CSR Contributing to the Development of SME’s in Oman

Salma & Aisha with Local Supplier

The popularity of Corporate Social Responsibility (CSR) is growing. Although traditionally it has been seen as a philanthropic practice, organisations are now understanding the value it adds to the bottom line. Some of the benefits of CSR include attracting a wider base of customers, reducing costs through waste reduction and energy conservation, and presenting a more attractive element to the marketing strategy which can appeal to potential stakeholders.

In an environment like Oman, CSR initiatives are driven by strong sociocultural factors which already promote such values. Despite the challenges, large organisations managed to introduce this new concept, which is now becoming a trending topic across the GCC. Along the way, this provided tremendous help to SME’s in terms of development and funding. This case study focuses on Salma’s Chocolates – as an example of an SME –  and the support that the enterprise was given by Omran to develop their business.

Salma and Aisha Al Harji form an aunt-and-niece team that have had several attempts at establishing their own business prior to establishing Salma’s Chocolates. Aspiring to introduce a concept that is essentially distinct from what is already offered in the Omani market, they took a step further by hiring local suppliers who can provide them with local produce that is extracted from the Sultanate’s various natural resources. As a result, they decided to merge their chocolates with Omani thyme, saffron, dates, as well as other local herbs and spices.

Reaching this goal presented two main challenges. The first one was the cost; the cost of production was very high and the profit margin was not as they expected it to be. In an effort to maximise profit, the two entrepreneurs decided to make their own chocolates to keep the number of staff small. In addition, they relocated their store and built a new workshop on their own property; both of which reduced production cost by up to 90%. As for the reduction of the cost of the product itself, they needed to find good quality raw materials. This presented the second challenge; how were they going to locate Omani farmers who will supply them with local produce?

Oman

In the meantime, Omran had already established their CSR initiative Intajee which stipulated that they connect enterprises from the hospitality sector with local farmers. Aimed at supporting smaller family-run businesses, the programme sponsored Salma’s Chocolate in order to help them locate Omani farmers who can offer cost-efficient, high quality supply that is rich in national flavours.

In order for Intajee to be able to provide Salma’s Chocolates and other companies in the hospitality sector with sustainable, high quality local supplies, the company arranged to provide training programmes to local suppliers who lacked the required means and facilities. In addition to supporting SME’s in the city, this was also aimed at empowering the local community who did not have the capacity that is required for their supply to reach beyond their own villages and who did not have the resources to package, store, or market their products.

In this training programme, participants received special lectures about the best practices in agriculture and breeding. They also received help with packaging and marketing their products. In addition, they were provided with the necessary equipment to increase their production; the poultry farmers were given the facilities that enabled them to keep their produce clean and healthy. Once successful, the outcome allowed both the companies and the local farmers to build relations from which they can gain mutual benefits. In addition, this local synergy will on the long-term largely contribute to the development of the Omani economy.

Consequently, farmers who finished this programme got introduced in a networking event organised by Intajee to companies from Muscat, including Salma’s Chocolates. Some of the suppliers that Aisha and Salma particularly liked dealing with included two elderly women who climb mountains for hours to harvest the wild thyme. After building a network of reliable suppliers, Salma’s Chocolates was successfully launched.

Salma's Chocolates

The key factor behind the success of this family-run business is the access to local farmers that Omran provided. Meanwhile, the main solution for Omran to reach its objectives was the investment in training the suppliers from the country side and introducing them to entrepreneurs from Muscat and other urban areas. The CSR initiative Intajee was crucial to the success of the local farmers in being able to contract with companies in Muscat, of the two entrepreneurs Aisha and Salma, and of Omran’s attempts in introducing sustainable, long-term development plans for the local economy. These examples work to illustrate some of the possible ways by which the sector of SME’s and family-run businesses can benefit from such initiatives while giving back to the community. Similarly, Salma and Aisha reached success and, more importantly, have set an example to many young female entrepreneurs at the beginning of their careers.