Kuyichi International BV

Love the World

Friday 28 May 2010, by Anette Skajem Lind, Ignacio Bataller, Marc Ballera, Nicolas Selvadjian

7 inspired

a) The main facts about the activities of the company.

In the year 2000 an NGO called Solidaridad decided they wanted to introduce organic cotton in the clothing industry. They couldn?t find a single company that acceded to do so, and decided to create Kuyichi. Their main goal is to make clothes 100% sustainable and they are quite successful. This firm is conscious that the regular cotton industry causes a lot of pollution, and they wanted to make a change. This company is also aware of the social needs of the workers and people who grow the cotton and make their garments. Kuyichi is a member of Made-by which is a company that has a system called Track&Trace. Made-by traces the origin of the clothes, and certifies the commitment of the company with the people and the environment, while at the same time being commercially successful. With Track and Trace, Kuyichi is completely transparent in their operations. Made-by publishes a ?scorecard? containing the percentage of certified factories used, percentage of organic cotton, and classification of their sustainable fabrics.

In order to be ethical with their workers, Kuyichi follows these rules:
- to pay higher salaries to their harvest or production workers
- to guarantee them a minimum price for their cultivated organic cotton
- to purchase their whole cotton production

An interesting fact that signals their commitment with their workers is that 16% of Kuyichi shares are owned by their farmers and suppliers, so they can get higher profits if the company succeeds.
The ethical challenges this company is addressing.

b) The ethical challenges this company is addressing.

Since 2001 Kuyichi has developed from being a small local denim brand with just an innovative concept of fair-trade and sustainability to a lifestyle brand in 2010 which prides itself for operating with an almost 100% sustainable products. Not only does Kuyichi use existing sustainable material, but is also constantly experimenting on new sustainable concepts like recycled polyester and Tencel? and hemp. Chemicals are harmful and dangerous for the environment and people, however organic cotton is grown on chemical and pesticides free soil eliminating the dangerous chemicals from the very beginning.

c) What makes you believe this company is really ethical and why you trust it?

?Being fair, being real and inspire other to do the same. That?s our philosophy. Love the world!?
This is Kuyichi?s description of itself, and what makes them stand out from most other denim brands. There are, however, many other facts that make us believe it.

In 2000, The Dutch NGO Solidaridad started producing organic cotton in Peru in order to supply the fashion industry, and to make it more ethically and environmentally friendly. However, none of the big clothes Brands were interested in using this sustainable raw material in their production. And so, one year later, Solidaridad decided to create Kuyichi, its very own brand to use organic cotton.
Moreover, Triodos Bank has decided to finance Kuyichi. Triodos Bank is known for only financing ethical projects, and all of their potential projects go through an intense screening process. This is an evident sign of Kuyichi?s ethical business strategy. A total of 33% of Kuyichi belongs to this socially responsible bank. Triodos Bank defines Kuyichi as an ?honest? clothes producer, using ?fair trade? principles, producing products in a socially responsible manner, with respect for the social framework, environmental issues and economic context.
Furthermore, ethical consumer?s rates rank the company in a good position as an ethical company.

Finally, the company Made-by tracks and traces the origin of Kuyichi?s products. It certifies that all of their products have been manufactured in an honest way, and makes sure that they will continue to do so. The scorecards produced by Made-by is publically published, and therefore allows anyone to access them. This is a definite motivation for Kuyichi to stay ethical. If they start to vary the amount of organic cotton used, for example, the public will know.

d) The possible challenges facing the company in the future and how you think this company may improve.

The trend for sustainable material, environment care and good relation with employees is getting more and more important. Therefore, in the future, Kuyichi is likely to see competitors enter in the clothes? market made from organic cotton. As a result, profit margin would decrease, which would put Kuyichi in a bad situation. To avoid that, Kuyichi could try to diversify its products. It could for instance launch a range of T-shirts or jackets made from organic cotton as well. Since it operates only in Europe, it could also capture the North American market as a way to be actively involved in the international scene, to keep the competitors from getting a big market share, and to continue to stay one of the market leaders.

Bibliography

http://faircompanies.com/videos/view/kuyichi-first-in-organic-jeans/
http://www.triodos.com/com/who_we_finance/funds/venture_capital/195172
http://greencotton.wordpress.com/category/organic-companies/
https://cleanclothes.org/campaigns/alternative-or-ethical-clothes/107
http://www.made-by.nl/downloads/annualreport2005.pdf

Location: Netherlands

Sector: retail

Official website: http://www.kuyichi.com

Key figures:

Number of Employees ? 11-50

Countries of operations ? Netherlands, United Kingdom, Ireland, Denmark, France, Switzerland, Germany, Belgium, Austria, Sweden, Russia

Nbr. visits: 1272

Nbr. inspires: 6