Table of Contents
Page
Executive Summary 3
Background 5
Food Safety 8
Wuxi 10
LOHO Philosophy 12
Objectives and Project Scope 14
Business Model : Creation of a Unique Social Enterprise 17
Marketing Strategy 27
Quality Control Strategy 57
Supply Chain Strategy 69
Organizational Structure and Key Responsibilities 76
Pilot Investment : LOHO Wuxi Chicken 90
Unique Selling Proposition 91
Quality Control 93
Supply Chain 94
Financial Analysis 95
Sample of Profit Sharing Structure 98
Organizational Structure Options 99
Risks and Mitigation 101
Implementation 105
Conclusion 108
Appendices 110
2
Executive Summary
• Wuxi County presents tremendous opportunities with its landscape, climate, people and
high agricultural productivity culture. The farming community along with the Wuxi
government and GVB (Global Village of Beijing) are all committed to work together and
create a commercially viable social enterprise to address the food safety concerns in
China and in particular, Chongqing
• The current estimated market (1.6 million customers) for organic and safe food in
Chongqing is expected to grow at CAGR of 15% for next 5 years
• The enterprise is to be set up between private investors and as a spin off of GVB with the
Board comprising of representatives from GVB, private investors, government, LOHO
association and an independent advisor
• The social enterprise will manage quality control, supply chain, sales and marketing and
distribution whilst also managing community development activities to ensure long term
sustainability
3
Executive Summary
• A new branding and marketing strategy is recommended along with stricter production
and quality control guidelines, based on the LOHO philosophy and Wuxi culture
• Key marketing initiatives including a new logo for Wuxi products, opening up of an
exclusive organic store in Chongqing and integrated branding efforts to promote the
LOHO Wuxi brand through local media
• The LOHO Wuxi chickens are Daninghe natural free range chickens in the Wuxi county,
which is used as a pilot product to be marketed in Chongqing city. The model created is
transferable to the other Wuxi products
• The social enterprise is targeting an initial investment of 20 million RMB for the pilot
case which expects an IRR of 23% with a payback period of 2 years
• In summary, the pilot case highlights a robust and holistic business plan that addresses
food safety based on the LOHO philosophy and creates value for all stakeholders and
the local community
4
Overview
• Concerns on food safety in China
• Demand for safe food products
• Opportunity to position Wuxi as a supplier of healthy and safe food products
• Use of LOHO Philosophy as guiding principle in Wuxi’s food production
6
Concerns on Food Safety in China
Food safety is now a major concern of consumers in China
• Food safety problems range from food borne illnesses caused by pathogenic
microorganisms, chemical contaminations (e.g. pesticide residues) to the illegal use
of food additives
• Examples of recent food safety scandals are:
– Presence of Sudan Red IV in salted duck eggs (2006)
– Melamine-tainted infant milk produced by Sanlu (2008)
– Use of lean meat powder by a major meat producer, Shuanghui Company
(2011)
• The consistency of implementing the Chinese government's tougher food safety
laws continues to be a challenge, as the regulations are being implemented across
approximately 450,000 food production and processing enterprises dispersed all
over the nation
Consumers are losing faith in the safety of food products in China
7
Demand for Safe Food Products
• To seek safer food alternatives, Chinese consumers are turning to green food and
organic food products
• The organic market in China has been growing annually at a double digit rate over the
past decade1. Domestic sales of organic products is expected to be as high as USD
3.6 – 8.7 million by 20152
• Despite the growing demand, key challenges still exists in the supply of safe products
– Shortage of available green and organic food products – out of 122 million
hectares of China’s farmland, over 70% of the land has not been certified to
meet the basic pollution-free standards
– The use of fake organic certificates by unscrupulous businessmen has negatively
affected consumers’ confidence in certified products
1 US Department of Agriculture Global Agriculture Information Network (USDA GAIN) Report February 2009
2 USDA GAIN report October 2010
With the rising market demand for safe food products, a business
opportunity exists to create a brand which consumers can trust
8
Wuxi: County Background
Wuxi County is located in the northeast corner of the Chongqing municipality in China. It
is known for its picturesque landscape and rich natural resources.
Geography and Infrastructure
•Land area of approximately 4000 km2
•Bordered by Shaanxi and Hubei provinces
•Surrounded by mountains with 15 rivers that run through Wuxi
•Has four main roads to link Wuxi to Chongqing city, Shaanxi and Hubei
Demographics
•Population of 530,000 people, with 19 different ethnic groups
Economy and Natural Resources
•GDP: RMB 2.4 billion – GDP growth of 15.5%
•GDP per capita: RMB 4,445
•Major industries: agriculture, coal mining, tourism
•Has more than 3000 km2 of forests and 311 km2 of meadows
9
What Makes Wuxi Special
There are three main characteristics that makes Wuxi an ideal supplier of healthy and
safe food products and strongly supports the business opportunity proposition.
1. Clean natural environment
The terrain and pollution-free environment makes Wuxi a prime location for organic
farming
2. Natural farming
Most of crop and livestock production in Wuxi uses the natural and traditional farming
techniques. Livestock are raised in forests and are fed with corn, vegetables and other
natural foods. Many Wuxi produced crops have already been certified as either
“pollution-free” or “organic”
3. Wide altitude range
Wuxi has over 425 km2 of farmland at altitudes ranging from 150m – 2700m. The large
altitude range allows Wuxi to deliver out of season agricultural production
10
LOHO Philosophy: Background
The Life of Harmony (LOHO) vision is built on Chinese philosophy with a strong belief on
“respecting nature and cherishing everything around us; embracing the connectedness
and harmony of all things.”
Five Elements of a LOHO community
LOHO Livelihood
LOHO Governance
LOHO Wellness
LOHO Stewardship
LOHO Culture
• Emphasizes organic production and connection to local cultural identity
and revolves around the development of eco-farming, education, tourism,
arts and wellness
• Emphasizes an integrated social governance mechanism with government
providing guidance and services, social organizations providing resources
and the local community (LOHO Association) taking charge of their
initiatives
• Emphasizes the importance of a healthy lifestyle and the use of natural
remedies to stay healthy
• Emphasizes the harmonious relationship between people and the
environment and the need to take good care of environment
• Emphasizes community education and cultural activities to uplift the
spiritual life and nurture the balance of mind, spirit and body
11
LOHO – Wuxi Collaboration
Food Safety
Quality Assurance
Sustainability
Economic Development
Harmony with Nature & Environment
Leveraging on the already established eco-practices of natural farming in Wuxi county, a
new social enterprise will be set as the intermediary between the demand (consumers) &
supply (farmers)
The principles governing the enterprise shall be based on the LOHO philosophy
represented by:
The social enterprise can serve as a model for other provinces in China to adopt and
implement in the future.
12
Overall Objectives
14
• To address food safety and rural livelihood issues by building a rural development
based business model that integrates a quality assurance system, a cold chain
logistics system and a consumer market system.
• To enhance LOHO governance as the social development component of the Wuxi
government‟s 12th five year plan
• To build a LOHO philosophy incorporated food industry in Wuxi to drive local economy
• To provide a model for sustainable
food production with an emphasis
on food safety in China by developing
a business model incorporating the
LOHO philosophy and attracting
investors
Project Scope
• Build a commercial business model for a social enterprise to meet Wuxi’s social
development needs
• Propose a comprehensive marketing strategy focused on developing a trusted brand
(LOHO Wuxi) based on the principles of LOHO to create demand
• Outline strategy plans complete with financial figures for the other key areas of supply
chain, production and organizational structure
• Propose a pilot case using LOHO Wuxi chickens to show the full range of costs and
benefits
• Identify future business development
opportunities
15
Overview – Business Model
• Addressing social development needs
• Approach to social development
• LOHO philosophy as a social development model
• Value proposition
• Key partners
• Social enterprise’s business model
• Social enterprise in the value chain
• Impacts of social enterprise to community
17
Addressing social development needs
The key focus areas are:
• Improve the quality of life by increasing the rural income levels
• Reduce migration outflow by creating more job opportunities
• Improve social security benefits such as income protection and health care
• Improve rural education systems
• Enrich culture and healthy lifestyle
18
Approach to social development
Leverage the opportunity to utilize Wuxi’s unique environment for agriculture production to
meet the growing consumer demands for safe and healthy products in the surrounding
markets, thereby increasing the livelihood of the community.
The Wuxi community is able to produce
healthy and safe food products allowing
for sustainable economic growth
opportunities
However, they lack:
• Quality market demand information
• Branding and marketing strategies to be
able to demand a premium price for their
premium organic products
• Awareness of quality control procedures
• Effective and stable distribution
channels to reach the target market
• Efficient logistics system to bring the
products to market at a reasonable cost
WUXI COMMUNITY
Consumers have shown increasing
preference and demand for safe and
healthy food products, especially in light
of the numerous recent food safety
scandals in China.
However, they lack:
• Knowledge on where to buy safe and
healthy food products
• Trust in existing certifications provided
by the government and other producers
• Assurance of the consistency of food
quality and stability of the supply of safe
food products
CONSUMERS
Solution:
A social
enterprise
which will
bridge the
gap between
producers
and
consumers
19
Value Proposition
The business model leverages Wuxi’s unique heritage,
culture and environment to produce high quality products
and services that deliver health and wellness.
By adopting the LOHO philosophy and values, it creates a
brand that commands consumers’ trust and gives value
back to the community, investors and local government.
20
LOHO Philosophy as Social Development
21
The application of the LOHO philosophy to the social enterprise results in
economic development, wellness, ethics, good governance and stewardship.
CULTURE:
Rebuilding of Ethics
WELLNESS:
Healthy living
金金水水
土土
LIVELIHOOD:
Eco-industries and economic development
STEWARDSHIP:
Environmental preservation and
management
GOVERNANCE:
Integrated social governance
21
• Supply high quality products
• Participate and benefit from the social development programs
Key Partners
Government
• Provide financial and non-financial assistance to Social Enterprise and Cooperatives
GVB
• Specialize in LOHO values concept
• Advise the appropriate fund usage for social development programs
Investors
• Provide capital
• Offer management and financial decisions
• Insight into corporate governance
$$Cooperatives
• Collect farmers‟ produces
• Coordinate between farmers and Social Enterprise
Villagers Consumers
• Experience quality products and service of LOHO Wuxi brand
• Become a promoter of the LOHO
Wuxi brand CO-OP
22
Business Model
Producers(community)
Social
EnterpriseConsumers
LOHO Life ( Arts, Culture, Harmonious Living , etc)
Engage Consumer to Protect the Environment
• Ethical Production
• High Quality Products
The integration of rural and urban communities leads to economic
development, social governance, sharing of cultures, with a
harmonious relationship with the environment.
• Premium Price
• Training / Education
• Profit sharing
• Community Funding
• Insurance, Micro-finance
• Higher standard of Living
• Food safety
• Wellness Education
• Increase sales
Eco- tourism
Additional Income (Handicraft, Ederly care, etc)
LOHO Business Model = Power of Community
23
Value Chain Model
PRODUCER
COMMUNITY
PROCESSING &
DISTRIBUTION
OUTSOURCING
COMPANY
RETAILER /
WHOLESALERCONSUMER
SOCIAL
ENTERPRISE
GOVERNMENT GVB
Production,
Farming
Packaging,
Supply Chain
Activities
Distribution Activities
SELL
LOHO QCLOHO QC
RETURNED PROFIT
& COMMUNITY BENEFITS PROFIT
DISTRIBUTION
COSTS
SUPPLY CHAIN
COSTS
SOCIAL
ENTERPRISE
GOVERNMENT GVB
Consumption
LOHO QCLOHO QC
RETURNED PROFIT
& COMMUNITY BENEFITS PROFIT
DISTRIBUTION
COSTS
SUPPLY CHAIN
COSTS
ECOTOURISM
HANDICRAFT
EDUCATION
MAXIMUM TRUST /
SAFE PRODUCT
SELL
AT
PREMIUM
24Business model creates value for the community
•Organic Food
•Rebuild the ethic
•Tourism
•Elderly care
•Society issue like women and unattended children
•Sustain the culture
•Reduce the conflict with government
•Grow income
•Ownership
•Education
•Wellness
•Help to grow economics
•Monitor government
•Rebuild ethic system
•Create job opportunity
Impacts of Social Enterprise
25
Consumers
Government
Community
Producers
• Economic growth
• Build stronger
relationships with
the community
• Harmonious
society
The social development business model provides benefits
to all segments of society
• Experience
quality food
and LOHO
values
• Enhance life style
of wellness
• Contribute to the
rural communities
in China
• Higher living
standards
• Food safety
and security
• Harmony with
environment and
people
• Strengthen ethics and
culture
• Fair price on products
• Ethical production
and quality control
• Increase in income
and livelihood
opportunities
25
Overview – Marketing Strategy
There is over 7.0 million people in Chongqing city and an estimated market of
1.2 million customers who are looking for organic and safe food options. With an
effective brand and marketing strategy to build awareness, trust and loyalty, long
term sustainability of the Social Enterprise is achievable.
• Market analysis
• Branding strategy
• Marketing plan
• Future opportunities
2727
Market Analysis
• Chinese consumers increasingly pay more attention to food safety due to a
series of local scandals over the past several years.
• Organic market accounts for 0.01 % of China‟s food consumption.
• However, analysts contend that annual organic consumption growth may
reach 30 to 50 % within 10 years.
Food safety is a key concern amongst Chongqing residents. There is confusion
on food certifications and a high level of distrust on the authenticity of the
certificates. There is currently low consumption of organic food but it is
projected that there will be exponential growth in the trend to consume safe
foods.
2828
29
Customer segments
Customers of Chongqing represent Tier 2 group.
Number of cities
Median
Population
(000 & %)
GDP
(000 & %)
Tier 1 4
8,890 8,004,586
Megacities 5 22
Tier 2 17
4,190 1,756,654
Developed provincial capital cities 13 21
Tier 3
40
1,690 896,750
Developed medium-sized cities &
developing provincial cities13 29
Tier 4 90
866 186,174
Developed small cities 13 12
Tier 5 494
609 1,674
Underdeveloped small cities 56 16
Mass affluent customers and High Net Worth Individuals is 1.2M and
0.37M respectively taking up 3.7% and 0.1% of total population
Source : 2008 China City Statistical Yearbook
29
Target Customer
Most buyers of organic products are …
• Age: 28-50
• Occupation: Office worker
• Marital Status: Married
• Education: University education
• Demographic Group: Pregnant women, infants, seniors and expats
This target customers is expected to grow by 88.4% by 2015
( Source: ‟10 affluent Chinese consumption trends, Warc Ltd., March 2011 )
30
Voice of Customers
Verbatim of Chongqing City residents on food safety and organic
products are…
“I have heard about organic products but
do not know exactly what they are.
I‟m confused about the numerous
certifications in the market.”
“I have rarely buy organic products in
the market.
I just can‟t believe its quality.”
“I am willing to pay 2 - 3 times the normal
price for organic products if I can be really
assured of the product quality.”
“I don‟t even know what MSG, Coloring
and Preservatives are, not to mention the
impact of these chemicals to my health.”
( Source: Field interview, Chongqing, March 2011 )
31
Competitor Analysis
Conventional Green Imported
SourceSuppliers come from
different areas in China
Mostly come from the
areas of Tongnan,
Mianyang, and Yunnan
Japan, France and
Netherlands
Product
Type
Vegetables, fruits, herbal
and meat products
Vegetables, fruits, herbal
and meat products
Vegetables, fruits, nuts
and meat products
Target
Market
Open market, traditional
market, cantina
Supermarkets, hotels,
restaurants,
specialty stores
High - end individual
consumers, supermarkets,
imported products stores
Price
Strategy
Competitive price,
wholesale price is most
attractive to consumers.
1-3 times higher than
conventional products
7-8 times more expensive
than conventional products
Imported products command the highest price as customers trust the
certification process for foreign organic products.
( Source: Field research, Chongqing, March 2011 )
32
Price Analysis
Customers are willing to pay average 2.4 times higher price for LOHO
WUXI products, compared to conventional products if LOHO WUXI
products guarantee best organic quality.
Product Type LOHO WUXI Conventional Green Imported
Chicken 65 /kg 18/kg 66/kg NA
Mushroom (dried) 95 /kg 56/kg 90/kg NA
Potato 6 /kg 2.8/kg 5.5/kg NA
Cucumber 5.5 /kg 2.2/kg 5/kg 17.5/kg
Egg 30 /kg 16/kg 28/kg NA
( Unit: Yuan / Kg )
( Source : Market Research in Chongqing, March, 2011 )
33
The LOHO Wuxi Brand Strategy
-Build greater awareness, enhance value and sales of LOHO Wuxi’s products and
services
-To share the message of the LOHO way of life, particularly educating the communities
in Chongqing and China on food safety and wellness
-For Wuxi to be identified as the benchmark city for producing top-grade agricultural
and processed food, as well as a top travel destination blessed with natural beauty and
a long tradition of unique culture and hospitality
LOHO Wuxi Brand
LOHO Wuxi’s
agricultural &
processed
products
LOHO Wuxi’s
wellness
(eco-tourism)
LOHO Wuxi’s
culture &
handicrafts
One umbrella brand to unite and coordinate resources
to market LOHO Wuxi’s products & services
34
The LOHO Wuxi Brand What we want people to think of when they hear “LOHO Wuxi”:
LOHO Way of Life
• With the LOHO Philosophy of respecting nature and embracing the harmony of all things, the enterprise is integrated with community support to nurture wellbeing, health/wellness, education and culture to achieve a sustainable Wuxi, Chongqing and China
Pure, Untainted Environment
• Wuxi is a place of breathtaking natural beauty blessed with pristine rivers, mountains, meadows and forests untainted by heavy industries
Innovation & Quality
• While Wuxi has a long heritage of producing top-quality agriculture products, it now sets the benchmark in China with independent international food standards, in line with its core LOHO Food Principles
LOHO Wuxi delivers health and wellness. It supports fair trade for the Wuxi community.
LOHO Wuxi contributes to a sustainable Wuxi, Chongqing and China.
35
Statistics show that the people of Wuxi live longer
than most urbanized areas in China
The LOHO Wuxi Brand What we want people to think of when they hear “LOHO Wuxi”:
36
The LOHO Wuxi brand will be able to demand a premium price with the
correct positioning in the Chongqing market
Positioning in the market:
• A high-end luxury brand that guarantees healthy and safe foods
and other products
• Is environmentally friendly
• Focuses on giving back to the community and fair trade
• Produces goods in line with the LOHO Philosophy
• Target affluent individuals who are concerned about food safety
and community benefits
The LOHO Wuxi Brand Logo Concept
The LOHO Wuxi Brand logo allows our customers
to recognize the quality and standards of the products
The logo aims to include the philosophy of LOHO
and the harmony of life in Wuxi
37
The Logo incorporates the philosophy of LOHO to
all our operations, production & community spirit.
LOHO balance circle
- Philosophy values of LOHO
- Strong belief of respect for nature
- Cherish of all relationships around us
- Embrace the harmony of all things
Blue arc
- Purity of life & business practices
- Rising flow of business towards flourishing growth
Green leaves
- Evergreen business practices
- Growth (economic & social development)
LOHO WUXI Logo - Option A
The LOHO Wuxi logo builds on the social & economic development beliefs of the LOHO
philosophy. It emphasizes on pure, clean & organic business practices that governs the
behaviors, production practices & harmony for people
3838
The Logo incorporates the philosophy of LOHO &
community spirit of Wuxi county through its
simplicity and completeness
LOHO Wuxi wordings
- Philosophy values of LOHO
- Strong belief of respect for nature in Wuxi
- Cherish of all relationships around us
- Embrace the harmony of all things
Embossed blue circle
- Gives strength and sincerity to its commitment to
business quality
Circular flow
- Represents the co-related relationship between
LOHO and Wuxi community
LOHO WUXI Logo - Option B
The LOHO Wuxi logo builds on the social & economic development beliefs of the LOHO
philosophy. It emphasizes on pure, clean & organic business practices that governs the
behaviors, production practices & harmony for people
乐和
巫溪
3939
The Logo incorporates the philosophy of LOHO &
natural mountainous surroundings of Wuxi
county
LOHO balance circle
- Philosophy values of LOHO
- Strong belief of respect for nature
- Cherish of all relationships around us
- Embrace the harmony of all things
Wuxi Mountain
- Symbol of strength and everlasting sustainability of
the business
Green leaves
- Evergreen business practices
- Growth (economic & social development)
LOHO WUXI Logo - Option C
The LOHO Wuxi logo builds on the social & economic development beliefs of the LOHO
philosophy. It emphasizes on pure, clean & organic business practices that governs the
behaviors, production practices & harmony for people
4040
LOHO Wuxi Products
In the short-term and mid-term:
Easy to produce, transport, pack and store
Less technical requirements
Existing sales channel
Easy to expand market size
High profit margin
LOHO quality standards
For example:
Chicken, eggs, potato, mushroom & cucumber
LOHO Wuxi Chicken and
Eggs Existing brand and sales channel
Easier to expand market
Easy to breed
High profit margin (Chicken:65
RMB/Kg, Eggs: 28 RMB/Kg)
LOHO Potato Large amount of consumption
Easy to plant with low cost
Easy to transport, pack and store
Less requirement of technology
and quality control
In the long term (> 5 years):
More advanced processed food
Higher requirement of quality control
More investment needed
High profit margin
Expand to tourism, handicraft, education and wellness
Maintain the LOHO concept in the long term
For example:
Processed food like potato chips, sweet potato
chips, Honey Wine, herbs
LOHO Mushroom Easy to plant
Less technological
requirements and quality control
High profit margin
LOHO Cucumber Easy to plant
Productive
Less requirement of technology
and quality control
Very High profit margin
41
Pricing – LOHO Wuxi Chicken as
example
Type A: Superior LOHO Wuxi
Chicken
Price: 85 RMB/Kg
Target: Internal restaurants in the
Government and related parties
-On-call door to door delivery
-Processed chicken, ready to cook
-Priority service
-Luxurious packaging
Type B: Excellent LOHO Wuxi
Chicken
Price: 65 RMB/Kg
Target: High-end supermarket i.e.
Carrefour, Far East, high-end
restaurants, hotels, schools and e-
store
-Similar price as other existing free
ranged chicken in high-end
supermarket (66 RMB/Kg)
- Premium packaging
Type C: Good LOHO Wuxi
Chicken
Price: 35 RMB/Kg
Target: Regular consumers
concerned with food safety and
quality
- Slight premium in price vs non-
LOHO chicken in the open fair
(18-20 RMB/kg)
- Good quality LOHO Wuxi
chicken
42
Sales Distribution – Expanding from
Chongqing City to Greater China
43
High-end Hotels and Restaurants
- Large and satiable quantity of demand
- High profit margin
- Established reputation and customer base
LOHO Wuxi Theme Restaurant
- Educate the public on LOHO concept
on food, culture and wellness
- Showcase LOHO Wuxi
High-end Supermarkets
Such as Chong Ke Long, Yuan Dong
etc.
- Large number of potential customers
- Already established consumer trust
Home Delivery/ Direct Marketing
- To deliver to high-net-worth customers
- Through direct delivery, allows more
margin for farmers- Niche market
High-End Schools & Kindergartens
- Food safety is essential for children in
China
- Parents are willing to pay more for
children‟s food
Other Channels
-Major cities along the Yantze River-Neighborhood cities of Chongqing-Relying on an established logistics cold chain
Targeting markets in major
cities beyond Chongqing
- Hubei, Shaanxi, Beijing or Shanghai
Phase 1Year 1
Phase 2Year 3
Phase 3Year 5
E- business
Using established platform such as
Taobao, Alibaba; set up LOHO Online,
E-business platform of Wuxi‟s own
- Low cost, comparing to opening a
store
- Easily accessible to buyers
- Generate cash flow faster, i.e. via
Alipay
43
Sales Distribution
Wuxi Market Place 1200m² (current)
- Distribution of „good‟ grade products
- Targeting heartland consumers
- Convenient / quick purchase
- Providing LOHO WUXI quality produce to the masses
NEW Wuxi culture exhibition lifestyle Store (2012)
- Processed Products
- Agricultural Produce
- Handicraft
- Cultural exhibits
- Educating the Chong Qing Market on LOHO Wuxi philosophy
NEW Wuxi Market Place 1000m² (2012)
- Distribution of „superior & excellent‟ grade products
- Targeting higher end mass affluent customers
- Product range that matches preference, budget & desire of market
- Fulfilling the desire for premium & safe product range
- Customer indirect support for LOHO Wuxi Community
44
Promotion 360-degree promotion and communications plan
Community Education on Food Safety
Public Relations
MediaCampaigns
Point of Sale
360-degree
promotion
plan
SHORT TERM (1 Yr)
Driving awareness of food
safety and LOHO Wuxi brand
MID TERM (3 Yrs)
Driving the awareness and
sales of other LOHO - Wuxi
products and services
LONG TERM (5 Yrs)
Expand to other markets, build
LOHO Wuxi as the benchmark
for food safety & top eco-
travel destination
Reach targeted customers by selling LOHO Wuxi products and services via total customer
experience and set the market benchmark for food safety and top travel destination
45
Year 1 Promotion Plan
• Outreach program to schools and supermarkets inChongqing and Wuxi to educate the public on foodsafety, chemicals/additives and organic food
• “Read Food Label” campaign to housewives
Community Education on
Food Safety
• Work with key “influencers” such as editors, journalists,food columnists, celebrities and sports personalitieswho support LOHO to drive awareness of LOHO Wuxiand food safety through blogs, newspapers, magazineand TV programs
Public Relations
• Create a LOHO Wuxi Farm website: LOHO Wuxibackground, LOHO Wuxi Chicken story, farmers‟profile & stories, LOHO food principles and Wuxi aseco-tourism destination
• Reality program of celebrities to LOHO Wuxi
Media
4646
• Food safety education programs for the public to build the trust and credibility of LOHO Wuxi as the
leading social enterprise on food safety and wellness
• Drive brand awareness of LOHO Wuxi as a premium brand of the highest quality, targeting affluent
customers
• “Taste of Pure Nature” sales campaign targeting affluent femalesCampaign
• LOHO Wuxi promotion corner in supermarkets with LCD TV showing LOHO Wuxi story, cooking demonstration/food tasting
• Distinctive, premium packaging with QR Code (traceability)
• New chicken dishes created jointly with celebrity chefs at high-end restaurants
Point of Purchase
Year 1 Promotion Plan
4747
• Membership discounts
• Membership points
• Exclusive in-store activities
• Newsletters and mail-in promotion
Store Membership
• Co-partnership campaign i.e. co-promotion, credit card discount, etc.
• Purchase of customer database from partner companies
Partnership Programs
Customer Relationship Management
48
Customer Relationship Management (CRM): to cross-sell and up-sell through database
and analytics. Have a CRM program assists in maintaining the relationship with
customers to create continuous sales and allows for cross-selling to untapped potential
customers.
48
Loyal customer programs can be rolled out in wholly owned LOHO Wuxi stores as well as
stores that carry the LOHO Wuxi products.
Digital marketing – LOHO Wuxi website
LOHO Wuxi website content:
• Health columns: education on the LOHO
way of life and food safety
• Discussion board: 2 way communication,
interactions – create awareness
• LOHO beyond organic: build LOHO as an
icon that is higher quality than organic
• Meet the LOHO‟s: farmers‟ stories and food
life cycle – connect with readers on an
emotional level
• LOHO projects: describe the ongoing
community culture and wellness projects
and ways to get involved
49
Create an informational and interactive website to communicate what the LOHO Wuxi
brand represents – create awareness in the virtual market.
• Recipes and cooking tips: all recipes will use LOHO Wuxi products as ingredients – increase
exposure as searching for recipes is the most popular food related online activity
Website promotional strategy:
• Keep website up to date with interesting activities and information
• Drive traffic to the website:
• Search engine optimization on Baidu, Google, etc.
• Use e-newsletter to update subscribers on new articles and promotions
• Include website in all marketing materials
• Marketing with regular updates that links back to website, on social media sites
such as Sina microblog
• Require members to also sign up as subscribers to enjoy membership benefits
• Form partnership with lifestyle websites and magazines as well as volunteer
opportunity websites to place ads, links, articles, etc. to increase exposure
• Place articles and features on the Wuxi government website, as there is already a
section on promoting local industries and work towards doing the same with the
Chongqing government website
Digital marketing – LOHO Wuxi website
50
Digital marketing
• Youku Channel
– Post video clips of the LOHO way of life and advertorial information on
Wuxi county
• Blog
– Written by a public person such as celebrity chef, food critique, Sheri, etc.
– Written by consumers for more credibility
• Social Media
– Kaixin, Sina Microblog
• Others
– Place QR code on product label to link to the brand
website, nutrition facts or farm tracking
51
Marketing Strategy Plan:
Cost Estimation for Year 1-5
52
A cost estimation of the implementation of a comprehensive marketing strategy. Multiple
strategies are utilized to more effectively raise awareness.
COST CATEGORY YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
ABOVE THE LINES
TVC 2,500,000 1,500,000 1,500,000 1,500,000 1,500,000
Radio 200,000 200,000 200,000 200,000 200,000
Newspaper 270,000 220,000 220,000 220,000 220,000
Magazine 500,000 320,000 320,000 320,000 320,000
BELOW THE LINES
In-store event 687,000 984,000 984,000 984,000 984,000
Website 450,000 150,000 150,000 150,000 150,000
Billboard 0 700,000 700,000 700,000 700,000
CRM Activities 100,000 200,000 500,000 600,000 600,000
Social network 50,000 50,000 70,000 70,000 70,000
Partnership program 0 300,000 400,000 400,000 400,000
Others
Media relation 150,000 380,000 100,000 100,000 100,000
Reserved for adhocs 193,000 196,000 176,000 176,000 176,000
TOTAL MARKETING
BUDGET (RMB) 5,100,000 5,200,000 5,320,000 5,420,000 5,420,000
Future Development Opportunities
Future business development opportunities lie in the
followings:
Eco-tourism (LOHO Wuxi learning package)
Handicraft, arts & culture
Product innovation (new top-end agricultural range & processed food)
Elderly-care program in Wuxi (retirement homes)
53
54
•Wuxi, origin of Wu(巫 ) culture is home to Chinese
ancient spirit as well as pristine nature
•Three LOHO pilot villages in Wuxi offer hands-on
experience programs while living in clean, unpolluted
farmlands.
•Visitors can learn about the LOHO philosophy and the
importance of organic food
•Sister Schools between Wuxi and Chongqing
LOHO WUXI Experience
In Wuxi organic LOHO villages
Eco-Tourism
54
55
Day 1
• Education on the LOHO philosophy and experiencing
LOHO dancing and the Wu(巫) culture
• Lodging in a traditional Wuxi house
• Day 2
• Visit the Daninghe free range chicken farm
• Experience cattle milking and feeding as well as make your
own cheese
• Day 3
• Lessons on how to make Wuxi handicrafts and organic
soaps
• Organic food cooking lessons in an authentic Wuxi
countryside kitchen
Activities for 3 day experience
Eco-Tourism
55
Overview of LOHO quality control
Having a consistent and standard quality control (QC) process starting from
breeding and production to distribution helps to ensure the end product meets
the customer’s expectation in terms of food safety and quality.
• Why LOHO QC?
• Overall QC strategy of Wuxi products
• QC of Wuxi agricultural products
• LOHO QC standards
• Certification
• Roles and responsibilities in securing quality
• QC budget
57
Why LOHO quality control process?
The LOHO quality control process is the key in upholding the proposed brand and meeting
customer expectations consistently and producing high quality agricultural products.
LOHO
standards
embedded in
production
Point of Departure
(as-is)
• Many small farmers farming on their own residential land (backyard)
• Low awareness and confidence in existing agricultural products as viewed by end customers
• Lack of knowledge on issues related to farming productivity
Point of Arrival
(to-be)
• Government endorse use of forest land to increase production capacity with central planning and distributed production
• Consistent production process according to the set standards
• Meet customer expectations on safe foods
• Understand root causes of poor productivity and provide mechanism to farmers to correct it
58
Overall quality control strategy of Wuxi
products
In order to deliver brand value of Wuxi products, product quality and process need to
be aligned with LOHO values.
Plan
production
• Plan the Wuxi product
pipeline for production
• Forecast supply based
on the demand
estimation
Develop key
criteria and set
up standards
• Define key criteria to
convey LOHO values
along the production
process
• Set up minimum
requirements to meet
the criteria
Manage
production
process
• Ensure LOHO values
criteria and standards
delivered in the
production process
• Continue to improve
and innovate to meet
customer expectation
59
Overview of existing Wuxi agricultural
product process
Hatchery FarmersDistributor /
Supplier
End
customer
• Sell chicks to
farmers
• Raise chicks
in accordance
to traditional
methods
• Buys
chickens from
farmers
• Small
retailers
• Individual
customers
Traditional Method (e.g. Chicken breeding)
• Lack of consistent quality control standards
• Environmental impacts are not considered
• Limited improvement to farmers’ livelihood
60
Overview of proposed Wuxi agricultural
product process
Farmers‟ Cooperative
Liaise with farmers and negotiate with SE
Buy breeding sources from SE and sell them to
farmers
Collect matured goods from farmers for selling
to SE
Provide assistance (e.g. financial) to farmers
Social Enterprise (SE)
Central breeding facility
Sell breeding sources to famers‟ cooperatives
Quality setting (Ensure quality)
Training
FarmersEnd
Customers
• Consistent quality control standards recognized and accepted by
customers
• Improvement to farmers’ livelihood
• Environmental impact is considered and therefore the impact is lessened
61
• Sell healthy chicks (immunized)
• Buys chickens from farmers at protective price• Monitor and educate farmers to ensure standards are met• Continue to improve and optimize standards whilst keeping in mind
the impact on the environment
Social Enterprise
• Purchase authorized chicks from Social Enterprise
• Raise chickens to prescribed weight of 2 – 2.5kg
• Adhere to identified feeding conditions and feeding activities
• Prevent diseases in accordance to standards
Farmers
LOHO quality control standards
Key responsibilities of each party in adhering to the LOHO
quality control standards
62
Underlying LOHO values driving
standards
China Organic
Food
Certification
Center/ OFDC
Unlabelled
LOHO
standard
Level of
Quality Control /
Confidence
Standards encompassing LOHO values can ensure the high food quality
by adopting wholesome criteria with the integration of material and spirit.
Soil
Water
Fertilizer
Seed
Environment
Pest and
Weed Control
Packaging
养殖规程Livestock
Guidelines
1 自然Nature
7 运输Transport
6 用药Medication
5 防疫Immunization
3 适量Moderation
2 平衡Balance
10 密度Density
4 饲养Feeding
12 卫生Sanitation
11 设施Facility
9 排泄物Waste
8 情绪Emotion
Plants cultivation/
livestock production guidelines
63
Certification bodies on food quality
control standards
ECOCERT OIECOFCC OFDC
• Certified growers are in
more than 70 counties
and regions throughout
Europe, Asian, America
and Africa
• Since ‘98, has
cooperated with Beijing
Greenfield Ecological
Center and technical
support is provided by
China Agricultural
University ARI (Agro-
ecology Research
Institute)
• The World
Organization for
Animal Health
(OIE)
• Total 178 members
countries &
territories including
China
• China Organic
Food
Certification
Center (COFCC)
• Organic Food
Development
Center (OFDC)
64
Roles and responsibilities in securing
quality
Farmers’cooperatives:
Social
Enterprise :
Establishing
StandardsProduction Processing
• Set the standards
• Continuous research
to innovate
• Receive customers’feedback
• Train farmers on the
standards
• Monitor
• Document standards
and train the trainers
• Buy chicks and sell
to farmers
• N/A
Government :
• Ensure quality
• Ensure processing
facility comply with
set standards
• Provide required
support such as
liaison with external
organizations
Farmers : • Receive training • Comply with
standards
• Endorse use of
forest land
• Provide financial and
non financial support
for production
(facilities and etc)
• N/A
• Provide financial and
non financial support
for processing
(facilities and etc)
65
Cost Estimation for Year 1
Example: Potato Production
Calculations based on a production of 10,000 tons of potato per year
Cost Category Cost ItemOne
Time/RecurringUnit Cost Unit Total Cost/year
ProductionPotato Purchase
(Market Price)
Recurring;
1 batch per year1.5 per kg 15,000,000
ProductionPotato Purchase
(LOHO Premium)
Recurring;
1 batch per year0.5 per kg 5,000,000
Quality Control (incl.
Education of
farmers)
1* CTO Recurring 15,000 per month 180,000
Quality Control (incl.
Education of
farmers)
2* Technicians Recurring 2,000 per month 48,000
Feedback System e-commerce One Time 1 NA 15,000
Feedback System Hosting One Time 1 NA 6,000
Total Cost for Year 1 20,249,000
66
Cost Estimation for Year 1
Example: Chicken Production
Calculations based on a production of 50,000 chicken per year
Cost Category Cost Item One Time/Recurring Unit Cost Unit Total Cost
Land Land Lending (subsidized by gov.) - 0 NA 0
Facilities
Factory (1200m2) One Time 150 m2 180,000
Internal Equipment (1200m2) One Time 55 m2 66,000
Breeding Center (1200m2) One Time 17.3 m2 20,760
Inventory System (1200m2) One Time 10 m2 12,000
ProductionBig Chicken Purchase Recurring; 5 batches per year 70 per chicken 3,500,000
Big Chicken LOHO Premium Recurring; 5 batches per year 7 per chicken 350,000
Quality Control
1*CTO Recurring 15000 per month 180,000
2*Technicians Payroll Recurring 2000 per month 48,000
5*Workers Recurring 1000 per month 60,000
Packaging
Slaughter Fee Recurring 1 per chicken 50,000
Packaging Recurring 1 per chicken 50,000
Immunization Recurring 1 per chick 50,000
Feedback Systeme-commerce One Time 1 NA 15,000
Hosting One Time 1 NA 6,000
Utility & Others Electricity & Others Recurring 0.46 per Kilowatt 460,000
Total Cost for Year 1 5,047,760
67
Overview - Supply Chain
An integrated supply chain model is recommended to maximize the value of LOHO
Wuxi products from producers to market.
There will be two approaches for logistics based on product type: a dry chain model for
products with longer shelf life (potatoes, handicrafts etc.) to be transported through open
trucks and, a cold chain model for products with shorter shelf life (vegetables,
mushrooms, processed chicken etc.) which requires a temperature controlled
environment for transportation. These processes will be described in detail in this
section.
• Existing Supply Chain Model
• Proposed Supply Chain Model
• Budget for Proposed Supply Chain
69
70
COLLECTION
AT WUXI
TRANSPORTATION
FROM WUXI TO
CHONGQING
COLLECTION/
SLAUGHTERHOUSE
& DISTRIBUTION
IN CHONGQING
Farmers sell/deliver live
animals / vegetables to
cooperatives
Cooperatives transport live
animals / vegetables by
renting open trucks
PROCESS Cooperatives sell live animals /
vegetables to wholesaler and
return profits to farmers
- No standardized QC
- Lack of information to
match production with
demand
- Mismatch of truck capacity
vs supplied quantity
- No cold chain exists
- Highway is under
construction
ISSUES Cooperatives are unable to
capture higher value from
processing the produce therefore
cannot return as much back to
farmers.
Existing Supply Chain Model
PRODUCE ARE OWNED BY FARMER COOPERATIVES
PR
OD
UC
ER
S
MA
RK
ET
PRODUCE ARE OWNED BY
WHOLESALER
Farmer Cooperatives sell the livestock/raw products to be processed
further, giving more margins to wholesalers than farmers
COOPERATIVES CAPTURE DISTRIBUTION MARGIN WHOLESALER CAPTURES
MANUFACTURING AND
DISTRIBUTION MARGINS
70
Proposed Supply Chain Model
Social Enterprise buys
qualified produce from
cooperatives at
predetermined price
TRANSPORTATION
FROM WUXI TO
DISTRIBUTION
CENTER
DISTRIBUTION
TO
CHONGQING
MARKET
SLAUGHTER/
STORAGE
HOUSE
IN WUXI
PRICING:
• If Contract Price >
Market Price: Buy at
Contract Price
• If Contract Price ≤
Market Price: Buy at
Market Price
PR
OD
UC
ER
S
MA
RK
ET
COLLECTION/
SOURCING AT WUXI
INVENTORY MGT:
• Min. qty. per pick-up
to ensure economic
feasibility & demand-
supply matching
• FEFO/FIFO system
will be used
Packed meat is
transported via trucks
Produce is delivered to
customers via small
vans/trucks
DELIVERY POINTS
(END MARKET):
- public & private
schools
- hotels & restaurants
- supermarkets
- specialty stores
An integrated supply chain model is proposed to connect producer to
target market, therefore allowing community to reap more benefits
71
Proposed Supply Chain Model
TRANSPORTATION
FROM WUXI TO
DISTRIBUTION
CENTER
DISTRIBUTION
TO
CHONGQING
MARKET
PR
OD
UC
ER
S
MA
RK
ET
COLLECTION/
SOURCING AT WUXI
A cold chain model or dry produce chain model will be used
depending on product type
LOHO Values and Quality standards will be incorporated into every component of the supply chain
(standardized/hygienic material handling procedure)
INFORMATION SHARED ACROSS THE CHAIN:
Demand quantity
Temperature logs
Movement logs
COLD CHAIN (short shelf-life products) using refrigerated trucks & cold storage:
Chicken, pig, goat, easily perishable vegetables
DRY PRODUCE CHAIN (long shelf-life products) using ordinary trucks:
Potato, bean, rice, handicrafts, bottled honey etc.
PRODUCTS
INTEGRATION
OF LOHO
VALUES
INFO
MGT
SLAUGHTER/
STORAGE
HOUSE
IN WUXI
72
Cost Estimation for Year 1
Example: Dry Supply Chain
Calculations based on a transportation capacity of 10,000 potato per year
Cost Item Units Cost per unit Annual Cost Remark
Wuxi Storage Center
1* Inventory Manager 1 1,800 21,600 Recurring
Transportation
Transportation cost from
Wuxi to Chongqing 1 6,000 2,160,000 Recurring
Chongqing Storage
Rental fee 1 20,000 20,000 Recurring
2* Loader 1 4,800 57,600 Recurring
Chongqing Distribution
Small van service fee 5 700 1,260,000 Recurring
Total Cost for Year 1 3,519,200
COST PER KG 0.33 RMB
73
Cost Estimation for Year 1
Example: Cold Supply Chain
Calculations based on a transportation capacity of 1,600,000 chicken per year
COLD SUPPLY CHAIN Units Cost per unit Annual Cost Remark
Slaughterhouse
1* Inventory Manager 1 1,800 21,600 Recurring
Transportation
Truck 2 258,000 516,000 One time
Fuel Wuxi-Chongqing 14 154 776,160 Recurring
Fuel Chongqing-Wuxi (empty) 14 126 635,040 Recurring
Truck Drivers 1 1,100 13,200 Recurring
Chongqing Cold Storage Center
Rent 1 60,000 60,000 Recurring
1* Inventory Manager,2* Loader 4,800 57,600 Recurring
Chongqing Distribution
Small van service fee 7 700 1,764,000 Recurring
Total Cost for Year 1 3,843,600
COST PER KG 0.95 RMB
74
Overview – Organizational Structure
• Existing Framework
• Why Social Enterprise?
• Creation of the new JV Social Enterprise
• Criteria of Ideal investors
• New Concept : Impact Investment
• Proposed Ownership Structure
• Organization Chart
• Role of the Board
• Key roles and responsibilities
• Decision Making
• Talent Attraction Plan
• Organizational Budget
7676
Existing Framework:
LOHO Office and LOHO Association
77
Currently the LOHO Community Development Committee Office (CDCO) and the LOHO
Association were built to ensure that LOHO values are put into practice. However, in order to
maximize the potential of Wuxi agriculture product, a social enterprise needs to be set up so that
it can bring the products to the market and give back more benefits to the farmers.
Admin Commu
nity
Village
Supervis
ory
Publicity Commu
nication
General Office
LOHO Community Development Committee
Organization structure of LOHO office*
Governance Wellness Livelihood Stewardship Culture
Secretariat
Financial Department
President
Organization structure of LOHO association*
* LOHO office is operated under the Wuxi’s county Public Affairs department while LOHO
association operates at the grassroots level with the farmer’s association
77
Why Social Enterprise?
Definition:
A social enterprise is a business which competes to deliver products or services to the
market, but is driven by primarily social and/or environmental purposes. The profits a social
enterprise makes are primarily reinvested for the community it serves.
Goals of a social enterprise include:
- Meet the needs of the community
- Create jobs to socially vulnerable groups
- Build social capital
- develop and promote self-sustainable livelihood for the community
78
Take charge of the business operation (e.g.
quality control, sales and marketing etc.)
Responsible for the commercial success
Bring social benefits to community
Creation of JV Social Enterprise
Private Investor
Bring capital to the business
Provide know-how and management skill (e.g.
branding, sales and marketing)
Provide potential market access
GVB (New Entity) *
Provide the LOHO guidelines
Be responsible for providing the Quality Control
Framework
Leverage social resources (e.g. bring in external
partners / experts)
A commercial vehicle is needed to realize the goals of LOHO and the Wuxi Community.
The purpose of creating JV Social Enterprise is to balance the pursuit of both social
benefits and profits to the community
Social Enterprise
*Note: GVB needs to create a separate arm to be part of the owner of the social enterprise
79
Criteria of Ideal Investors
Criteria of ideal investors
• Believe in the LOHO values
• Interested in investments to create positive impact beyond financial return
• Willing to return part of the profit to local community
• Industry / background is not engaged in businesses which violates LOHO
principles (e.g. chemical factory)
• Capital is sufficient and commitment for long term investments
• Share professional expertise
Potential Investors
• Investors who are interested in “Impact Investment”
• Angel Investor
• Venture Capitalist
• High net worth Individuals
• Family owned businesses
80
Proposed Ownership Structure :
New JV Social Enterprise
82
Social Enterprise
GVB (New
Entity)Private Investor
Pros
• GVB could better control LOHO value and guarantee the
LOHO food quality
• Lower entry barrier for investors who have no experience
in agricultural sector
• Easier to attract those investors who seek for small
amount of impact investing
Cons
• GVB may not have the expertise to run the business
Option 1 – GVB as Majority Shareholder
Pros
• Investors could bring management / technical expertise to
the company
• Commitment for the investor could be more long term
Cons
• More difficult to ensure the implementation of LOHO
concept
Option 2 – GVB as Minority Shareholder
Ownership Structure
82
Organization Chart
CEO(New Hire)
Sales /
MarketingFinance
Supply Chain / Logistics
Production and Quality
ControlHR
BOARD(GVB, Investor, Government,
LOHO association, Independent Advisor)
LOHOCommunity
Sheri will be the
representative
from GVB onthe
board
Social
Enterprise
83
Role of the Board
Role of the Board:
1) Set the strategy and direction
2) Review financial results
3) Approve profit sharing scheme
4) Resolve conflicts between different stakeholders
GVB InvestorsWuxi
Government
LOHO
Association
Independent
Advisor
Provide subsidy
on land and
equipment for
this social
enterprise
Provide extra
Incentive (tax,
government
award for reco)
Provide advice
and technical
know-how
Help to promote
LOHO leveraging
his/her connection
and credibility
Potential target:
expert in
environment
protection,
principal in
vocation and
technical school
Provide the
LOHO
guidelines
Develop
business
standards
based on LOHO
values
Leverage social
resources (e.g.
bring in external
partners /
experts)
Bring capital to
the business
Provide know-
how and
management
skill (e.g.
branding, sales
and marketing)
Help the LOHO
Community
Manager to
ensure the
LOHO guideline
is well
implemented
84
Organization Structure :
Key roles and responsibilities
85
HR
Finance
Production and
Quality control
Supply Chain /
Logistics
Sales & Marketing
LOHO Community
• Chief Supply Chain Officer - manage the physical and information flow along the supply chain
in order to match supply and demand by integrating and organizing the logistics process of
collection, transportation and storage
• Marketing Manager - responsible for developing brand campaigns and marketing plans
including the company’s 4Ps marketing mix and also preparing the marketing budget and
managing and monitoring the marketing related activities. Explore and identify new market &
business opportunities by conducting marketing research and analysis.
• Sales Manager - responsible for company’s sales performance by enhancing sales volume
and monitoring sales
• Chief LOHO Officer - responsible for coordinating and working closely with the community
team to ensure the benefits are distributed to the entire community and ethical related issues
have been implemented by establishing programs and activities according to the LOHO
concept and monitoring/auditing the social environment impact
CEO• CEO - responsible for the commercial success of Social Enterprise and is the representative of
the company who will interact with the government, NGO, commercial enterprise, farmers, etc.
Will set the key strategic direction and also monitor day to day operation of the company
• Chief HR Officer - responsible for recruiting and retaining talents to run the company and
evaluate employee performances. In charge of allocating resources and outlining how
departments will interact. HR will also create a decision making process for each role.
• Chief Finance Officer - responsible for budgeting, financial reporting, profit sharing (investor,
farmer, etc), analyzing company cash flow , defining key financial metrics (ROI, IRR, etc.) and
forecasting the future scope and direction of operations in relations to the financial figures
• Chief P&Q Officer - responsible for monitoring and ensuring that the farmers produce the
product in accordance with LOHO standard. Will arrange training for the farmers by inviting
experts to increase the capability and ensure the farmers implement the knowledge in the fields
85
Decision Making:
Operational Business and LOHO
Operational Business
Governance Wellness Livelihood Stewardship Culture
LOHO Community
(Chief LOHO Officer)
BOARDCEO
HRSales /
Marketing
Supply
ChainProductionFinance
Community LOHO related issues
Note: The issues related to the operational business, those
department’s chief and/or manager will raise it directly to the CEO
and the Board (if required) to make decision
Note: The issues related to LOHO Values, the Chief LOHO Officer
(CLO) will raise them to CEO and the Board for voting. The CLO
can also go directly consult the Board on decision making matters of
LOHO’s grassroots level
Social
Enterprise
• Make decision by Voting
86
Talent Attraction Plan
Experts
Volunteers
Vocational and
Technical
School in Wuxi
• Experts who have experiences in
different areas (e.g., agriculture,
business operation etc.)
• Recruit volunteers from colleges inChongqing (especially agriculturecolleges) to do internship in Wuxiduring winter and summer holidays
Staff
• Recruit sales and marketing stafffrom Chongqing to be based inChongqing
• Recruit the back-office staff (e.g.HR, Finance, Logistics, Production)and to be based in Wuxi
• Design the program to focus on the
skills requirement for the company
(e.g. business administration, quality
control, supply chain, e-commerce)
Who are they Reasons to join
• Leverage GVB ’ s network to put
their expertise to a real impact
• Opportunity to learn about socialenterprise and rural developmentissues
• Creating a real social impact• On-the-job training
• Experienced sales and marketingstaff who buy into the LOHOphilosophy and is offered acompetitive package
• Back-office staff, target those whosehometown is Wuxi and offering thema comparable big city package
• Partnership with companies in the
value chain for high conversion rate
from internship to permanent
employment
87
Organization Strategy Plan:
Cost Estimation for Year 1
Management Positions required Estimated Costs
Title Remark Cost Item Total Cost
CEO Based in Chongqing/Wuxi Management Salaries 420,000
CFO Based in Wuxi Travel 7,200
CMO Based in Chongqing/Wuxi Office Supplies 71,000
Supply Chain Based in Wuxi Communication 6,000
Production Based in Wuxi Wuxi Office Rent 6,000
HR Based in Wuxi CQ Office Rent
0
(leverage CQ Flagstore)
LOHO Officer Based in Wuxi
Total Cost for Organizational Structure 510,200
88
Unique selling proposition – LOHO Wuxi
chickens
Free range LOHO Wuxi chicken
It is a heritage bred of top quality chicken found only at high altitudes in pristine Wuxi. It
feeds on organic corn, vegetables and insects and lives free range in the natural forest on
the highlands.
LOHO quality control
Every LOHO Wuxi chicken is raised by traditional, small scale farmers in strict accordance
with the LOHO food principles, which means its meat is of the highest quality, taste and
untainted from pollution, just like the way it was in the days of our forefathers.
LOHO way of life
When you taste a LOHO Wuxi chicken, you not only enjoy a taste of pure nature, you will
also contribute to Life in Harmony movement to build a better livelihood for the traditional
farmers.
The LOHO Wuxi chicken story:
90
LOHO Wuxi Chicken: Marketing Strategy
• Positioning
• High end chicken sold at a premium for its health benefits, organic
origins and knowing that farmers benefit directly with each
purchase
• Competitive advantage is that their chickens are raised in
accordance to the LOHO values
• The value is in the brand, the trust that will be built with the end
consumers who will be willing to pay more to obtain higher quality
meats that come from LOHO Wuxi
• There are currently four other chicken hatcheries in Wuxi as direct
competitors who sell free range chickens but are not raised in
accordance to LOHOs value and not produced under a well known
brand
92
Farmers‟ Cooperative
Manage farmers and negotiate with SE
Buy chicks from SE and sell them to farmers
Collect chickens from farmers for selling to SE
Provide assistance (e.g. financial) to farmers
Social Enterprise (SE)
Set up hatchery
Sell chicks to famers‟ cooperatives
Quality setting (Ensure quality)
Buy chickens from farmers based on agreed guide price
FarmersEnd
Customers
LOHO Wuxi Chicken: Quality Control
93
End
Market
Social
Enterprise
Farmer
Cooperative
Social Enterprise
consolidates
customer quantity orders
and plans for inventory
stocking
Cooperative sells chicken
raised through LOHO
quality standards to
Social Enterprise
Social Enterprise collects live
chicken and brings to
Wuxi slaughterhouse
Social Enterprise pays
slaughterhouse for
processing cold meat
and delivers to
Chongqing through
refrigerated trucks
Social Enterprise stores
and sorts
at Chongqing cold
storage center and
prepares for delivery
Customer makes order
to company
Customer receives
chicken
LOHO Wuxi Chicken: Supply Chain
94
LOHO Wuxi Chicken: Sales
-
500,000
1,000,000
1,500,000
2,000,000
-
50,000,000
100,000,000
150,000,000
200,000,000
QTY SALES
QTY 1,052,308 1,157,538 1,292,727 1,486,637 1,709,632
SALES 88,741,038 102,368,570 120,645,375 145,515,761 175,522,221
Yr 1 Yr2 Yr3 Yr4 Yr5
Forecast to sell 1.1 millions chickens from first year with revenues of 88.7
millions RMB with CAGR 15%
Quantity Sales
95
Revenue & Cost
-
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
140,000,000
160,000,000
180,000,000
200,000,000
RM
B (R
eve
nu
e &
Co
st)
(2,000,000)
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
RM
B (
NI)
Sales Cost Net Income
Sales 90,845,654 102,368,570 120,645,375 145,515,761 175,522,221
Cost 87,657,634 99,466,461 120,894,513 138,168,046 162,198,977
Net Income 3,188,019 2,902,109 (249,138) 7,347,715 13,323,245
Yr1 Yr2 Yr3 Yr4 Yr5
LOHO Wuxi Chicken: Revenue, Cost, Net
Profit Before Tax
3 million RMB profit from the 1st year even with a 7 RMB per chicken
premium for the farmers
96
(10,000,000)
(5,000,000)
-
5,000,000
10,000,000
15,000,000
20,000,000
Years
Free
Cas
h Fl
ow
Free Cash Flow 16,507,930 2,902,109 (6,409,227) 7,347,715 13,323,245
Y r1 Y r2 Y r3 Y r4 Y r5
LOHO Wuxi Chicken: Free Cash Flow
Expected payback in 2 years with an IRR of 23% and a NPV of 13.43
million RMB
97
Sample of Profit Sharing Structure (needs to be approved by shareholder agreement)
• Establishing a Farmer Protection Fund (FPF) to secure income stability and to
provide support for medical expenses etc.
• Sample Approach: 25% of the Profits are transferred to the FPF until the fund has
the reserves of three average monthly incomes per farmer household
• The remaining profit is distributed between Investors and a Community Development
Fund (CDF) which finances projects for community benefits.
Year 1 Year 2 Year 3 Year 4 Year 5
Net Income 3,188,019 2,902,109 (249,138) 7,347,715 13,323,245
25% Farmer Protection
Fund (FPF)797,004.87 725,527.33 - 1,836,928.66 3,330,811.13
Remaining Profit (for
Shareholders and CDF)2,391,014.60 2,176,582.00 - 5,510,785.98 9,992,433.38
Accumulated FPF Value 797,004.87 1,522,532.20 1,522,532.20 3,359,460.86 6,690,271.99
(Assumption: No payouts)
98
LOHO Wuxi Chicken: Organizational Structure Option 1 (In-House Hatchery)
Ownership
Social Enterprise
GVB (New
Enterprise)Private Investor
Majority
Shareholder
Minority
Shareholder
CEO(1)
Sales / Marketi
ng(8)
Logistics(2)
Finance
(2)
Quality Control
(1)
HR(1)
LOHOCommu
nity(1+5*)
Production(8)
Company’s ownership and organization structure model with In-House Hatchery
Organization Structure
Board
Note : the number in the bracket is the number of headcount
* Part-time staff
99
Headcount = 29
Ownership
Social Enterprise
GVB (New
Enterprise)Private Investor
Majority
Shareholder
Minority
Shareholder
CEO(1)
Sales / Marketi
ng(8)
Quality Control
(1)
Finance(2)
Logistics
(2)
HR(1)
Board
LOHOCommu
nity(1+5*)
Organization Structure
Company’s ownership and organization structure model with outsourcing
hatchery to Co-op
Note : the number in the bracket is the number of headcount
* Part-time staff
LOHO Wuxi Chicken: Organizational Structure Option 2 (No Hatchery : Outsource to Co-op)
100
Headcount = 21
Assessment of risk impact and likelihood
High Risk
Low Risk
0
1
2
3
4
5
6
7
8
9
10
0 2 4 6 8 10
Likelihoo
d (1 -
unlikely, 10 -
very
likely)
Impact Score (1 - smallest impact, 10 - biggest impact)
No slaugtherhouse (a)
No toll-free transportation (b)
Increased storage costs (c)
Decreased government support(d)
Unethical Behaviour (e)
Drop in Quality (f)
Pandemia (g)
Faking Brand (h)
Lack of Skills (i)
Farmers shift to new vendor (j)
Low Retention Rate (k)
Stakeholder Conflict (l)
102
Risk Outline & Mitigation Strategy
Specific Business Risk Mitigation Strategy
a) Slaughterhouse will not be builtTransport livestock to a slaughter house in the urban area of
Chongqing
b)Governments stops the toll-free policy for
agricultural transports
Maintaining an open communication channel with the government to be
informed about possible policy changes as early as possible
c)Fee increase for storage facility Strategic investment in one of the storage facilities
d) Decreased government support for the
LOHO philosophy
Maintaining a healthy relationship between all the stakeholders and the
government
e) Unethical behavior in the production process
that undermines the LOHO values of quality
control
External auditing of the quality control process, Non-scheduled
inspection of producers and distributors
f)Drop in product quality of agricultural
products
Education in the production process and award the qualified
communities, solid auditing system that does not accept inferior quality
g)Pandemic risk e.g.: bird flu, swine flu Establishing a broad range of products
103
Risk Outline & Mitigation Strategy
Specific Business Risk Mitigation Strategy
h) Competitors fake brand concept to sell
agricultural products
Flexible branding and advertising strategy which adopts to potential
threats and inform customers about faked products
i)Lack of professional skills and knowledge
Attracting experts who share the LOHO values and who are willing to
contribute to the project on a voluntary basis
j)Trained farmers stop following the LOHO
philosophy in order to maximize their own
benefits (free-rider)
Having contractual agreements between farmers and the LOHO
company (contract farming with fixed prices),offering income protection
through agricultural insurance, social recognition of outstanding villager
contribution according to LOHO values
k)Low retention rate, high staff turnover Recruiting candidates who are align with LOHO values
l) Conflict between stakeholders (investor,
government, GVB, farmers)
Establishing a transparent decision making process and efficient
communication between the different stakeholders
104
Month 1 - 3 Month 4 - 6 Month 7 - 12
Business Entity Set
Up
• Raise funds
• Term of agreement sign off
• Register the JV company
• Set up business infrastructure
Start operating -
Human Resources • Recruit staff
• Rental office and set up facilities
• Prepare talent and training
development plan
• Launch staff training and
retention program
Business
Development and
Marketing
• Negotiation with potential
businesses partners and clients
• Coordinate with stakeholders
(GVB & private investors)
• Launch brand awareness
campaigns
• Above the line marketing
• Leverage off sponsored
media
Production and
Quality Control
• Set up R&D facilities
• Develop quality control standard
• Purchasing contract sign off
Step 1: Quality Control Step 2: Ongoing R&D
Supply Chain and
Logistics
• Logistics outsourcing sign off
• Cold Chain facilities set up
• Expand cooperatives
network to other villages
• Identify efficient
alternatives (products to be
transported back to Wuxi)
Finance
• Set up finance infrastructure
• Accounting and financial reporting
• Financing
• Accounting and financial reporting
• Financing
• Financial monitoring
Community• Organize farmers into
cooperatives• Provide ethical and quality standard training to farmers
Short Term (Year 1) Implementation Timeline
106
Year 2 Year 3 Year 4 Year 5
New Business
Development
• Education and
up-skilling
• Handicraft
• Technical up-skilling
• Food processing
industry
• Eco-tourism
Human
Resources
• Staff training
• Staff compensation, benefits and retention program
Sales and
Marketing
• Below the line
marketing
• Multiple distribution
channels
• Below the line
marketing
• Food safety re-
education campaigns
(public)
• Below the line
marketing
• E-business
distribution channels
• Below the line marketing
Production
and QC
• Quality control
• Ongoing R&D
Supply Chain
and Logistics Adopt technology to support timely information flow
Finance
• Accounting and financial reporting
• Financing
• Financial monitoring
Community
• Set up community
fund for wellness
program
• Ongoing wellness
program
• Set up community
fund for eco-tourism
readiness
• Set up community fund
for culture and arts
enrichment
Year 2 – 5 Implementation Timeline
107
Conclusion
• The LOHO philosophy and Wuxi community should be the core of the social
enterprise to create maximum value for all stakeholders
• LOHO Wuxi brand is the most effective way to communicate and reflect the value of
Wuxi products
• Creating awareness about safe food and LOHO Wuxi culture supported by targeted
marketing initiatives will be key to generating market demand
• The establishment of the LOHO Wuxi brand must be successful prior to being able to
sell any Wuxi products at a premium
• An integrated quality control model with a streamlined supply chain should
incorporate the LOHO philosophy
• An initial capital of 20 million RMB is required, which includes 6.7 million RMB for
Capex and 13.1 million RMB for first year operational expenditures
109
Appendices
• Chongqing: Municipality Background
• Transportation System from Wuxi to Chongqing
• Marketing Calendar Planning
• Key Financial Assumptions
• Assumptions for Supply Chain Strategy Budget
• Free Cash Flow
• P&L Statement
• Future Development Opportunities
• Community Benefits Plans
110
Chongqing: Municipality Background
Chongqing is a major city in Southwest China and one of the four municipalities directly
controlled by the People’s Republic of China. It is considered as the economic center in
Upstream Yangtze area and has jurisdiction over 19 districts, 17 counties and 4
autonomous counties.
GEOGRAPHY AND INFRASTRUCTURE
– Possessing a land area of 82,300 km2
– With the biggest inland river port in Western China
– A major transportation hub in south central China
DEMOGRAPHICS
– Population of 32.8 million people
– Fourth largest migrant destination in China with a migrant population of 9 million
ECONOMY AND NATURAL RESOURCES
– GDP: RMB 509.6 billion, with GDP growth of 14.3%
– GDP per capita: RMB 18,025
– Major industries: manufacturing, agriculture
111111
112
Current Transportation Infrastructure
1. Water way (Jun-Nov):
From Wuxi to CQ: 2 days
2. Express way:
By Yunyang Road to CQ: 6-8 hrs
By Wan Zhou Road to CQ: 8-10 hrs
By Shiya Road to CQ: more than 10 hrs
3. Airport: Wanzou and Chongqing; None in Wuxi
Planned Transportation Infrastructure
1. 2012: Highway - 5 - 6hrs from Wuxi to
Chongqing
2. 2015: Airport in Wushan (next to Wuxi)
Transportation System from Wuxi to
Chongqing
Future infrastructure development will provide better accessibility to Wuxi.
112
Marketing Strategy Cost Details
114
Production Costs Ad Fees Frequency
Above the Lines Yr 1 Yr 2 Yr 3 Yr 4 Yr 5
TVC (30 sec) 500,000 500,000 per Gross Rating Point 4 2 2 2 2
Radio (30 sec) - 200,000 per wave (production included) 1 1 1 1 1
Newspaper (half pg) 20,000 50,000 per time 5 4 4 4 4
Magazine (1pg) 20,000 60,000 per time 8 5 5 5 5
Below the Lines
In-store events Fees
- own store 23,000 per time (production included)
- supermarket 80,000 per time (production included)
Website
- development 300,000 1 time
- maintenance 50,000 annually
- Internet Word of Mouth 100,000 annually (yr 2 onward)
Billboard
- production 300,000 1 time
- rental fee 400,000 3 months
CRM Activities fixed budgetannual budget for building database, customer insights, data collection, communication, customer activities
Social network fixed budget creating accounts on social networks, budget for activities such as prizes for participants
Partnership program fixed budget co-sponsor, buying lead generation
Media relations fixed budget building and maintaining relationship with the media for free advertisement/promotion such as press release, scoops, etc.
Yr. 2 is based on expectation that the transportation system will be completed. The Company may
consider taking the media to visit Wuxi.
Reserved for adhocs fixed budget Any unplanned activities
*** We also expect support from the Wuxi government. Therefore advertisement through different media maybe more frequent.
Assumptions for Supply Chain Strategy
Budget
115
Assumption
Wuxi - Chongqing distance 700 km
Average chicken weight 2.25 kg
Type of truck
Truck used for transportation of chicken & 5 year depreciation 10 ton
Truck used for transportation of potato 30 ton
One trip per day for chicken & one trip per day for potato
Trucks used for dry supply chain are rented for transportation. The cost
includes all fuel cost, driver cost, loading and unloading fee
Fuel cost for 10-ton truck
Full capacity truck 154 RMB per 100 km/ton
Empty truck 126 RMB per 100 km/ton
Transportation Capacity
Chicken 1,600,000 chickens
Potato 10,800 ton
115
Key Financial Assumptions – Chicken
Pilot Case
Key Assumption
Chongqing City Target Market for Class A & Class B 7,000,000
1st Year Penetration Forecast 1.5%
China Avg. Chicken Consumption per person per year 4.80
Class A Selling Price per KG 60 RMB
Class B Selling Price per KG 52 RMB
Class C Selling Price per KG 20 RMB
Initial Capital Requirement 20 millions RMB
Investment in additional capacity in Year 3 6.1 millions RMB
Inflation Rate 5%
Discount Rate 20%
Average Sales Growth Rate 10%
Marketing Cost 10%
LOHO Premium for farmers 7 RMB/chicken
Government Subsidy in first 2 years 2 RMB/chicken
116
Initial Capital Requirements – Chicken
Pilot Case
117
Capital Expenditure in Year 1 6,680,090
Production Facility (for 1.1 mn Chicken; 26,000 sqm)
Land Cost 26,400
Factory 3,960,063
Internal Equipment 1,452,023
Facilities 457,599
Inventory System 264,004
Total Capex Production 6,160,090
Supply Chain
Purchase of 2 Trucks 520,000
Total Capex Supply Chain 520,000
Operational Expenditure for Year 1 13,148,645
Working Capital requirements: 15% of Costs of Sales 9,246,654
Working Capital requirements: 15% of Administrative Costs 3,901,991
Total Initial Capital Requirements 19,828,735
Initial Capital Requirements Assumptions
– Chicken Pilot Case
118
Key Assumptions:
1. Constructing production facility in year 1 for 1.1 million chicken
2. Purchasing 2 trucks in year 1
3. 15% of Cost of Goods Sold and 15% of Administrative Costs are needed as capital to
finance these costs over the year
4. Marketing Cost (included in Administrative Costs) are in Year 1 10% of the revenues
Background Assumption for production facility
Plant & Equipment for 1000 sqm (41666 chicks)
Factory 150,000
Internal Equipment 55,000
Facilities 17,333
Inventory System 10,000
Chick Capacity 41,666
Building Area 1,000
RMB Projected Projected Projected Projected Projected
Organic Case Yr1 Yr2 Yr3 Yr4 Yr5
Revenue
Chickens 86,425,962 99,821,986 117,801,375 142,245,160 171,761,031
Chicks 2,315,077 2,546,585 2,844,000 3,270,600 3,761,190
Government Subsidy 2,104,615 2,315,077
Sales 90,845,654 102,368,570 120,645,375 145,515,761 175,522,221
Fixed cost
Marketing 9,084,565 10,236,857 10,858,084 11,641,261 14,041,778
Maintainance 26,000 26,000 26,000 26,000 26,000
Online Platform 21,000 10,000 10,000 10,000 10,000
Storage Rental 70,000 77,000 84,700 88,935 93,382
Office Equipment 126,000 - - - -
Office Rental 73,000 80,300 88,330 97,163 102,021
R&D 1,019,045 1,175,896 1,418,630 1,747,317 2,198,286
Total Fixed Cost 10,419,610 11,606,054 12,485,744 13,610,676 16,471,467
119
P&L Statement – Chicken Pilot Case
Variable cost
Cost of Sales 57,724,269 66,671,531 76,672,261 89,848,706 107,347,468
Processing Cost 3,920,089 4,471,996 5,275,494 6,341,366 7,772,948
Labor Cost 1,148,404 1,182,784 1,520,808 1,560,969 1,614,693
Transportation 2,291,068 2,772,192 3,506,823 4,301,276 5,362,096
Utiliy 8,106,138 8,511,445 14,292,613 15,007,244 15,757,606
Others 4,048,056 4,250,459 7,140,771 7,497,809 7,872,700
Total Variable Cost 77,238,024 87,860,407 108,408,769 124,557,370 145,727,510
Cost 87,657,634 99,466,461 120,894,513 138,168,046 162,198,977
Depreciation 534,666 534,666 777,945 777,945 777,945
Taxable Income (Loss)
Tax
Net Income 3,188,019 2,902,109 (249,138) 7,347,715 13,323,245
120
P&L Statement – Chicken Pilot Case
Free Cash Flow – Chicken Pilot Case
Projected Projected Projected Projected Projected
Organic Case Yr1 Yr2 Yr3 Yr4 Yr5
RMB RMB RMB RMB RMB
Revenue
Sales 90,845,654 102,368,570 120,645,375 145,515,761 175,522,221
Equity Financing 20,000,000
Total Revenue 110,845,654 102,368,570 120,645,375 145,515,761 175,522,221
Expenses
Production Plant 6,160,090 - 6,160,090 - -
Cost of Sales 61,644,359 71,143,527 81,947,754 96,190,073 115,120,416
Administrative Cost 26,013,276 28,322,933 38,946,758 41,977,973 47,078,561
Asset Purchased 520,000 - - - -
Total Expenses 94,337,724 99,466,461 127,054,603 138,168,046 162,198,977
Net 16,507,930 2,902,109 (6,409,227) 7,347,715 13,323,245
121
122
• Imsil, Southern part of Korea, a town famous for being
Korea‟s first cheese-making village
• It offers hands-on experience programs while living in a
clean and unpolluted farming area of the country
• The village is attracting the urban visitors who are
interested in experiencing rural life
• Good family outing with parents and young children for
educational purposes
Imsil Cheese Village in Korea
Village Experiences, Sightseeing and Plantations
Future Development Opportunities- Korean Case Study
122
123
Day 1
- Organic meals provided with handmade cheese
- Rice planting, goat feeding, and cheese making
- One night stay in the village lodging
Day 2
- Hiking trail, strolling in the village
- Cattle milking and feeding, rice milling
- Tractor riding, farm visiting and organic soap making
Activities for 2 day experience
Future Development Opportunities-Korean Case Study
123
Program:
Objective:
Recommendation:
Organize Farmers into Cooperatives
• Setup LOHO Community Department within the Enterprise
• Chief LOHO Officer to coordinate with government to build Farmer’s Co-operatives to
serve as distribution platform, middle man of farmers to social enterprise
• Coordinate with the cooperatives to provide sources for breeding (e.g., chicks, potato
seeds, etc.) according to LOHO quality standard to farmers
• In the future, farmer’s cooperative can serve as platform for micro-credit, micro-
insurance/income protection
To enable farmers to sell their farming products to marketplace at fair
price
Community Benefits Plan
124
Program:
Objective:
Recommendation:
Provide Ethical & Quality Standard Training to Farmers
• Training Model
• Appoint and engage related persons (e.g., Chief LOHO Officer, Quality Control Expert,
Farmers’ Representative) to prepare the training program by villages, by products.
Training subjects prioritized for the most economically affected products first)
• Farmers’ representative to recruit farmers to the training
To ensure farmers’ awareness of the ethical & quality standard issue,
and know how to comply with the enterprise’s quality control to be able
to sell their products at premium price to the high net-worth market
Enterprise Community / Co-Op
LOHO School Villagers
Quality
Control
Expert
Chief
LOHO
Officer
Represe
-ntative
Trainers Farmers
Production
Standard On-site field
training
Cc-ordination
Community Benefits Plan
125
Program:
Objective:
Recommendation:
Setup Community fund for Wellness Program
• Provide Training for the Awareness of “LOHO” health regimen for the villagers– The importance of food security
– Basic health and hygiene requirements
– Proper daily diet and exercise program for wellness of the villagers
– Regular exercise regimen for the villagers and for children in schools
– Coordinate with government to train the local paramedics to handle health contingencies
• Provide fund to setup the Village’s LOHO Center– Child care for migrant workers
– Health & Social services for women
– Elderly care by community
To ensure the wellness of the community, and holistic healthcare system is
applied in the community.
Community Benefits Plan
126
Program:
Objective:
Recommendation:
Setup Community fund for Eco-Tourism Readiness
• LOHO Department to run ‘ Wuxi LOHO Experience ’ sub program, to engage
representatives (e.g., senior villagers who would take responsibility), and to provide
training on the awareness of the eco-tourism opportunity to the villagers
• LOHO Department to work with the villagers to define which local product (e.g.,
handicraft) will be used to represent each village to attract tourists, and run the program
to pilot the first lot of production
• LOHO Department to run the sub program to promote Harmony with Nature Living
– Clean County Program (e.g., awards for every villages that keep environment clean up to the set
minimum standard)
– Free of Industry Pollution / Resource Recycling (e.g., provide training programs on how to use
recycled methane instead of non-bio gas consumption, organic fertilizer to reduce pollution)
To enable the eco-environment living in the community, and create
additional attraction drivers for Eco-Tourism.
Community Benefits Plan
127
Program:
Objective:
Recommendation:
Setup Community fund for Culture & Arts Enrichment
To enrich the heritage, culture & arts to make villagers’ life more colorful
• Provide funding and coordinate with the villagers to setup the social schools to create
an integrated “Social Curriculum” for the villagers.– Organize weekend training module for children for extracurricular activities e.g. painting,
performance, sports, handicrafts, gardening, other social activities.
– Train the villagers for handicraft manufacturing to propagate the Wuxi and LOHO culture and
heritage to the consumers.
Community Benefits Plan
128