It’s true…the NTUC social enterprises do not make money…
When the National Trades Union Congress (NTUC) launched its first social enterprise, NTUC Income in 1970, its aim has always been to provide affordable insurance to workers. Since then, it has introduced more social enterprises to provide Singaporeans with affordable products and services.
But if you always had the thought that the social enterprises such as NTUC FairPrice supermarkets, NTUC Income Insurance, NTUC Health Unity Pharmacies etc. are out to make money, here’s why you are wrong: Unlike commercial entities, NTUC social enterprises are not driven by profits for shareholders. In fact, the social enterprises are willing and prepared to accept lower profit margins so as to empower Singaporeans to afford essentials and stretch their dollar.
Here are 4 quotes that prove the point to you:
“We squeeze our margins, we work hard, and we make sure that we have as little profit as possible. When we have profits, we will always plough back to expand the services of NTUC social enterprises, be it FairPrice, Foodfare, Income, Healthcare and so forth.”
– NTUC Secretary General Chan Chun Sing
“NTUC set up co-operatives. The first was NTUC Income, offering low-income workers affordable insurance coverage. Then NTUC Comfort, enabling unlicensed taxi drivers to become owners of taxis and get a decent living…Because they were co-operatives, their prices were lower than that of ordinary businesses, and helped workers save money.”
– The Late Mr Lee Kuan Yew
“The Social Enterprises need to Do Well, that is, to be profitable in order to reinvest to improve quality and reach more customers. However, we do not seek to maximise profits or shareholders’ returns. This is the reason why we are able to deliver social impact through our affordable pricing strategy…The NTUC Group of SEs aims to enable access to affordable quality products and services that stretch dollar, time and employability of working people.”
– NTUC Enterprise Chairman Lim Boon Heng
“…The reason why FairPrice is doing this is because of our Labour Movement DNA. We are not in the business of making money; we are in the business of creating social impact…”
– Minister for Manpower Lim Swee Say
While the NTUC Social Enterprises profit from the running of their business, these profits get channeled back in to the businesses to create greater value for their customers.