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Social Business Model - Investors Required
Category: Social Development | By CMC-2011, 2-Jun-2011 | Viewed 3086  Comments 0
A Brazilian community school — Ramacrisna Mission (http://www.ramacrisna.org.br/) has been producing galvanized steel wire fence in a facility that is too small and they wish to expand their plant size. The interesting proposition is that they can repay the cost of the proposed plant expansion from increased revenues. This opportunity is to sponsor a profitable project that uses the emerging Social Business model. Location of the school is  in the impoverished area (Betim) of a developing country Brazil. It will bring skill training and jobs to the local population and is an excellent way to show Corporate Social Responsibility.

Project title: self-sustainability

Venue: mission ramacrisna, city of betim, minas gerais, Brazil

Time duration of project: with funding in place, Construction will be completed in five months

Focus of activity: children, adolescents and families

Direct benefactors: 3,000 people of all ages per year in the Betim and surrounding communities

Sustainability strategy of the institution
Ramacrisna's goal of self sufficiency is a great advantage over other not for profit organizations found in Brazil. Production at the school (which was founded in 1975) accounts for about 30% of the basic costs of social projects. Although the achievements in this regard have been significant, they are not sufficient to maintain the production. Problems limiting the growth in production include the fluctuation in financing and occasionally the lack of financiers which creates a climate of uncertainty. This affects the lives of literally thousands of people served by the institution.

Analysis - the Need the Problems and the Potential.

Self Sufficiency - Given this need of the Mission Ramacrisna to provide for a variety of employment and education opportunities in the community and the problems of the flow of capital, it is essential to turn to a profitable component of the Mission to seek to maximize profits - in the Fencing division.

Problem - There is an inconsistency of fundraising both internally within the Mission (local fundraising and employee participation) and externally through partners.

Potential - At higher levels of Fencing production, there would be growth in profits which could be used to finance (mortgage) an expansion in the manufacturing shop area.

Background - The Galvanized Wire Screen Fencing division was erected at Ramacrisna in 1994. While it has reached a significant portion of its potential Request for Funding Sponsorship - Fencing Division - Dec. 2010 market at about 40%, this is less than the Mission's full market share. Based on the increase of annual sales, there is room in this market sector to grow profitably.

Sales Outlet - A retail outlet is located downtown in the City of Belo Horizonte, population 2.4 million, which is in turn part of an economic metropolitan area containing a population of nearly double this number.

Shop Size - The fencing production is constrained due to a small shop of 300 square meters when a shop area of 2.5 times this size is more appropriate.

Alignment Advantage - One of the features of Ramacrisna Fencing is the use of the highest quality wire from one of Brazil's largest galvanized wire manufacturing companies ArcelorMittal Brasil SA formerly known as Arcelor Brasil Companhia Siderurgica Belgo Mineria with whom Ramacrisna Fencing has a linked brand name.

Growth Indicators - Ramacrisna is often consulted about providing larger Fencing orders but these inquiries must be turned away due to the lack of production capability. A secondary growth indicator is the rate of increase in the amount of money being returned to the Community and used in social and educational activities undertaken by Ramacrisna. The rate of growth in the funds returned to the community has been growing (9% to 13%) partially due to the dilution of fixed costs. It is noteworthy that the Ramacrisna's Fencing division return of funds to the community is typically in excess of Brazil's rate of inflation. A ceiling in growth occurred in 2008 - 2009 when the physical space imposed an unyielding constraint on Fencing production.

Summary of Facts - A combination of these factors, quality, longevity and the Institutional nature of production, has resulted in a history of sales growth.

Evolution of Ramacrisna Fencing Revenues

Evolution of Ramacrisna Fencing Revenues
Evolution of Ramacrisna Fencing Revenues


Increase the production of galvanized wire mesh (Fencing), aiming at increasing resources for social and educational activities undertaken by Ramacrisna thus improving the quality of services and number of public affected.


Expand the size of the plant facilities for the Mission Ramacrisna Wire Fencing.


The current factory space is 300 m2 and has become insufficient for the demands of production. Due to space constrictions it is virtually impossible to have a prompt delivery of even the smallest order of wire fencing. Going further, in this very busy space there are areas of raw material, finished production inventory and the actual manufacturing process which tend to blend together. There is also a small sales office, cloakroom and toilets.

Employees work with discomfort, hampered by the small shop area especially at times of measurement of screen, working around the stock of orders for customer delivery.

All these factors limit the growth of the Fencing production and consequently restrict the expansion of social activities and number of people who could benefit from actions in education, art, culture, professional training and integration into the labor market.

It is necessary to expand the shop area by 430 square meters, totaling 730 square meters, which will be used mainly for the production area, but also expanded, storeroom, cloakroom. and sales office.

Runtime Construction: 5 months

Total amount requested: U.S. $ 200,000.00

The cost per square meter will be $ 470.00.

The new building will cover a larger area for Fencing production and local customer service with an area for loading and unloading. It will be able to receive larger trucks. By leveling an area of sloping ground and expanding the warehouse, there will be additional space for staff in the form of a dressing room.


In Fencing production, for a period of five years, there will be an increase in production of 30% in the first year plus an increase of 15% in each of the subsequent four years. This is to occur while transferring resources for social projects at the same rate.

Strengths of Mission Ramacrisna

We can guarantee that in the production of Fencing (screens), Mission Ramacrisna has extensive production experience. There are 33 years of tradition and a Brand name known and respected in the market, with a loyal clientele. Ramacrisna is regularly consulted for Fencing price quotes.

Research conducted by students of the Catholic University of Minas Gerais, amongst customers in the metropolitan region of Belo Horizonte, indicated that when asked about wire fencing, 61.58% of the respondents had the Brand name of Ramacrisna come to mind first.

Two prime considerations in the funding of the Ramacrisna Fencing plant expansion are the existence of Fencing production machinery and secondly the customer loyalty to the Ramacrisna Brand - something of value that has come about by sizable marketing efforts.

October 2010
Américo Neto Amarante
31-3596-2828 - 9970-0621
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