Kaset Thai International Sugar (KTIS) Corporation introduced Farmvestment, an award-winning business model from United Nations’ Social Enterprise Conference (SECON) 2018, aiming to obtain more profit and improve society, announced Mr. Sirapat Siriwiriyakul, one of the 4th generations of the biggest sugar manufacturer in Thailand.
“The reason why we won the award is because our idea is practical and impacts the public widely as the model may be able to help 1,000 farmers to earn more. Besides, it reflects the mindset of KTIS’ young executives who have been concerned with agriculture since the older generations. Such was an inspiration for the model,” said Mr. Sirapat.
Changed Business Affects Society
SECON is a competition of business plans in the form of social enterprise with an objective to solve social problems or develop a society, local community or environment of the participants’ interest and expertise. It does not focus on details, but emphasizes on concepts, ways of thinking and wide impact on the public. The participants were supposed to complete the business plan within 4 or 5 hours.
The event specified a group of participants, all of whom obligatorily come from public and private sectors as well as an NGO. In terms of the participants for the Farmvestment, the group members belong to Thailand Development Research Institute (TDRI), the UNESCO and a private consultant company.
The Farmvestment functions as an on-line market for selling and purchasing agricultural products in advance. It starts by seeking for local agricultural communities to take part in the project. Then, the participating communities will be trained and given some investment budget from consumers in the similar form to cloud funding via an on-line application.
Initially, a couple of fruits including strawberry were chosen as a pioneer which consumers could place an order. For instance, they could pay 1,000 Baht for 4 kilograms of fruit. Even though the price does not differ from the one of a product stall, what consumers will get is organic and chemical-free products directly from the sellers. Doing so will help local farmers to earn 50% more income thanks to no interference of middlemen.
“The objective of our model is clear. It does not emphasize on high profit, but more income of local farmers and social and environmental interest. The social enterprise is the right answer that assists local communities, environment and society while business companies can sustain themselves and social inequality is reduced,” addressed Mr. Sirapat.
In addition, the company has for the past two years invented an environmentally friendly package made of bagasse to promote the world saving under supervision of the subsidiary EPPCO. The main target group is in Europe and America, where environment is of high concern, apart from China and Thailand, where healthy packages are becoming important.
Similar to European and American markets, Thailand’s organizations are formulating a ban against plastic use. This is a good opportunity for an alternative and environmentally friendly product for consumers.
More Product Line to Minimize Risks
As a new executive, Mr. Sirapat said that the future goal for KTIS’ brands would not stop at sugar, but more products. At present, the company is gaining around 20,000 million Baht, the major proportion equivalent to 70% of which came from sugar. So, challenges for executives of the Y generation are added values for non-sugar products.
Because sugar business makes little profit and suffers from much instability, many problems and limitations, particularly increasing areas of sugar cane plantation, non-sugar products should be concentrated by topping up by-products made of sugar, such as plates or bowls made of bagasse, clean energy, vitamin or calcium added sugar, among others. However, market surveys and business possibilities should be carried out beforehand.
“In the next 2 years, a start-up business will probably be spin off by inviting creative people to work with us. The organization structure of the company may be different from now, but it will be able to strengthen the existing business in the form of topped-up agricultural by-products for sustainability. As they are high value innovations, they can function as raw materials for skincare, cosmetic or bioplastic products,” concluded Mr. Sirapat.