The Grameen Group and Groupe Danone entered into a joint venture agreement effective from March 2006, to form a company called Grameen Danone Foods – a social business enterprise in Bangladesh. A unique initiative joining Danone, the world’s leading company for healthy food products and Grameen Group, created by the founder of Grameen Bank, Professor Muhammad Yunus, Grameen Danone Foods will bring daily healthy nutrition to low income nutritionally deprived populations in Bangladesh and alleviate poverty through the implementation of a unique community based business model.
Grameen Danone will be highly committed to protect the environment of its communities developing solar energy and bio gas energies. It will also develop innovative and environmentally friendly packaging for its products.
The initial focus of Grameen Danone will be to launch an easily affordable dairy product to fulfill the nutritional needs of children in Bangladesh and contribute to their strong growth by bringing them the benefits of milk and micronutrients that they lack, including vitamins and minerals such as Iron, Zinc, and Calcium.
Professor Yunus and Groupe Danone Chairman Franck Riboud sign agreement as heads of Grameen Group companies and Emmanuel Faber of Danone, look on
In order to maximize the social impact, Grameen and Danone are developing low capital intensity manufacturing options and intend to reinvest the profits of Grameen Danone Foods beyond its cost of capital, in the expansion of this model throughout the country. A first factory will be built in Bogra, 230 kms north of Dhaka, and is expected to start operations by end 2006 with a plan of setting up 50 plants within the next 10 years. Several hundred livestock-farming and distribution jobs would be created in the local community as a result of this first implementation.
Professor Yunus, creator of the idea of a social business enterprise, commented “This represents a unique initiative in creating a social business enterprise, i.e. an enterprise not to maximize profit, but created with a declared mission to maximize benefits to the people served, without incurring losses. It is a small project to begin with, but contains the seed of a new breed of business which can change the economic world fundamentally. World famous Danone’s participation in it, and Danone chairman Franck Riboud’s presence in Dhaka, shows very clearly that this is not a fancy idea, but a serious business – business to make a difference in the world”
Franck Riboud, Chairman and CEO of Groupe Danone, commented: “I’m deeply convinced that our future relies on our ability to explore and invent new business models and new types of business corporations. This partnership with a company as iconic and visionary as the Grameen Bank, is for Danone a huge step in that direction and in better achieving our mission: to bring health through food to the largest number of people.”
With around 16 billion USD of total sales in 2005, Groupe Danone is the world leader in fresh dairy products and bottled water and joint world leader in the biscuits market.
Grameen Bank, around which the companies making up the Grameen Group have been created, serves 5.8 million poor borrowers with microcredit. The Grameen Group consists of the following four Grameen enterprises (1) Grameen Byabosha Bikash (2) Grameen Kalyan (3) Grameen Shakti and (4) Grameen Telecom.