In a complete reversal of disappointment, Korean conglomerate SK Group survived a business threat when the government ordered conglomerates to withdraw from the maintenance, repair, and operations (MRO) market amidst concerns that they were driving out small- and medium-sized firms, creating an increasingly conglomerate-friendly environment in an economically polarized society.
SK Group’s strategy, led by Chairman Chey Tae-won, was to convert its MRO business, named MRO Korea, into a new social enterprise called Happynarae, thus allowing SK Group to continue supplying its subsidiary businesses with office supplies and other materials.
Today, The Korea Economic Daily issued a release that SK Group’s Happynarae held a board of directors meeting and passed a proposal to create a limited liability company in Suzhou, near Shanghai, with contributed capital of 1 billion won.
The company will establish the Chinese affiliate by the end of this year and it will be the supplier for SK Group companies such as SK China, SK Hynix, and SK Innovation. There are plans to expand its customer base to include non-affiliated Korean companies and local Chinese companies.
Happynarae also received a certification as a social enterprise from the government on July 12, which requires that they hire underprivileged members of society and spend two thirds of its annual earnings on public purposes.
Senior citizens, children from single-parent families, North Korean defectors, and low-income families currently make up 10 percent of its employees.
In 2012, the company recorded annual sales revenue of 154.2 billion won, making it the biggest social enterprise in Korea.
Chairman Chey has previously shown interest in pushing for social enterprises in China. At the Boao Forum for Asia in China last year, he spoke about SK Group’s own experiences in social enterprises and proposed knowledge sharing with Chinese partners.
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