Tiny social enterprise aims big

Nanum Mill is a tiny rice-cake maker employing only nine people and earning 130 million won ($116,000) in sales. But all in the shop are proudly committed to their goal ― setting an example of how public, private and social sectors can work together to alleviate poverty and cure social ills.

The company in Seoul was launched in 2010 with government subsidies and philanthropic support from various institutions. Its revenue has jumped 100 percent each year and employees nearly doubled for the past three years.

“Nanum Mill is the perfect example of how all members of society can come together and contribute to rehabilitation,” manager Oh Sang-rok told The Korea Herald.

It has two lofty missions, the 36-year-old manager said. One is making tasty and affordable rice cakes. The other is providing jobs and sense of responsibility to impoverished people who would otherwise have been left to the hands of charities and state welfare programs.

Nanum Mill is one of a growing number of social enterprises, which aim to create jobs for the poor, elderly, disabled and socially vulnerable through for-profit corporations.

About 830 social businesses are currently in operation across the country hiring some 19,000 workers.

The government is striving to foster such ventures as part of sustainable welfare systems. The Ministry of Employment and Labor aims to increase the number to 3,000 by 2017 and expand support throughout their business cycle, from start-ups, marketing and sales strategies to financial consulting.

The company has come a long way since its humble beginnings. A rice cake maker in Gangwon Province offered production skills. A circle of students majoring in design provided their brand “Talk to Me” and their logo.

After three years of rapid growth, the company recently began to ship its rice cakes to the U.S.

For Oh, 2013 is a make-or-break year. The Ministry of Health and Welfare and Seoul City government provides subsidies to social enterprises only for the first three years. Nanum Mill must stand on its own beginning in 2014. Oh’s goal for this year is to record 300 million won in sales and break even.

“It’s important that we start making profit this year. Until now, the mill was a program subsidized by the government. Beginning next year, we will become a company in our own right,” Oh said.

Nanum Mill’s main motto is to be competitive. Unlike some other social enterprises, Oh does not rely on prioritized purchases from government offices. Instead, he emphasizes innovation to provide tastier and affordable products that can compete in the market. Over half of its sales are from regular customers, not government offices.

The mill accepts anyone who is willing to work. A background in cooking is not required and the retirement age is 65. Despite social prejudice against those under the poverty line, his workers are industrious quick learners, according to Oh.

“I hope we can continue to provide impoverished people with a stable job and salary, so we can help more people rehabilitate,” he said.

By Lee Sang-ju (sjlee370@heraldcorp.com)