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A case study on contexts

Mahaguthi reinvest 100% of their profit into supporting their producers and communities, building capacity and new product development.

Mahaguthi are a social enterprise that was set up as a profit non-distributing company. This means they reinvest 100 per cent of their profit into supporting their producers and communities, building capacity, new product development and supply chain development (all with the goal of increasing social impact).

They produce in-house and through their extensive network of producer groups. Their product range is broad, including products made from felt, textiles and paper. Founded in 1984 by a non-profit foundation, today Mahaguthi have sales of around $1 million.

They have two shops in Nepal that help drive domestic sales, but 70 per cent of sales come from exports, predominantly to Australia, New Zealand, Japan, Korea, USA and Canada. They are also investing in new product designs, including using Dhaka fabric, and pioneering new products made from nettle fibre (Allo).

Mahaguthi employ around 100 staff and workers (the majority of whom are women) and also work with 60 different producer groups in 15 districts that provide livelihoods for around 1,100 producers (85 per cent of whom are women).

Without shareholders demanding a dividend, their board and management are able to prioritise their social mission. This allows them to commit to sourcing from communities that require additional investment and support. For instance, they worked with producers of handmade soap in Western Nepal during the Maoist conflict, an area that many businesses avoided due to higher costs and risks.

Mahaguthi have also invested into eco-friendly production, improving fabric dyeing processes, installing a water treatment system and a system to monitor water quality. All this increased costs and time, but as a mission-led enterprise, they were able to prioritise these investments.

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