disbursements US$ millions

2004 2005 2006 2007 2008 2009

100

150

300

350

Manufacturer deliveries

NCP distribution

Number of ITNs (in millions)

Source: RBM (2011b) Source: WHO 2010 World Malaria Report

16 Sumitomo Chemical and the Fight Against Malaria Using Bednets

1.3 The market for bednets

Insecticide treated nets form an essential part of current

malaria control efforts. Bed nets have proved effective

in reducing the prevalence of the disease. Together with

IRS, insecticide treated nets (ITNs) became the main

element of global prevention strategies.

In 2000, delegates at the African Summit on Roll Back

Malaria in Abuja, Nigeria proposed expanding ITN use.

Starting from close to zero, they set a target of 60%

‘coverage’ for all pregnant women and children by 2005.

Between 2002 and 2005, there was a 10-fold increase

in the coverage of ITNs in more than 14 sub-Saharan

countries, largely attributed to the distribution of

subsidized or free ITNs to pregnant women and

children. Still, by 2005 fewer than 5% of eligible

children slept under ITNs.

Distributing nets to people in rural areas of sub-Saharan

Africa was a challenge. An even bigger challenge was

to provide them with retreatment kits periodically.

Since kits were expensive, there was little demand and

hence retailers would not stock them. Raising people’s

awareness on the need for nets and how to use them was

also difficult. Most people did not see malaria as an

issue, because they had become (partially) immune to it.

Originally, users had to wash and treat ITNs with

insecticide. Nets were made out of polyester and came

packaged with an insecticide sachet. ITNs had to be

retreated every six months. A sachet for the treatment

cost US$ 1.20 – very expensive for most people in

Africa.

The development of LLINs addressed many of

the shortcomings of conventional ITNs. LLINs are

pre-treated with insecticides, they last for at least three

years without retreatment. Today, most of the nets that

are being used as part of the global fight against malaria

are LLINs.

The market for bed nets, and LLINs specifically, is

completely dominated by the public buyers, i.e.

governments and donors. At least in sub-Saharan Africa,

few nets are bought by private end consumers. Public

buyers have to rely on the evaluation of WHO for their

purchasing decision. All donors make it a requirement

that ITNs comply with WHO specifications. Hence,

only LLINs recommended by the WHO Pesticide

Evaluation Scheme (WHOPES) can apply for tenders.

WHOPES evaluates pesticide-based health commodities

intended for public health programs.

In 2010, seven manufacturers supplied almost all the

ITNs in Africa: Vestergaard-Frandsen, Sumitomo/A-Z,

Clarke, BASF, Tana Netting, and Yorkool. Almost all

ITNs distributed are LLINs.

Vestergaard-Frandsen and

Sumitomo/A-Z share the greatest part of the market,

with Vestergaard-Frandsen clearly in the lead.

1.4 Challenges

The Global Fund sees the goals of the universal coverage

campaign as widely achieved. Even though not all

sleeping places have been covered with a net, scale up

has worked fast.

However, in November 2011, round

11 of the Global Fund’s funding cycle was delayed

indefinitely due to resource constraints. Experts are

debating how best to best keep coverage high.

The lifespan of LLIN is currently at least, but not

necessarily more than, 3 years. The nets delivered now

will soon be due for replacement, and some already are.

WHO warns: “Failure to replace these nets could lead to

a resurgence of malaria cases and deaths.”

Picture 2. Mother with children under an LLIN in Kenya

THE GLOBAL LLIN ECOSYSTEM

Sumitomo Chemical and the Fight Against Malaria Using Bednets 17

tan

mal

dependent

cla

nsecti

des.

ris

ial

rve

ave

ive

tes

nes,

mer

d o

f v

ecto

ntro

l a

t th

e G

l M

gram

“D

g in

g l

f resistance in ne

aces.”

WHO intends to

aunch

a global s

ategy to tack

le the p

roblem by the end

2011. Fo

r n

ow, it reco

mmen

ds ro

tin

g in

secticides fo

. But ul

y, e

y n

ew cl

sse

s of i

cti

in particul

ar fo

r I

Ns, are needed.

THE GLOBAL LLIN ECOSYSTEM

Figure 7. Resistance to pyrethoid in Africa

Source: WHO

18 Sumitomo Chemical and the Fight Against Malaria Using Bednets

umitomo Chemical is a leading global chemical

company. Its customers are almost exclusively

businesses that buy inputs for their production.

Sumitomo became involved in the fight against malaria

in 1993, when Dr. Takaaki Ito and Takeshi Okuno (of

Sumitomo Chemical) developed Olyset Net. Insecticide

was embedded in the polyethlylene fiber net, and was

slowly released over time. The net remained effective at

killing mosquitoes for at least five years. Olyset Nets

thus provided a solution to the enormous procurement

and distribution challenge that came with the global

campaign to fight malaria using bed nets. By using

long-lasting nets, these campaigns could be much more

effective. In response to global demand Sumitomo

Chemical took its responsibility seriously and stepped

up production of Olyset Nets. It also became an active

contributor to the global campaigns to raise awareness

for malaria protection. Moreover, the company created

a joint venture with A to Z Textile Mills to produce

Olyset Nets in Tanzania. Over the years, Sumitomo

Chemical learned to navigate the complex and

changing ecosystem of the market for LLINs.

Sumitomo Group is one of the largest industrial groups

in Japan. Like the Toyota group or Mitsubishi, it is a

Keiretsu, a consortium of interlocking businesses,

including banking, trading, electronics, cars (Mazda)

and many other activities. The group was founded in

about 1615 by Masatomo Sumitomo, a former

Buddhist priest. Even today, the company management

is guided by his “Founder’s Precepts.”

Sumitomo Chemical Company, Limited, was founded

in 1913 in order to produce agricultural fertilizer. It has

since expanded into many other areas of chemical

production, including plastics, pharmaceuticals, and

crop protection. It is one of the world’s leading

companies for insect control, and its chemicals are

ingredients for insect repellents and mosquito coils.

In 2010, the company counted sales of approximately

US$ 26 billion and almost 30,000 employees.

2.1 Olyset Net

Sumitomo Chemical developed Olyset Net in 1993.

The inventors, Dr. Ito and Mr. Okuna, had already

experimented with other applications of fusing resins

and insecticides, such as window screens.

The

mosquito net was a natural next step. The nets are

produced out of polyethylene fiber containing the

insecticide permethrin, which is slowly released over

time. Hence, the nets don’t need to be retreated with

insecticide and remain effective for at least 5 years, in

practice 7 years or more.

The invention of Olyset Net became even more

relevant when global efforts to control malaria

reawakened with the foundation of Roll Back Malaria

in 1998. Olyset Nets had also been used in the Japanese

government’s vector control initiative in developing

countries. When WHO recommended ITNs as a

strategy to keep malaria at bay, Sumitomo Chemical

submitted the product for certification with WHO. In

October 2001, it became the first LLIN recommended

by WHOPES.

To meet the surging demand from international donor

agencies and funds, WHO subsequently asked

Sumitomo Chemical to increase the capacity for

producing LLINs. Until then, Sumitomo had produced

the net in Japan. In addition to capacity constraints, high

labor costs rendered the end product very expensive.

Sumitomo was looking for production partners in

countries with cheaper labor costs. It found a partner in

China, and produced 3 million nets in 2003.

2 Sumitomo Chemical’s role in the global

LLIN ecosystem

Sumitomo Chemical and the Fight Against Malaria Using Bednets 19

SUMITOMO CHEMICAL'S ROLE IN THE GLOBAL LLIN ECOSYSTEM

When Hiromasa Yonekura, Chairman of Sumitomo

Chemical, attended the World Economic Forum in

2005, Benjamin Mkapa, president of Tanzania at the

time, raised awareness of the need for more mosquito

nets, and actress Sharon Stone emphatically supported

his plea. The presentations made Mr. Yonekura aware of

the fact that Olyset Net could play a key role in fighting

the disease. Subsequently, he strongly supported

expansion of Olyset Net production.

In 2003, the company entered a joint venture with A to

Z Textile Mills Ltd. to produce Olyset Net in Tanzania.

The next section will explore this partnership more in

depth. In addition, the company started production at

two new plants in Vietnam and China in 2006. It also

initiated business partnerships in Kenya, Malawi and

Ethiopia to stitch the nets. These local manufacturers

would receive the Olyset textile for cutting and sewing.

However, the stitching operations largely failed.

Sumitomo Chemical also explored opportunities to

enter a joint venture in Nigeria, but operating costs

were too high and the company was unable to identify

a partner interested within the public health parameters.

For Sumitomo Chemical, Olyset Net, though relatively

small in terms of revenue, is a critical CSR activity. It

allows the company to show the social value of its

products in a very tangible way. Therefore, Sumitomo

Chemical is not just producing the nets, but is investing

significant resources in promoting its net technology

and malaria prevention in general around the world.

• In 2005 and again in 2010, Sumitomo Chemical

donated nets for the Millennium Villages in Africa,

totalling more than US$ 4 million worth of bednets.

• Since 2009, Sumitomo Chemical has supported the

Malaria No More initiative in a variety of its

projects, including support for Senegal’s most

famous musician Youssou N’Dour with the ‘Senegal

Surround Sound’ campaign.

• In 2010, Sumitomo Chemical collaborated with the

United Against Malaria partnership in production

of public service announcements featuring over 20

African football champions from across the

malaria-endemic continent.

• The company continues to donate nets to support

local awareness raising efforts across Africa. For

example, it provided nets to people in Angola on

Malaria Day in November 2010. In Madagascar the

company distributed locally printed booklets

explaining the correct way to use mosquito nets.

• In 2011, Olyset Net entered into a partnership with

the Royal Commonwealth Society (RCS) to launch

the “Me and My Net” competition. The initiative

aims to raise the awareness of teenagers in 54

commonwealth nations on the importance of

mosquito nets in malaria prevention.

Moreover, dedicated staff represents Sumitomo

Chemical in the global discourse around net provision,

primarily through participation in the Roll Back

Malaria (RBM) Partnership framework. Various staff

members provide the company’s view to the large

international donors and during global meetings on

malaria prevention through the RBM framework. Lisa

Goldman, the company’s representative on the Private

Sector Delegation to RBM, states: “Historically, our

competitors have been much more directly involved in

the political dialogue. As a Japanese company,

Sumitomo Chemical emphasized the quality of its

product and did not want to get involved to deeply

with the political processes. However, over time, the

company came to the conclusion that in this heavily

donor-driven environment, it is indispensable to

present one’s arguments directly to the political players,

and so we are now engaging more actively in the RBM

framework.” Vestergaard Frandsen, the company with

the biggest share in the LLIN market, has emphasized

the engagement on global platforms from the

beginning and has represented the private sector on the

Executive Committee of RBM for a long time. Given

how quickly the political environment around nets can

change, Sumitomo Chemical is now also dedicating

more resources to this global dialogue. In May 2012,

20 Sumitomo Chemical and the Fight Against Malaria Using Bednets

SUMITOMO CHEMICAL'S ROLE IN THE GLOBAL LLIN ECOSYSTEM

Lisa Goldman was elected to the Board and Executive

Committe of RBM.

2.2 The A to Z – Sumitomo Joint Venture

One challenge for Sumitomo Chemical was to bring

down the cost of production of Olyset Nets. It first

outsourced production of nets from Japan to China.

But since most of the nets were needed in sub-Saharan

Africa, the company wanted to build local production

capacity for nets. Local production of nets would have

additional benefits, above all jobs and income for local

people.

In 2003, Sumitomo transferred the technology

royalty-free to A to Z. Production started in 2004 at A

to Z’s production site in downtown Arusha. Soon, it

became clear that production capacity had to increase

significantly to meet the rising global demand for nets.

he partnership between Sumitomo Chemical and A to Z

Textile Mills was organized by a number of other players

in a loose alliance that came together only for this

purpose and quickly dissolved when all arrangements had

been finalized. The idea to produce nets in Africa was

triggered in 2002 by Pierre Guillet, then vector control

specialist at WHO's global malaria program in Geneva. Guillet

had met the CEO of a Tanzanian producer of nets, A to Z

Textile Mills , during a conference of the Multilateral Initiative

on Malaria in 2000 in Dar es Salaam. Guillet had presented

WHO's perspective that LLINs should be used for vector

control activities. A to Z CEO Anuj Shah, who had just invested

in increasing production capacity for polyester nets, asked

Guillet to facilitate a technology transfer and help the

company to remain competitive.

Guillet presented the idea of creating a partnership to

produce LLINs in Africa at the fourth meeting of Roll Back

Malaria at the World Bank in Washington in April 2002.

Sumitomo Chemical and ExxonMobil, who attended the

meeting, were both interested in the approach. Guillet

introduced both companies to A to Z Textile Mills, and all

agreed to pursue the idea further. Thus, the core of the

consortium that would organize the technology transfer

had been established.

In a next step, Guillet asked the Acumen Fund, a fund for

investment in social innovations, for a meeting with the

partners. UNICEF, as a major multilateral player in the fight

against malaria, also joined the meeting in New York. Both

became partners of the consortium. Acumen Fund provided

the first interest-free loan of US$ 325,000 to A to Z in 2003 in

order to invest into the new technology. UNICEF was on board

mainly to endorse the initiative.

In the ensuing meetings, the partners developed a common

plan of action and blueprint for implementation. ExxonMobil

pushed the partners to move quickly to the desired

objectives, contributing to the professionalism of the team.

As it turned out, the resin ExxonMobil produced was not

adequate for production of Olyset Nets. Once the blueprint

had been defined, the consortium dissolved. It had only

been necessary to provide the impetus and conceptualize

the approach. But only A to Z and Sumitomo were required to

execute the technology transfer. Initially, there had been

plans to go beyond production and collaborate to facilitate

the end-user market for nets. But dedication to the initiative

dwindled for personal reasons when the setup of the core

team of representatives changed. Guillet draws as a lesson

from this process: “A good partnership starts with the

individuals who can understand and mutually respect each

other. Organizations are important to support the process.

But the people involved need to have common objectives.

The best way to initiate a functional partnership is to create

the conditions to meet the right people, and let people come

on their own.”

A public-private alliance to facilitate technology transfer

Picture 3. Olyset Net factory

Sumitomo Chemical and the Fight Against Malaria Using Bednets 21

SUMITOMO CHEMICAL'S ROLE IN THE GLOBAL LLIN ECOSYSTEM

The partners decided to build a new production facility

outside of Arusha. They created a 50/50 joint venture

called “Vector Health International” for this purpose.

Acumen Fund provided another US$ 675,000 as both

loan and grant for expansion of the production facilities

in 2005. The new facility opened in February 2008. It

was praised internationally as an example of how public

health efforts could help strengthen local economic

development. The Vice President of Tanzania attended

the opening ceremony, and President George Bush

visited the factory soon after.

The new facility brought production capacity of LLINs

in Arusha to 30 million nets per year, over 50% of

global capacity for Olyset Net production in 2011. It

currently employs 7,500 people.

2.3 The future of Vector Health

International

In the first few years, Vector Health International

(VHI) benefitted enormously from the rising demand

for LLINs. Yet, with increasing competition in the

market, it became more and more difficult to win

tenders. In 2011, there were already nine other

companies offering WHOPES nets. Most of those

companies produce their nets in Asia, facing much

lower costs for energy, transportation, and other

production variables. Most tenders use “Free on Board”

(FOB) as a price criterion rather than “Delivered Duty

Unpaid/Paid” (DDU/DDP). This means shipping and

delivery costs are not considered in the tender, which

effectively neutralizes the cost advantage of local

manufacturing. Even though donors had praised VHI

and the local production of mosquito nets, tender

policies did not recognize the benefits – both in terms

of delivery time and price.

In addition, WHOPES only provides minimum criteria

LLINs have to meet. Specifically, it requires nets to last

for at least three years. Studies have shown that Olyset

Nets last for at least five years. The thick polyethylene

fiber make them much sturdier, but also more

expensive. The cost of covering a bed for one year is

significantly cheaper with Olyset Nets. Yet tenders most

often choose by the “FOB” price, which only considers

cost of production. Thus, tenders systematically ignored

the two main advantages of VHI’s Olyset Nets:

durability and location.

In addition, the company’s original success in its home

market Tanzania turned into a disadvantage when

public buyers started to feel that A to Z was too

dominant in the country, and looked to bring in other

suppliers. For example, VHI lost a tender to deliver nets

to Zanzibar, an island off the coast of Tanzania. Its FOB

price was slightly more expensive. Yet, the main reason

for choosing another manufacturer according to the

buyer was a new criterion, which compared the date

when a sample could be collected. The competitor in

Asia could provide the sample two days earlier.

The Universal Coverage Campaign had ended in 2010.

As a result, demand for nets fell dramatically in 2011.

Funds for procurement of nets were almost used up.

The future and funding of the Tanzanian voucher

scheme was unclear. The commercial market had been

completely crushed by the free distribution of nets. In

September 2011, machines at VHI stood still for the

first time since its opening. The order books were

Picture 4.

Vice President of the United Republic of Tanzania

Dr. Ali Mohammed Shein, CEO of A to Z Textile Mills, Ltd.

Anuj Shah, and President of Sumitomo Chemical Hiromasa

Yonekura visit the newly opened Olyset Net factory in

Arusha, Tanzania.

22 Sumitomo Chemical and the Fight Against Malaria Using Bednets

empty and energy prices in Tanzania had reached an

all-time high due to dramatic shortages in supply.

Both Sumitomo Chemical and A to Z stood at a critical

inflection point. How should they continue with their

joint venture, in the face of these insecurities? The two

partners are each responsible to sell 50% of the

production. Both pursued different strategies to keep

machines running and employees at work.

Sumitomo Chemical sees the future in end-consumer

markets for nets. The company assumes that now that

consumers have experienced the benefits of nets, many

of them will pay to replace the net once it is worn out.

Experiences with different nets might also lead people

to prefer Olyset Nets, which has proven its robustness

and durability. Hence, the company is working to

increase sales in the commercial market. The company

launched its first consumer sales initiative in October

2011, together with a local distribution partner in

Kenya. Kenyan customers have more purchasing power

on average, and the country has not seen as much

distribution of free nets. Customers in Kenya are now

able to buy Olyset Nets in all leading supermarkets

and other shopping channels. The company also

plans to adjust the net to meet consumer preferences.

On the donor market, consumer-friendly product

modifications have not been possible, since all such

modifications add to the cost per unit, and tenders are

won on lowest cost. Yet, even though the commercial

market for nets is likely to grow in the next years, it will

not have the same volume as the market during the

Universal Coverage Campaign.

Sumitomo Chemical has also installed a new machine

to recycle Olyset Nets at VHI. In the coming years,

millions of nets will need to be replaced once they are

broken or the insecticide has run out. Sumitomo

Chemical has developed a technology to recycle the nets

that could be used for lamp oil.

A to Z Textile Mills Ltd. is fully betting on a

diversification strategy. A new state-of-the-art facility

for the production of cement bags was being installed

in September 2011. The company also looked into

agricultural nettings, textiles and plastic goods. After

all, A to Z was already present in other markets,

including plasticware and bottled water.

The two companies also created a new joint venture in

2011: the Technical Resource Center Arusha. The

research center will have modern technical facilities

and dedicated staff. Sumitomo Chemical and A to Z

will both use the facility for their joint and individual

purposes. A to Z has a high interest in developing

nettings and other products for agribusiness, since

investment is currently flowing into Africa to increase

agricultural productivity. Sumitomo Chemical will

focus research on improving its mosquito net

technology. Since resistance of mosquitoes to

permethrin, the only insecticide currently used, is a

real threat, one main goal is to develop nets with other

types of pesticide.

SUMITOMO CHEMICAL'S ROLE IN THE GLOBAL LLIN ECOSYSTEM

Picture 5.

Empty stitching section at VHI in September 2011

Sumitomo Chemical and the Fight Against Malaria Using Bednets 23

umitomo Chemical entered the market in Tanzania

with the joint venture with the intention to build

local capacity for LLIN production. It took the

opportunity to join forces with A to Z Textile Mills, a

dynamic and already dedicated local company. Tanzania

already had a very established local bednet ecosystem

with local producers and retailers, which had been

carefully cultivated over the years with public support.

Tanzania was also the arena for the global debate among

proponents of free net distributions and those defending

the power of market forces and sales of nets. By entering

Tanzania, Sumitomo Chemical found itself in the eye

of the storm of the rapidly changing ecosystem around

LLINs.

Indeed, Tanzania is a case study in the changing

approaches to bednet delivery and the global public

health landscape that influences it. Over the years,

Tanzania went from a market-based approach to a

publicly led approach. These changes have resulted in

dramatic effects on the national actor ecosystem around

bed nets.

Tanzania is a nation of 44 million people in East Africa.

Malaria is endemic all over Tanzania (see Figure 8).

Malaria is a leading cause of disease and mortality. It

accounts for up to 40% of all outpatient attendance.

The disease kills an average of 80,000 people every year.

60% of these are children under the age of five.

3.1 Beginnings

In the early 1980s, bednets were considered a luxury

product and not a basic health necessity. Coverage was

close to zero. In 1998, public health NGO Population

Services International (PSI) started a multi-year social

marketing campaign to develop a commercial market

for nets, including producers, a system of wholesalers

and retailers, and end customers as the buyers. The

campaign was facilitated by tax and duty exemption for

nets by the government. International donors, above all

DFID, provided funding.

As a luxury product, the government had levied a sales

tax of 125% on bednets. In 1994, ITNs were being

recognized as important tools for malaria control. As a

result, the sales tax was removed on ready-made nets.

Suddenly, nets cost half the price. Consequently, sales

of the only manufacturer at the time, Sun Flag Ltd, rose.

3 Global policies and the local LLIN

ecosystem in Tanzania

Figure 8. Distribution of Endemic Malaria in Tanzania

Source: MARA/ARMA 2002

24 Sumitomo Chemical and the Fight Against Malaria Using Bednets

In order to bring down the price of nets even further,

PSI proposed creating competition in the producer

market. By promising a market and providing

insecticide sachets for free, the NGO convinced

Arusha-based textile company A to Z Textile Mills Ltd.

to start production in 1998. Two more manufacturers

joined the market: TMTL Ltd started manufacturing

in 1999, and Moshi Textile Mills Ltd. joined in 2005.

All of the companies produced simple polyester nets,

which had to be manually treated with insecticide. A

tendering process ensured that all four could get

business, keeping the race for the lowest price going.

Production capacity rose sharply. By 1999, the three

manufacturers produced 5 million nets and exported

to several countries in Africa. Tanzania was the biggest

manufacturer of nets in the region. Stakeholders also

convinced the government to waive value-added tax

on mosquito nets in 1999, and on netting items in

2004. Prices fell from US$ 5 per net in 1995 to less

than $3.5 in 2004.

Nets were also adjusted to

consumer tastes, with a diversity of colors and shapes.

SMARTnet, the strategic social marketing for

expanding the commercial market for nets, was created

as a partnership between the Ministry of Health and

PSI in 2002. PSI identified wholesalers in each region

and linked them to the manufacturers. It provided

subsidies for storage for wholesalers and retailers and

for transportation. More than 20,000 outlets sold

mosquito nets all over the country, even in remote

areas. The campaign provided marketing materials,

such as umbrellas and megaphones. A whole sales

ecosystem was now in place from the manufacturer to

the street vendor at the open air market.

In 2003 and 2004, 3.3 million nets bundled with

retreatment kits were sold. In addition, 3.6 million

retreatment kits were sold. Household coverage

changed from 37% in 2001 to over 50% in 2004.

Household surveys showed that children under five

were given priority to sleep under nets. Thanks to a

far-reaching awareness raising campaign, including

demonstrations in the villages, radio messages and

posters, most people understood why to buy and how

to use a net.

3.2 The Tanzanian National Voucher

Scheme (TNVS)

In 2004, the Ministry of Health and Social Welfare

under the National Malaria Control Programme

initiated the Tanzania National Voucher Scheme

(TNVS). It is also known as “Hati Punguzo” in

Kiswahili, or “death-reducing tool.” The scheme aimed

at creating access to nets for the highest risk group,

pregnant women and infants. A targeted subsidy would

address the persisting equity issue, where despite price

reductions, poor people were unable to afford nets.

TNVS is funded by the Global Fund and the President’s

Malaria Initiative (PMI) and implemented by the

Mennonite Economic Development Associates (MEDA).

PSI is responsible for social marketing.

Phase 1: fixed voucher value

Initially, the voucher provided a subsidy of TShs 2750

(US$ 2.75 in 2004) to retailers. Women and children

could obtain the voucher during examinations at the

hospital or with the local doctor. Nets produced for the

2001 2002 2003 2004 2005 2006 2007

,000,000

2,500,000

2,000,000

1,500,000

1,000,000

500,000

Figure 9. Sales of bednets in Tanzania, 2001-2007

nsubsidised nets

lyset Nets

NVS

Free nets

GLOBAL POLICIES AND THE LOCAL LLIN ECOSYSTEM IN TANZANIA

Source: PSI Tanzania

Sumitomo Chemical and the Fight Against Malaria Using Bednets 25

scheme were specially branded and could not be sold on

the open market. Retailers close to hospitals, such as

pharmacies, could register as vendors for the program.

Depending on how much the retailers thought to gain

as profit, women had to spend between US$ 0.5 and

US$ 1.5 to get a net, including a free insecticide

treatment kit.

The voucher scheme intentionally built on and

strengthened existing market structures. It provided

strong incentives for retailers to stock ITNs. Registered

retailers increased from less than 1,000 in 2002 to

10,000 in 2005. The goal was to have at least one

retailer in each of Tanzania’s 12,500 villages. Sales

figures at the retail and wholesale level increased by 50

to 80%. Four national suppliers produced the nets.

Market-based implementation also ensured that nets

could be delivered quickly through existing wholesale

and retail systems to reach the target group. By 2005,

approximately 80% of the pregnant women in the

TNVS areas were using the voucher to buy an ITN. In

addition, more women came to a clinic during

pregnancy to obtain a voucher.

Phase 2: fixed LLIN price

Yet, the leeway provided to retailers in pricing the net still

resulted in an equity issue: most of the poorest women

did not buy the net. In October 2009, the value of

the discount voucher was increased and the top-up price

of LLINs fixed at Tshs500 (approximately US $ 0.3).

In order to ensure that women did not have to pay more

than the fixed top-up to the retailer, a sophisticated

logistics system was devised. By means of a unique

barcode, each net could be traced along the whole

distribution chain. Only upon presentation of the

voucher and the barcode from the net could the retailer

redeem a new net for free. Retailers just had to pay for

the initial stock of nets, and then were provided with

free nets to replace sold nets. They could keep the TShs

500. The price was displayed prominently on the

package so that women knew that they should not pay

more. In order to implement this system, the voucher

scheme had to collaborate with just one supplier. The

tender went to A to Z, since it was the only local

company able to produce LLINs certified by WHOPES

and it bid the most competitive price. As a result, the

other three producers lost the business of the Tanzanian

market, which eventually led them to leave the market

or file insolvency.

A to Z worked closely together with MEDA to develop

the delivery system. MEDA kept control of the nets sold

through the barcodes. Because nets could not simply be

purchased on the market anymore but needed to be

exchanged for vouchers and barcodes as proof of nets

sold, nets had to be delivered to retailers directly.

Therefore, A to Z built up a whole sales force with more

than 100 employees across the country and invested in

its own fleet of lorries to be able to distribute the nets to

even remote areas in Tanzania. It reached 10,200

retailers in January 2011.

3.3 More programs

Over the years, more programs have been added to

complement the voucher scheme. As malaria was made

a priority of global health policy, more funding became

available on the global level. Reaching the vulnerable

group of pregnant women and children under five was

not seen as sufficient anymore. Led by the success of

malaria interventions in reducing all-cause child

mortality, in 2008 the objective was changed to aim for

universal coverage of LLINs (defined as 80% of the

Picture 6. Mother with LLIN

GLOBAL POLICIES AND THE LOCAL LLIN ECOSYSTEM IN TANZANIA

26 Sumitomo Chemical and the Fight Against Malaria Using Bednets

GLOBAL POLICIES AND THE LOCAL LLIN ECOSYSTEM IN TANZANIA

entire population), and, ultimately, to eliminate malaria.

Researchers had shown that with 80% coverage with

LLINs, the anopheles gambiae population decreases to

almost zero, unless there are cattle around (see Figure

10). In addition, research suggested that giving away free

nets was more effective – both in terms of cost and

usage – than selling subsidized nets. A trial showed that

greater coverage could be achieved with free nets. Since

one net not only benefits the user, but also others in the

community, by killing mosquitoes and slowing the

spread of the parasite, greater coverage outweighed the

added cost.

Finally, providing nets was ranked as one

of the most efficient development interventions available

by the Copenhagen Consensus, a panel of renowned

economists.

No wonder Jeffrey Sachs stated, “We’ll distribute free

nets all over Africa, and we’ll do it again and again.

There’s no reason why markets should be able to handle

this problem.” He flew to Tanzania in July 2008 to

persuade President Jakaya Mrisho Kikwete to adopt a

new plan for free distribution of nets.

Apparently, his

plea was successful. From 2009, a number of free

distribution campaigns have been conducted.

•

The Under-five Catch Up Campaign was implemented

between 2008 and May 2010. It provided a free

LLIN to every child under five. Altogether, more

than 8.7 million nets have been distributed. The

campaign was funded by the Global Fund, the

World Bank, the President’s Malaria Initiative (PMI)

and the United Nations Children’s Fund, with

funding from Malaria No More. Contributions also

came from Swiss Agency for Development and

Cooperation and from the Government of Tanzania.

•

The Universal Coverage Campaign provided free

LLINs to cover all remaining sleeping spaces not

already reached by previous campaigns. The

one-time distribution began in August 2010 and was

rolled out across all 21 regions of mainland Tanzania.

The objective was to cover a minimum of 80% of all

sleeping spaces. It is funded by the Global Fund and

was completed by November 2011. More than 16.6

million nets have been distributed.

Together, $160 million were spent on these two

campaigns. On average, distributing one net cost $7.

VHI also won tenders to supply these campaigns. Along

these distribution campaigns, efforts continue to raise

awareness and increase the use of nets. The figure below

summarizes the various programs and actors involved in

providing ITNs to the Tanzanian population.

3.4 Results

The various campaigns over the years have achieved

good results in terms of coverage. The last Tanzania

Democratic and Health Survey in 2010 found that 72%

of all children under 5 had slept under a net the night

before the survey, and so had 68% of pregnant women,

as shown in Figures 11 and 12. Most of them used

ITNs. In 1999, only 21% of children slept under a net.

According to data from the National Malaria Control

Programme reported by Magesa et al., coverage had

already increased sharply in the years after 1999,

reaching 58% coverage for children and 49% for

0.0

0.2 0.4 0.6 0.8 1.0

0.2

0.4

0.6

0.8

1.0

Figure 10 . Anopheles gambiae with no alternative

hosts, LLINs

on-users

sers

85% protection

Total population ITN usage

Relative exposure EIRc/EIRo

Source: Killeen et al. 2007

Sumitomo Chemical and the Fight Against Malaria Using Bednets 27

pregnant women by 2003. These nets were sold purely

on the commercial market.

It is interesting to note,

even though the two data sets cannot be directly

compared, that coverage rates seemed to have decreased

by 2005, after introduction of the voucher scheme. This

may be due to a variety of reasons, including political

insecurity, budget constraints within the social

marketing activities, or reduced willingness to buy nets

among the population.

Overall, child mortality has decreased in Tanzania. In

2010, 81 children per 1,000 live births died before their

fifth birthday, down from 112 deaths per 1,000 live

births in 2004-05.

Back in 2008, when free distribution of nets started,

there was a debate about who could better deliver

protection for Tanzanians. Jane Miller, then director of

malaria initiatives for PSI in Tanzania, said: “We’ve built

up a system that gets people to appreciate and buy and

look after [bed nets].” She was concerned that the mass

distribution campaign could undercut the commercial

sector for nets that PSI had so carefully helped to

develop. “We’re trying to think more clearly about [what

happens] after the donor money runs out. At the

moment, the donors seem to [be] saying that money is

no object. But it certainly will be in the future.” Brian

Trelstad, chief investment officer for the New

York-based Acumen Fund, added: “We think there will

be opportunities for complementary public free

distribution and stimulation of private channels. People

will need to have access to nets even when the wave of

free distribution ends.”

In the end, the free campaigns turned out to be rather

devastating for the commercial sector. The dense

network of wholesalers and retailers that had evolved by

2008 has all but vanished. Even in the biggest market

area of Dar es Salaam, it is hard nowadays to find a net.

Logistics for the voucher scheme is now exclusively

managed by A to Z. The company delivers nets to

10,000 certified retailers. Free nets are distributed in

mass campaigns through NGOs such as MEDA.

GLOBAL POLICIES AND THE LOCAL LLIN ECOSYSTEM IN TANZANIA

Figure 12 . Percentage of children under 5 sleeping

under a bednet in Tanzania, 1999-2010

Figure 11 . Percentage of pregnant women sleeping

under a bednet in Tanzania, 2001-2010

1999 2001 2003 2005 2008 2010

2001 2003 2005 2008 2010

Other

ITN

Other

ITN

Source: TDHS 2004-5, TDHS 2007-8, TDHS 2010 Source: TDHS 2004-5, TDHS 2007-8, TDHS 2010

28 Sumitomo Chemical and the Fight Against Malaria Using Bednets

Three of the four manufacturers of nets are either out of

business or don’t produce nets anymore. Thanks to a

technology transfer by Sumitomo Chemical, A to Z was

able to produce nets that were certified by WHOPES

and could apply for tender to implement the fixed-prize

voucher scheme. But A to Z also faces difficult times

ahead. To respond to global demand, the company has

quickly ramped up production capacity to 30 million

nets per year and currently employs 7,500 people.

Yet,

by the end of 2011, tenders by the international donors

had become rare, competition had increased and the

order books were empty. The company is now rapidly

diversifying into other activities.

VHI has become a very important player in this local

ecosystem. It is the sole provider of nets to the national

voucher scheme. Some donors even started to worry

that its position was too strong for the local market.

With 7,500 employees, A to Z Textile Mills became one

of Tanzania's largest employers. Yet, the success of the

company depends to a great degree on global policies

which it is unable to influence. While global, local and

corporate priorities seemed to be aligned at one point,

this alignment was lost over time. The global LLIN

campaigns have resulted in good coverage for the

moment, but have been unable to strengthen local

ecosystems that would maintain these high levels. As a

result, Sumitomo Chemical’s effort to build local

capacities and thus strengthen local ecosystems might

after all not reap the social and economic benefits that

were intended.

GLOBAL POLICIES AND THE LOCAL LLIN ECOSYSTEM IN TANZANIA

Figure 13 . Chronological overview of ITN programs and actors in Tanzania

Production Financing

Sales tax on netting

items removed

National Voucher

Scheme started

Under 5 Catch-up

Campaign

Voucher top-up

value fixed to

500TSh

Distribution

1994 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Certified retailers near hospitals 10.200

TMTL Ltd

A to Z Textiles Ltd

Retailers 20.000

Wholesalers

A to Z distribution system

Universal coverage: $ (GF)

SMARTnet

Voucher Scheme

End consumers .3.3 million sold

Moshi Textile Mills Ltd

Sun Flag Ltd

Source: Author

Under 5 Catch-up

Campaign

Universal coverage

Sumitomo Chemical and the Fight Against Malaria Using Bednets 29

reating a market for mosquito nets is a systemic

issue. In countries where malaria is endemic,

people develop immunity to the disease over

time. They may still fall ill, but then they just feel a

slight fever similar to a flu. Yet, they still act as carriers

of the parasite, thus helping to spread the disease

further. In these areas, only small children and pregnant

women generally get severely ill and die from malaria.

People in rural areas and slums are often not aware of

that risk. As long as people are not aware of the reasons

for and risks of malaria, they don’t see the need to use

mosquito nets. Awareness-raising is thus a precondition

for a functional market for nets. This task cannot be

accomplished by net producers, since they are not

perceived to be objective. NGOs and public institutions

need to come in to raise awareness, advocate for

behaviour change, and create the necessary incentives

on all levels, from the consumer to the retails and

producers, to produce, distribute and use nets.

Moreover, malaria prevention is a public health issue.

Even people with very low incomes should be able to

afford a net. Equity is not the only reason. The more

people are protected by nets, especially ITNs, the more

mosquitoes will die from the pesticide. Moreover, fewer

people will carry the parasite and pass on the disease.

Nets thus reduce the prevalence of malaria overall.

These externalities led scientists Cohen and Dupas

to conclude that giving away free nets is more

cost effective than selling subsidized nets, at least

when comparing a one-off distribution of nets.

Consequently, public subsidies are often used as a tool

to reach those who could not afford a net.

Finally, to create access for people even in remote areas,

a network of retailers needs to be established. But

retailers will only stock nets when there is a demand for

them. Hence, production, awareness raising, subsidies

and distribution need to go hand in hand. A

comprehensive ecosystem of players need to collaborate

to bring mosquito nets to all households.

4.1 The boundaries of ecosystems

change

Sumitomo Chemical found itself stretched between the

global and the local ecosystem for LLINs. On the global

level, donors were keen to scale up production and

increase competition for nets. On the local level, the

production partnership with A to Z increased market

power of A to Z to the degree that global donors were

concerned about it. At the same time, local policies

drove other competitors out of the market. Global lack

of funds led to local problems when orders did not

come any more. What was the role for the chemical

company in strengthening this ecosystem?

The case of Sumitomo Chemical’s LLIN activities

points out the limitations for companies in advancing

inclusive business ecosystems. The main lesson from

the developments in the global and Tanzanian market

for LLINs is that

the limit of private action to create

inclusive business ecosystems is defined by the public

sector. Where the public sector has a strong agenda, and

the capacities and resources to implement it, the private

sector should not – and need not – take the lead in

organizing the actors around this issue. Hence, building

inclusive business ecosystems is only required, and will

only work, in a ‘public void,’ where the government is

either not functional or not interested in the specific

issue. Here, private companies play the role of defining

an agenda, and sometimes bring the public sector on

board to create the right framework conditions.

In the case of LLINs, the main challenge in creating a

sustainable inclusive business ecosystem seems to be the

changing political environment. Over the years, the

approach of the public donors to combating malaria

has been changing, from creating local markets to

distributing free nets at a large scale, from malaria

prevention for high-risk groups to elimination. As a

result, the way national governments intervened in the

market has also changed. In the case of Tanzania, the

country had established a functional voucher scheme

that was supplementing social marketing efforts and the

commercial market to reach vulnerable populations.

4 Systemic change approach and limitations

30 Sumitomo Chemical and the Fight Against Malaria Using Bednets

SYSTEMIC CHANGE APPROACH AND LIMITATIONS

The initial version of the voucher scheme stimulated

rather than stifled the commercial market. Then, the

goal to achieve universal coverage called for a quick

scale-up of distribution efforts. Instead of building on

the already existing voucher scheme, the Tanzanian

government opted for free distribution campaigns. Free

distribution has apparently crowded the commercial

retailers out of the market. In addition, public

procurement policies for the free campaigns and the

new voucher scheme with a fixed top-up amount have

left three out of four local manufacturers without

business because they had not developed LLINs and

had no WHOPES certification. A to Z, the remaining

one, is struggling to keep its 7,500 employees on the

payroll. As donor funding is drying up, the problem

becomes how to replace nets once they are worn out. In

this changing political environment, Sumitomo

Chemical could only try to keep up with policy, by

staying in touch with the discussion and adjusting the

own course of action at each stage. Sumitomo Chemical

got its net certified by the WHO, invested for

large-scale production in Africa, and is now looking to

build sustainable commercial markets.

4.2 Combination of structures

But even in situations where the public sector is strong,

companies can play an important role in strengthening

the ecosystem, within the boundaries of the political

framework. Sumitomo Chemical seeks to advance the

ecosystems for LLINs with a variety of models. In fact,

it employs all three structures identified in the

background paper for strengthening inclusive business

ecosystems: private initiative, project-based alliances,

and platforms.

Private initiative

The company takes this private initiative above all to

position itself as a responsible “corporate citizen” and

make its contribution to society tangible. Sumitomo

Chemical provided its technology royalty-free to A to Z

Textile Mills in order to build local production capacity

for the nets that would mainly be used in Africa. It thus

helped to bring another player into the picture that

might not have been able to participate otherwise, and

created jobs and income opportunities in Tanzania. It

continues to invest in research and development around

malaria vector control, into state-of the art production

facilities and into the creation of commercial markets.

In Kenya, the company has started an initiative to

market Olyset Nets like any other consumer product

through supermarkets and other sales channels. The

hope is that this pilot project can work because Kenyan

consumers are already aware of the benefits of using

nets, and have a higher income on average than in other

countries in sub-Saharan Africa. Sumitomo Chemical

also participates in the global dialogue around vector

control, adding its expertise and corporate perspective.

Project-based alliance

Together with A to Z, Sumitomo Chemical has created

a new company, VHI, to manufacture nets in Tanzania.

In the contract to set up this joint venture, the partners

agreed on clear objectives and tasks. Day-to-day business

is managed by A to Z. A representative of Sumitomo

Chemical visits the Arusha site for several weeks every 4

months to control quality and supervise the

implementation of new projects, like the new recycling

machine. Strategic decisions are being taken jointly. The

collaboration has not been without frictions, since the

modus operandi of a Japanese global player and an

Indian family business in Africa differ significantly. Still,

the partners have expanded their collaboration recently

with a new technical research facility.

The partnership was initially facilitated by a consortium

of partners. While Acumen Fund provided grants and

loans to set up the new technology and expand the

factory, ExxonMobil, UNICEF, and WHO had no

ownership stakes in the project. Their role was to

conceptualize the partnership, create a vision for it, and

drive it towards implementation by creating a

blueprint. They stepped out once the concept for the

local manufacturing was clear. Project-based alliances

can be very short term, informal and immaterial. They

can simply serve as spaces to catalyze new ideas and

reorganize the player landscape.

Sumitomo Chemical and the Fight Against Malaria Using Bednets 31

Sumitomo Chemical also works in other project

based-alliances, such as with Malaria No More or the

Royal Commonwealth Society, to raise awareness for

malaria protection. In these classic public-private

partnerships, partners implement a clearly structured,

time-limited project with clear responsibilities.

Platform

Finally, Sumitomo Chemical is involved in the global

issue platforms, such as the Global Fund. There, it

articulates its concerns, from tendering policies to

resistance and recycling, and influences the public

debate. For example, in 2011 the company flagged the

issue of longevity of nets to the UN Special Envoy for

Malaria, the RBM Executive Director and the WHO

Global Malaria Program leadership: WHOPES is a

minimum standard and assumes that all nets last only

3 years. Polyethyelene and polypropylene nets have

been proven to last much longer, but this difference is

not acknowledged in common tendering practices. As

a result, the issue of value for money in the bednet

market’ has become a focus within the community. A

series of technical meetings is underway, and

recommendations are being prepared for the Global

Fund Market Dynamics Advisory Group (MDAG) to

address durability issues in 2012. Finally, Sumitomo

Chemical used the existing global platforms around

malaria to participate in the ongoing discourse in

effective approaches to malaria prevention.

4.3 Lessons learned

Sumitomo Chemical maintains an ongoing commitment

to strengthening the LLIN ecosystem. However, the

company still suggests that it needs to learn how to

navigate the complex LLIN ecosystem better. Signing

up to the global framework of RBM and the

commitment to the local project-based alliance VHI in

Tanzania sometimes created friction. How can the

company balance the demands of global and local

stakeholders? The company has scaled up production

in Tanzania responding to urgent donor needs for more

nets. Now, as demand is dwindling, it feels a

responsibility towards the 7,500 employees at VHI.

While Sumitomo Chemical is purely dedicated to

vector control efforts with VHI, A to Z Textile Millss

sees itself primarily as a plastics producer, and is

diversifying into many other sectors. How can the

different interests of partners be aligned under the joint

venture?

The case study shows that combining structures for

strengthening ecosystems is not without challenges.

Though the diverse stakeholders and frameworks may

be aligned at one point in time, alignment can be lost

over time as framework conditions change. In particular

where public policy changes rapidly, it can be tough for

private companies to keep track and change structures

and activities as quickly. Insecurity in the political

environment makes it hard for companies to invest in

inclusive business ecosystems, since policy changes can

render these investments worthless.

The case poses questions for companies. To what degree

is private initiative for strengthening inclusive business

ecosystems dependent on public policy and the

frameworks created by global issue platforms? And if

there are strong dependencies, how reliable are these

broader frameworks and how is the private initiative

affected when these frameworks change?

The case study also poses questions to players from

development organizations. For example, it may be

worth reconsidering the process of supporting

individual companies through grants or technology

transfers. Would it be preferable to organize such

support through competitive processes that provide

access to such benefits to more than one company?

Moreover, it seems that donor programs that rely on

the procurement of large amounts of goods can have a

significant positive impact on local economic

development. A to Z Textile Mills became the biggest

private employer in the Arusha region. On the other

hand, halting procurement processes can have a

detrimental impact on such local companies. Revising

procurement policies to support local economic

development is now best practice among donor

SYSTEMIC CHANGE APPROACH AND LIMITATIONS

32 Sumitomo Chemical and the Fight Against Malaria Using Bednets

SYSTEMIC CHANGE APPROACH AND LIMITATIONS

agencies. The World Food Programme bought 80% of

the US$ 1.25 billion worth of food commodities it

procured in developing countries. Procuring other

goods and services locally may require donors to join

forces with the private sector to build capacities and

transfer technologies, as has happened in the example of

VHI. Companies can help to strengthen these local

inclusive business ecosystems by making donors aware

of the benefits of local production and by collaborating

with companies in developing countries, as Sumitomo

Chemical has been doing.

The case study of Sumitomo Chemical and the LLIN

market highlights the challenges of strengthening

ecosystems through private initiative, but also shows its

potential. Technology transfers and the accompanying

capacity building can lift local companies in developing

countries into the league of global players, creating

employment and economic opportunity. By providing

evidence of the positive impact of such initiatives,

companies can make the case to public agencies to

revise their procurement policies and support similar

initiatives. Sumitomo Chemical has now started to get

more engaged in discussions with donors about these

issues. The example of VHI may well influence donors

approach the procurement of LLINs and other goods in

the future.

Sumitomo Chemical and the Fight Against Malaria Using Bednets 33

Appendix A: Interviews

In alphabetical order by surname:

Lisa Goldman, Sumitomo Chemical

Pierre Guillet, VHI

Godfrey Kalagho, Ministry of Health and Social Welfare

Scott Mitchell, Sumitomo Chemical

Tatsuo Mizuno, Sumitomo Chemical

Nathan Rawe, PSI

Dr. Romanus Mtunge, PSI

Ken Nakanishi, Sumitomo Chemical

Divyesh Ramanandi, A to Z Textile Mills Ltd.

Kalpesh Shah, A to Z Textile Mills Ltd.

Appendix B: Literature

Abuja Declaration on Roll Back Malaria in Africa. 2000. Africa

Summit on Roll Back Malaria. Available at

www.ihn.info/popups/articleswindow.php?id=40.

All-Party Parliamentary Group on Malaria and Neglected

Tropical Diseases (APPGMNTD) (2011) “The Control of

Malaria 2005-15: progress and priorities towards

Eradication.”

Armstrong-Schellenberg, Joanna R M, Salim Abdulla, Rose

Nathan, Oscar Mukasa, Tanya J Marchant, Nassor

Kikumbih, Adiel K Mushi, Haji Mponda, Happiness Minja,

Hassan Mshinda, Marcel Tanner, Christian Lengeler (2001)

“Effect of large-scale social marketing of

insecticide-treated nets on child survival in rural Tanzania.”

Lancet 357, p. 1241–47.

Barclay, Elisa (2008) “Charity vs. Capitalism in Africa.”

Businessweek January 2, 2008.

Bernard, Jubilate, George Mtove, Renata Mandike, Frank Mtei,

Caroline Maxwell and Hugh Reyburn (2009) “Equity and

coverage of insecticide-treated bed nets in an area of

intense transmission of Plasmodium falciparum in

Tanzania” Malaria Journal 2009, 8:65

Bonner, Kimberly, Alex Mwita, Peter D McElroy, Susan Omari,

Ally Mzava, Christian Lengeler, Naomi Kaspar, Rose Nathan,

Joyce Ngegba, Romanus Mtung’e, and Nick Brown (2011)

“Design, implementation and evaluation of a national

campaign to distribute nine million free LLINs to children

under five years of age in Tanzania.” Malaria Journal 10:73

Butler, Declan (2011) “Pyrethroid Insecticides are Losing Their

Edge Against Malaria.” Nature 475, 19 (2011)

Case Studies for Global Health (2009) “NATNETS Succeeds in

Controlling Malaria in Tanzania With Effective Public,

Private and Nonprofit Partners.”

Cohen, Jessica and Pascaline Dupas (2010) “Free Distribution

or Cost-Sharing? Evidence from a Randomized Malaria

Prevention Experiment.” Quarterly Journal of Economics

125(1), pages 1-45

Ito, Takaagi and Takeshi Okuno (2006) “Development of Olyset

net as a Tool for Malaria Control.” Sumitomo Kagaku (R&D

Report) vol. 2006-II

Jennings, Michael (2011) “Economic Impact of Local

Manufacturing of Bednets – A Survey.” London: School of

Oriental and Asian Studies.

34 Sumitomo Chemical and the Fight Against Malaria Using Bednets

Appendix B: Literature continued

John, Devotha (2010) ”Tanzania: Malaria Costs Dar Sh157

Billion Annually.” The Citizen, 14 April 2010.

Karugu, Winifred and Triza Mwendwa (2008) “A to Z Textile

Mills: A Public Private Partnership Providing Long-Lasting

Anti-Malaria Bed Nets to the Poor.” New York: UNDP

Growing Inclusive Markets Initiative.

Khatib, Rashid A, Gerry F Killeen, Salim MK Abdulla, Elizeus

Kahigwa, Peter D McElroy, Rene PM Gerrets, Hassan

Mshinda, Alex Mwita and S Patrick Kachur (2008) “Markets,

voucher subsidies and free nets combine to achieve high

bed net coverage in rural Tanzania.” Malaria Journal 2008,

7:98.

Killeen, Gerry F., Smith, Tom A., Ferguson, Heather M., Mshinda,

Hassan, Abdulla, Salim, Lengeler, Christian and Steven P.

Kachur (2007). “Preventing Childhood Malaria in Africa by

Protecting Adults from Mosquitoes with

Insecticide-Treated Nets.” PLoS Medicine

Magesa, Stephen M, Christian Lengeler, Don deSavigny, Jane E

Miller, Ritha JA Njau, Karen Kramer, Andrew Kitua and Alex

Mwita (2005). “Creating an ‘enabling environment’ for

taking insecticide treated nets to national scale: the

Tanzanian experience.” Malaria Journal 2005, 4:34 .

Marchant, Tanya, David Schellenberg, Rose Nathan, Joanna

Armstrong-Schellenberg, Hadji Mponda, Caroline Jones,

Yovitha Sedekia, Jane Bruce, and Kara Hanson (2010).

“Assessment of a national voucher scheme to deliver

insecticide-treated mosquito nets to pregnant women.”

Canadian Medical Association Journal 182(2).

Mulligan, Jo-Ann, Joshua Yukich and Kara Hanson (2008).

“Costs and effects of the Tanzanian national voucher

scheme for insecticide-treated nets.” Malaria Journal 2008,

7:32.

National Bureau of Statistics (NBS) Tanzania (2005) “Tanzania

Demographic and Health Survey 2004-2005.”

National Bureau of Statistics (NBS) [Tanzania], Ministry of

Health and Social Welfare [Tanzania], and Macro

International Inc. (2006). “Tanzania Service Provision

Assessment Survey 2006: Key Findings on Family Planning,

Maternal and Child Health, and Malaria.” Dar es Salaam,

Tanzania: National Bureau of Statistics and Macro

International, Inc.

National Bureau of Statistics (NBS) Tanzania (2011) “Tanzania

Demographic and Health Survey 2010.”

Rodriguez, William and Kileken ole-MoiYoi (2011) “Building

Local Capacity for Health Commodity Manufacturing: A to

Z Textile Mills Ltd.’ Harvard Medical School.

Roll Back Malaria Partnership (2008) “The Global Malaria Acion

Plan for a Malaria-free World.” Geneva: WHO.

Roll Back Malaria Partnership (2011) “Eliminating malaria:

learning from the past, looking ahead.” Geneva: WHO.

Tanzania Commission for AIDS (TACAIDS) Dar es Salaam,

Tanzania, Zanzibar AIDS Commission (ZAC) Zanzibar.

National Bureau of Statistics (NBS) Dar es Salaam, Tanzania,

Office of Chief Government Statistician (OCGS) Zanzibar

and Macro International Inc. (2008) “Tanzania HIV/AIDS and

Malaria Indicator Survey 2007-08.”

The Global Fund to Fight Aids, Tuberculosis and Malaria (2011)

“Annual Report 2010.” Geneva: WHO.

WHO (1974) “Malaria Control in Countries where Time-limited

Eradication is Impracticable at Present: Technical Report

Series 537.” Geneva: WHO.

WHO (2011) “WHO Global Malaria Report 2010.” Geneva: WHO.

Sumitomo Chemical and the Fight Against Malaria Using Bednets 35

Appendix C: List of abbreviations

ACT Artemisinin-based Combination Therapy

EO Chief Executive Officer

DDT Dichlorodiphenyltrichloroethane (insecticide)

DDP/DDU Duty Paid/Unpaid

FOB Free off board

Global Fund Global Fund to Fight AIDS, Malaria and Tuberculosis

IRS Indoor Residual Spraying

ITN Insecticide-Treated Net

LLIN Long-Lasting Insecticide-Treated Net

NGO Non-governmental organization

PMI President's Malaria Initiative

RBM Roll Back Malaria Partnership

UNDP United Nations Development Programme

UNICEF United Nation’s Childrens Fund

WHO World Health Organization

WHOPES WHO Pesticide Evaluation Scheme

36 Sumitomo Chemical and the Fight Against Malaria Using Bednets

. Quoted in Barclay 2008

2. WHO 2011

3. WHO 2011

4. WHI Malaria Factsheet

(http://www.who.int/mediacentre/factsheets/fs094/

en/index.html)

5. WHO 1974

6. This brief history is based on Rodriguez, William and

Kileken ole-MoiYoi 2011

7. Roll Back Malaria website

(http://www.rbm.who.int/rbmmandate.html)

8. WHO 2011

9. APPGMNTD 2011

10. WHO 2011

11. RBM 2011

12. WHO 2011

13. Rodriguez 2011

14. Rodriguez 2011

15. WHO 2011

16. The exact efinition of the target measure for “universal

coverage” has been adjusted over the year 2010, from

“sleeping places covered” to “resources identified”.

17. WHO 2011

18. WHO 2011

19. Butler 2001

20. Butler 2001

21. Olyset Net website

(http://www.olyset.net/resourcecenter/news/020808/)

22. Encyclopedia Britannica website

(http://www.britannica.com/EBchecked/topic/573265/

Sumitomo-Group, http://www.sumitomo.gr.jp/english/

history/ history/index.html)

23. Ito and Okuno 2006

24. Quoted in Rodriguez and ole-MoiYoi 2011

25. NBS 2011

26. John 2010

27. Magesa et al. 2005

28. Magesa et al. 2005

29. Magesa et al 2005

0. The question arises: why none of the other producers in

Tanzania acquired the capacity to produce LLINs? Did they

not have the capacities to step up production? Did the

support A to Z received by Acumen and Sumitomo Chemical

create an unfair advantage that competitors were not able to

emulate?

Likewise, it would be interesting to understand why the

donor community did not build on the example of the

Sumitomo Chemical / A to Z joint venture, which received

international acclaim, to support other companies in Africa in

taking up LLIN production. By creating competition among

local producers, donors could have escaped the dilemma of

being unable to support local procurement and not create an

unfair advantage. These questions deserve further inquiry.

31. Natnets website

(http://www.natnets.org/index.php/natnets/partners/private

-partners/23-wholesalers-and-retailers.html)

32. Cohen and Dupas 2010

33. Copenhagen Consensus website

(http://www.copenhagenconsensus.com/Projects/Copenhag

en%20Consensus%202008/Outcome.aspx)

34. Barclay 2008

35. Magesa et al 2005

36. TDHS 2010

37. Barclay 2008

38. Jennings 2011

39. Cohen and Dupas 2010

40. For more detailed accounts of the partnership between

Sumitomo Chemical and A to Z Textiles, see, for example,

Karugu and Mwendwa 2008 and Rodriguez and ole-MoiYoi

2011.

Appendix D: Endnotes

Sumitomo Chemical and the Fight Against Malaria Using Bednets 37

Christina Gradl has spent more than ten years researching

and advising companies on CSR, sustainable development,

and inclusive business. She is a fellow of the Corporate Social

Responsibility Initiative at the Harvard Kennedy School and a

a strategic advisor to the UNDP Growing Inclusive Markets

Initiative. She is also a founder and managing director of

Endeva, an independent research and consulting institute

working towards enterprise solutions for development.

Christina has co-authored more than ten publications on

inclusive business. With Beth Jenkins, she wrote the UNDP

report “Creating Value for All: Strategies for Doing Business

with the Poor.” In collaboration with the German Federal

Ministry for Economic Cooperation and Development and

GIZ, she developed, inter alia, the "Inclusive Business Guide."

Besides a focus on the energy, insurance, and agribusiness

sectors, Christina is particularly interested in the ecosystems

of various players, their individual contributions and their

collaboration, that make inclusive businesses work.

Currently, Christina completes a PhD in economics and

business strategy on the business model concept. She holds

an MSc in Philosophy of Public Policy from London School of

Economics and a Masters degree in International Business

and Regional Studies from the University of Passau, Germany.

She was the Kofi-Annan-Fellow on Global Governance

2006/07 and an associate with McKinsey & Company.

The Corporate Social Responsibility Initiative (CSRI) at the

Harvard Kennedy School’s Mossavar-Rahmani Center for

Business and Government (M-RCBG) is a multi-disciplinary

and multi-stakeholder program that seeks to study and

enhance the public contributions of private enterprise.

The initiative explores the intersection of corporate

responsibility, corporate governance, and public policy, with

a focus on analyzing institutional innovations that enhance

governance and accountability and help to achieve key

international development goals. It bridges theory and

practice, builds leadership skills, and supports constructive

dialogue and collaboration among business, government,

civil society and academics. Founded in 2004, the CSR

Initiative works with a small Corporate Leadership Group

consisting of global companies that are leaders in the fields of

corporate responsibility, sustainability or creating shared

value. The group currently consists of the following

companies: Abbott Laboratories; AbbVie; Chevron; The

Coca-Cola Company; ExxonMobil; Intercontinental Hotels

Group; Microsoft; Nestlé; SAP; Unilever; and Yara. The Initiative

also works with other leading CSR and sustainability

organizations, government bodies, nongovernmental

organizations and companies to leverage innovative policy

research and examples of good practice in this field.

About the Author

About the CSR Initiative at the

Harvard Kennedy School

38 Sumitomo Chemical and the Fight Against Malaria Using Bednets

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CSR Initiative

Harvard Kennedy School

79 John F. Kennedy Street

Cambridge, MA 02138

USA