Case Introduction

4.1.2.1. Lao Disabled Women’s Development Centre

Lao Disabled Women’s Development Centre was founded in 1990 as a sewing group

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in the home of the director, Madam Chanhpheng Sivila. She is also a disable woman due to contracted Polio at age of 3. In 2002, for raising more awareness the Lao Women with Disabilities group became the Lao Disabled Women’ Development Centre officially. It is a non-profit organization, and the centre believes that everyone has unique abilities because everyone is different. She is also a strong supporter for the fundament of this center. In this country it is easier to discuss with government if you have some kind of connection with them, and Chanhpheng’s family support this centre a lot. In the beginning, the land where the centre located now is offered by Laos government and funding was come from Japanese International Corporation Agency and Okinawa Colony. The mission of this centre is to empower women to engage their abilities through providing access to education and employment. For this mission the Center works with the government of Lao People's Democratic Republic and other partners (such as The overarching goal of Cooperative Orthotic and Prosthetic Enterprise or Association for Autism in Laos) In addition, for encouraging the understanding and acceptance of people with disability in mainstream society the Centre’s activities are divided into two separate yet equally important parts. The first part is to create practical opportunities for disabled people through vocational training and life skills training. The Centre empowers individuals by facilitating understanding of their abilities and supports them by creating a peer support. The second part is to be an active advocate for the rights, recognition and equal opportunity of disabled women by promoting awareness.

Since 2002, the centre has delivered vocational training to more than 400 disabled women around Laos. It provides training in sewing, weaving, handicrafts, computers, healthcare, small business skill, and English. These offered training as part of a nine month comprehensive training program at the centre and as short courses run in different locations throughout Laos. Each year up to 30 new students undertake the comprehensive training program and live at the centre during this time.

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Nowadays Lao Disabled Women’s Development Centre still receives funding from many INGOs and foreign governments. But for reducing the reliance on donation and getting more independent or sustainable, the program of social enterprise model has been developed.

Revenue streams of the centre come from the several source below.

1) Handicrafts selling: Handicrafts and textiles produced in the centre open to the public.

(basically foreign tourists)

2) Centre tours: To transform the centre to become a tourism factory and the employees can introduce the center for tourists for practicing their English ability.

3) Project: With the demand for traditional Laos handicrafts getting increased and Vocational training as a main activity in the centre. Some of businessmen hope the centre can teach them more skilled artisans for fulfilling the market demand.

4) Others (Mushroom cultivation, the skill donated from NPO in Canada

4.1.2.2. FairTrade Laos

Fair Trade is a social movement initiative since 1960, and it has been trying to establish trading partnership, based on dialogue, transparency and respect, all these seek greater equity in international trade. It contributes to sustainable development by offering better trading conditions, and securing the rights, marginalized producers and workers, especially in the South. More important things are that consumers can use this powerful way to reduce poverty through their everyday shopping. Based on this idea, Fair Trade Laos was created in 2008 by a small group business people and NGOs, and they considered social and economic viability of Fair Trade can improve producers and farmers’ lives and concurrently offering high-quality products.

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In the beginning, Fair Trade Laos has been trying to promote the ideas and concept of Fair Trade in Laos and empower small scale producers on their efforts to combat with poverty, strengthening their economic position with Fair Trade product distribution both inside and outside Laos. Over the years, Fair Trade Laos has gradually adjusted the proportion of revenue for trying to reduce the reliance from donation. For this goal, they have applied enterprise permission to replace temporary license of NPO issued in 2008. Because government forbidden NPO to sell service like certification or consultancy. However verification executed by government is very slow, due to the officials do not know what the social enterprise is and most important thing is they have been insisting that they do not bride officials. From early 2011, Fair Trade Laos has been evaluated the suitable methods for Lao certification body recognized by both local and international consumers and other national certification bodies as a first step for members to realize these potential advantages.

So far they have developed two kinds of certification, one is Company based (Corporate Social Responsibility), and the other one is Product based (Fair Trade). Company certification will be approved for the internal management system of the company. After passing the evaluation process, company will be granted membership of Fair Trade Laos and authorized to use Fair Trade Laos Company logo on poster, brochures, website and retail shop displays, etc.

Regarding the Product base (FT), it is for specific approved products. Members select products for submission and approval. For each selected product, the value-chain information will be provided to FTL. As mentioned above, for increasing the proportion of income Fair Trade Laos has launched a new service, which is to provide members consultancy service.

Currently, the revenue created by offering service is account for 30%, the rest part is still come from donation. For solving this problem FairTrade Laos offers advanced membership, so the local businessman may obtain the business skill that lack in Laos. However, they do have trouble on the issue of human resource and it limits their development. Because most of their

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qualified employees see FairTrade Laos as an opportunity for other better jobs, manpower is always in short.

4.1.2.3. Fruitfriends

Fruitfriends was established in 2011 by a Lao-Belgian couple Ket Vannatham and Ward Reekmans, they are both the members of the Belgian NGO LLL (Laat Laos Leren), which their goal is trying to facilitate the construction of the Primary school in Keo Kuang village. A year later of that project, they began to prepare for the construction of the Keo Kuang Secondary school. Starting these projects made Ket and Ward decide to create a locally based organization.

They found private investors to invest in a social enterprise, leading to the establishment of Fruitfriends in the end of 2012.

Fruitfriends’s revenue comes from agriculture, fair stay and donation. Profits and donation are used to establish local community projects based on education. They focus on children, teenagers, and young adults mainly because we believe that educating the local youth is the most important factor in fighting against poverty. Their overarching mission has three sub-goals:

1) Fair price for local farmers: Fruitfriends purchases as much fruit as possible directly from local farmers at market price in order to provide a better income for local farmers.

2) Creating growth and jobs: Through our business development initiatives, they strive to increase local employment, providing income that can be directed toward furthering education and improving quality of life.

3) Support education projects: Fruitfriends coordinates the projects with the guidance and assistance of local villagers. Profits from commercial activities flow back to the

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communities where we support education initiatives. Their current activity, sponsored by LLL, is the construction of a Secondary school in a remote area, which will provide Secondary education for all teenagers, particularly girls. They also assist some Primary schools with English education. Additionally, our organic farm will eventually be used as an instructional tool with local farmers on sustainable farming methods.

First of all, at the moment FruitFriends wants to organize business directly by producing fruit products to sell. Meanwhile, they already have recipes for different types of jams and knowing how to produce them. Once business is up and running they want to buy the fruit directly from the local farmers at market price so we skip a step in the supply chain and providing a better income for the local farmers. All profits will flow back to education projects which are for the children of the same farmers in our supply chain. Currently profits from our Fairstay are used to help a few schools in English education and invested some of it in their eco-garden.

It is not only about making an income. They indeed generate most income from Fairstay project now. But Fairstay would be nothing without the garden. They want to let visitors feel how people live in Laos by this garden. Most people in Laos are farmer and visitor cannot feel such experience without a garden when they are doing Fairstay. Besides, this garden need to take a while before it can actually generate income. They only started to work decently since a year before and it takes some time to transfer some kind of a jungle into a garden, especially everything was done with manual labor. The garden is not only an organic garden, but also an example for local people to learn how to grow on an organic way. After that fruit purchased will only come from farmers not using pesticides.

In fact, it is very difficult to attract customers such as hotels, guesthouses, restaurants to become a partner of value chain and serve Fruitfriends’s jam to their customers. They mentioned their productions cost is almost as high as jam imported from Thailand. It is also

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hard to explain to the local people why and what to do. They do not really understand that Fruitfriends are willing to work with them and not to use profits by themselves. Therefore they decided to keep this low-level for now and will start looking for the customers by ourselves instead of using a retailer. Once their garden is open they start selling from there. Hopefully they can get tourists starting to tell Fruitfriends’s story to their guesthouses and hotels, so they start using our jam.

For other organizations FruitFriends is tend to corporate with them. The biggest problem for FruitFriends is that they never got any funds / investor to launch our fruit-product business. They do not have any funds to invest in research but also setting-up actual business.

For Human-resources it is expensive and they only work with local staff (from Vang Vieng).

Therefore they decided to grow slowly with first establishing their garden from where they can expand until to find the gap where FruitFriends can jump to increase the profits with fruit products.

4.1.2.4. Ma Té Sai

Business of Ma Té Sai was started out of a wish to promote handicraft made by Lao artisans all around Laos, and spread the tourist dollar to less fortunate areas. It was established in 2010 by an Australian, Emi Weir, and a French woman, Clémence Pabion, its goal is to preserve authentic Lao hand-made products and offering the artisan in rural areas fair income.

With economic developing of neighboring countries, products from Northern Thailand, Vietnam and China dominate the market here, so Ma Té Sai wanted to showcase what is actually made in Laos. Because of weaving is a traditional skill for Laos women, not just a kind of souvenir for tourist. Even now they still wear the cloths they weave, and many companies

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use their traditional clothes as uniform. Besides, as a member of Fairtrade Laos and for creating a larger market for gift and household items made by people all over Laos, Ma Té Sai offers a higher and more sustainable income back to poor and vulnerable Lao artisans. Compare with other handicraft stores which also focus on tourist segment in the market, Emi hands pick items for customer for stricter quality control as their competence advantage. They hope their products can make great mementos of Laos, interesting and unique gifts, or add function and beauty to customer’s home. Many items emphasize village life, the traditions passed down over generations, and the identities of various ethnic groups in Laos. For customer’s need many have been transformed to suit more modern environment of customer, but all are made by a person who is proud and happy to share their skills and traditions.

But, in fact, the qualities of clothes found in the souvenir stores are usually poor and lack the bond with modern living because of taste. Ma Té Sai found this gap and is capable to transform these handicrafts suitable for modern living. That is just their competence advantage, and it is difficult to copy by rivals, even Ma Té Sai share the same suppliers with their rivals.

With the amount of tourists who visit Laos is getting more and more, the demand for handicrafts is also getting higher. But the issue now is the producers (weavers) do not have the sewing skills to finish products. Moreover, there is a situation common in Laos now, which is weavers and sewers usually work for different handicraft stores at the same time. It means sometimes they may face the situation that capability cannot fulfill customer’s demand. For solving this problem and sustainability issue, Emi has integrated different resources, such like ‘Cotton Project’

The purpose of Cotton Project is to let the producers have the sewing skills to finish products in the village. For example, a black cotton swing jacket will consist of naturally dyed black cotton from Nambak District, this will then be sent to Vientiane, along with an accent fabric sourced locally, and buttons hand carved by a Luang Prabang wood carver. If the

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producers have the sewing skills, it can diminish needless cost of freight to the products and losing valuable time to market. So Ma Té Sai applied funding to ECM Libra Foundation and coordinate with Houey Hong Vocational training centre for sewing training with that funding.

Training the village women to finish the products means they are able to make more income for their invested time. And increasing the range of products means they will also be able to be more competitive as the raw materials become more expensive. Designs for western taste will also keep their own traditional patterns alive, as the demand for their work can continue in a broader market. The most important thing is Ma Té Sai can fulfill customer’s requirement at the same time. However, despite they can obtain the funding from the external, but Ma Té Sai now is just only self-sustainable for their operation. The profit come from Ma Té Sai is very small. Even so Emi thinks there is an artisanal trend taking over in the west. Because she found in Australia and the US there are whole magazines devoted to this way of living. Moreover, Ma Té Sai is not just developing products purely with artisans, they can create a sustainable income for their family, and the expertise to be passed on to the next generation by this process.

For customer they will also share this connection with their artisans in Laos.