CJ CheilJedang’s Shared Value Initiative
CJ Group is a multi-industry company based in South Korea with operations in 23 countries worldwide, focusing mainly on four business areas: food and food services; biotechnology and pharmaceuticals; entertainment and media; and retail and logistics. In 2013, acknowledging the need for a new paradigm in business that integrates business efforts with social and environmental values, CJ Group established its Creating Shared Value (CSV) Management Department.
One of the projects overseen by the CSV department was developed jointly by CJ CheilJedang, a subsidiary of CJ Group, and the Korean International Corporation Agency (KOICA) in Vietnam, which was identified by CJ CheilJedang as an important strategic location while assessing the range of its supply source and consumer markets. In partnership with KOICA and with input from the ongoing Sustainable Development Goals Initiative, CJ CheilJedang identified a failing farming system as one of the factors contributing to the vicious cycle of poverty in agriculture-dependent rural areas in Vietnam. CJ CheilJedang saw an opportunity to tackle this endemic poverty by better integrating rural Vietnamese farmers into its resource supply chain mechanism.
CJ CheilJedang and KOICA developed a Shared Value strategy to improve the company’s food manufacturing and distribution activities by enhancing the capabilities of local Vietnamese farmers. CJ CheilJedang works to improve the region’s agricultural yield by sharing the latest advanced farming techniques and practices, such as sustainable seed selection, and establishing effective infrastructure, such as redesigning and recuperating the much-needed agricultural water system in the province. CJ CheilJedang is also involved in reinforcing community capabilities through support of farmer unions and microcredit, and improving living standards by renovating educational facilities and remodeling village facilities including village halls, kindergartens and primary schools. In 2015, CJ CheilJedang launched a project to install water pipes for 188 households by the end of 2015, thus ensuring that everyone in the 250-household village will have access to water.
Shared Value for Business and Society
As a major food processing company, securing a steady flow of high quality agricultural products is essential for CJ CheilJedang’s business. By contracting cultivation of key ingredients, CJ CheilJedang manages to secure a stable core production base and gain greater control of supply to reinforce quality and price competitiveness of its products. The capacity building and infrastructure development at local communities help form a positive social-business cycle and empower local farmers with improved livelihood and sustainable agriculture business models. The partnerships with local governments and businesses also enhanced CJ CheilJedang’s business knowledge, leading to valuable insights that were integrated into the company’s strategy. Through its local activities, CJ Group gains brand awareness in Vietnam, while greater local presence opens up connections and opportunities in a promising emerging market.
In the future, CJ CheilJedang will continue to explore crop species suitable for local farming conditions and develop standards and criteria for measuring the social and business impacts of its Shared Value model. The results of the pilot programme are also expected to illuminate key areas of focus for future anti-poverty initiatives in other agricultural areas of rural Vietnam.