Kebitigollewa Social Enterprises

1. Even if farmers in the local area who cultivate rice are not being able to buy the milled rice due to its high price that is fully controlled by the big rice millers who have a monopoly power. 

2. Providing reliable milled rice products with a reasonable price through construction and operation of a micro rice milling plant which produces the rice products whose quality is equal to that of the big rice milling companies.

3. The spread of our solution would contribute to rationalization of the rice market, which means that the price of the milled rice is not fluctuated only for the sake of the large milling companies especially in less developed countries where the monopoly market tends to be formed easier without any legitimate competition.

Local rice farmers in Kebithigollewa, Anuradhapura, North Central Province of Sri Lanka are having a lack of nutrition because they cannot afford to buy rice products of high quality due to its high price. The reasons for the high price are the existence of the monopoly power that the big millers have and a lack of the existence of small millers that are willing to sell their products with the reasonable price due to a lack of the government support in the local area and the challenges the small millers face against the big millers.

Milling costs for our rice products are lower than those of the big millers because construction and operation costs are lower than the big milling plants. We also have a support from the local government to lease a plant site with a low fee since we are an officially registered social enterprise. The low margin caused by our fair pricing policy can be covered by the margin that the company gets through various services (milling service, dryer rental service for other kinds of crops) that the company provides in offseason of rice.

Good Neighbors Sri Lanka (GNSL) is the NGO achieving its goals by supporting child protection and community development. Kebitigollewa is one of our project site. GNSL has a community resource center in the town. GNSL learned about the difficulties of local rice farmers during conducting our projects, and began to consider how to solve these difficulties, and then founded a social enterprise that operates a small rice mill.
With our rice plant, the local farmers will be fully nourished and also increase their disposable income which they could use for their children education, health care, etc.

Our direct beneficiaries are rice farmers in Kebitigollewa town. We found that rice farmers were unable to consume rice despite growing it. Therefore, it is our role to establish and operate a business model so that  Kebitigollewa rice farmers can consume rice refined through small rice mills.

Our rice milling business builds a close and long-term relationship(this would be the business concept that the more the customers buy the products of the company, the more benefits(cheaper price compared to the case when they buy from the big millers, recognition of more value for their paddy products) they would get in return from the company) with customers through various purchase options that the customers can select such as;

1) Annual milled rice subscription model that guarantees a fixed price(at least the same price announced by the government)

2) Local farmers receive a coupon in exchange of x% of the paddy they sell to KSE. With this coupon, they are able to buy the same kilos of milled rice. The rest of the paddy (xx%) they sell to KSE, they receive cash in return. (Normally the value of the milled rice per kilo is twice as expensive as the value of the paddy per kilo)

3) Providing a free purchase coupon (a coupon with which a recommender can purchase xx kg / a coupon is given to a recommender per one new customer that actually buys KSE products) for local farmers that introduce new customers to KSE.

4) Providing a rice milling service for customer (local farmers) that wish to bring their own paddy and make their paddy processed by the KSE's plant through paying a certain amount of processing service fee to KSE

There will be no remarkable innovative technology in the small rice mill. However, in areas without infrastructure, a tiny machine can affect many people.

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We want to create an environment where rice farmers who have difficulty eating rice can eat rice. We will run a small rice mill with funds to help local farmers enjoy nutritious meals. Rice made in this rice mill is also sold in the general market, but is sold in many ways for local farmers. Even if you don't have cash right now, you can exchange the cultivated rice to the milled rice. In order to provide high quality rice for sustainable management, the rice plant will allow local farmers to receive rice cultivation education in Korea for those who have purchased a lot of KSE products or who have supplied a lot of rice to KSE. Korea is one of the top-notch rice-growing countries with rapid economic growth since the 60s. Through the farmers' education, KSE will be able to receive high quality rice and send that much good quality rice to the market.

Now we are on the progress in establish a social enterprise company. Therefore we serve 0 people right now, but we will recruit local staffs for five within one year, and the direct and indirect beneficiary will be expand to over 20,000 people within five years. 

KSE dreams the future that all rice farmers in Kebitigollewa town can be buy and eat milled rice whenever they want to. Also, KSE will focus on how to serve a quality milled rice to the town.

All entity should be able to cover the salaries of its employees with at least the profits from its activities. There is a financial concern about how to maintain the status of a sustainable local social enterprise through the operation of the KSE. Also, there will be maintenance technology and cost of the rice mill. In particular, as environmental pollution intensifies, mycotoxin is detected in almost all grains, which will be the same for rice in Kebitigollewa town. Additional special equipment to remove mycotoxin should also be considered in the management of the company. Sri Lanka's president will take office for a six-year term. With the election of a new president in November 2019, the benefits currently being provided by local governments to social enterprises are expected to continue for at least five years. Rice is a must of Sri Lankan people, so it is very sensitive to the market's impact. Additional storage facilities will also be needed for stable rice supply and rice supply.

We will propose a purchase method that satisfies consumers through various sales strategies. These sales strategies present a virtuous cycle of consumption patterns in which it is good for consumers to produce high-quality rice by making a structure that can benefit not only consumers but also farmers who produce paddy, and the more consumers buy, the higher the company's profits are, the higher the profit is, the more the rice farmers can return. KSE will actively apply when there are external fund opportunities to invest in such profitable and expensive device equipment. The technical part will be consulted and helped in collaboration with the Korea Institute for agriculture.

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I am working with the Social Enterprise team of Good Neighbors Global Impact Foundation (GNGIF) with three full-time staff in S. Korea. We have a branch in Sri Lanka that is Good Neighbors Sri Lanka. 

My team; Social Enterprise team in GNGIF; is a team that develops and establishes strategies for how to solve problems received by Good Neighbors Partnership Country (GNPC) from a social-economic perspective. It consists of a total of four members, one team leader, one management expert, one energy expert and one agricultural expert. I am an expert in agriculture. Also, our biggest driving force is local staff in each country. Through them, we can identify the problems that are issued in the business area.

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1. Product selling (Coupon, Rice for milled rice, etc) 

2. Milling service 

3. By products selling 

4. Rice cultivation quality control service by Korea government institute for agriculture

The KSE will initially start with the GN budget, but will make it self-sustaining through profits from the company's operations, and equipment with relatively large budgets will be supported through social economic fund investment sources.

This is the first time for the KSE to apply for a fund program. The reason for applying is that Grant Fund is needed in the early stages of the company's founding, and there are parts that we want to recognize the definition of social and economic projects we are doing through MIT SOLVE. I think it's fortunate that the fund program that I'm applying for the first time is SOLVE. Because I could learn to be more logical about the pitch of business by answering the questions in the Solve proposal. I could learn about social economy effectively through lectures provided through edx.

KSE need to seek additional fund due to limited budget from NGO. Rice milling is common skill with a machine. However, company has to change or purchase another mills due to varieties and a technological advance. It would help KSE to provide excellent quality of milled rice. 
Also, for sustainable business, KSE has to devise a strategy for marketing. 

KSE is a small rice mill that will consist of locals without experts. For this reason, if KSE has the help of experts or professional organizations at steps, it will be very helpful for KSE operation.

Step 1. Fund Provider

A rice mill is a business that requires a lot of initial investment capital for equipment and construction. Because it is a small mill, the cost is small compared to a large RPC, but there is a certain amount of cost, but there is a need for a partner who can supplement the amount and secure the business review.

Step 2. Rice mill equipment operation

The mill is a device that requires regular maintenance. For post-polishing care, advice from skilled technicians is required.

Step 3. Sales strategy advice 

Since it is a project organized by NGOs with no business experience, expert advice on marketing strategies or sales strategies for sustainable management is essential.