Ottogi invited to meeting with chaebol, as example of ethical business

Posted on : 2017-07-24 18:14 KST Modified on : 2017-07-24 18:14 KST
Food company has won adulation from consumers for playing by the rules and hiring regular workers
Late Ottogi honorary chairman Ham Tae-hoon
Late Ottogi honorary chairman Ham Tae-hoon

President Moon Jae-in has intriguingly included Ottogi, a large company but not a chaebol, in a meeting with the managers of South Korea‘s 14 largest chaebol on July 27 and 28. Thanks to the positive example Ottogi has set by taking an ethical approach to management, it has become popular with consumers, even inspiring a recent campaign to buy the company’s products. The government seems to be offering Ottogi as a paradigm for corporate social responsibility and job creation.

“The meeting will be attended by the country’s 14 largest private companies (among those 15 largest companies is also the National Agricultural Cooperative Federation, also known as Nonghyop), the chair of the Korea Chamber of Commerce and Industry, and Ottogi, a large company that has an outstanding record of creating jobs and maintaining a symbiotic relationship with its suppliers,” said Blue House spokesperson Park Soo-hyun on July 23. “The meeting will be held over the course of two days with the participants divided into two groups in order to stimulate in-depth discussion on the topics of creating jobs and having win-win relationships with suppliers.”

Ottogi has been frequently praised by consumers and South Korean users of social media. The company has impressed consumers with its integrity and its heart-warming stories. Netizens have even given the company the portmanteau nickname of “God-togi.” Its growing popularity has increased Ottogi’s marketshare, and its stock prices are rising.

Ottogi began to attract interest shortly after company founder and honorary chairman Ham Tae-ho passed away in Sep. 2016. When Chairman Ham Yeong-jun inherited the stock from his father Ham Tae-ho, he was honest enough to pay inheritance taxes worth more than 150 billion won (US$134 million). Whereas other companies have cut corners to reduce their inheritance tax, Ottogi played by the rules.

Ottogi’s logo
Ottogi’s logo

The elder Ham’s management philosophy of not hiring irregular workers eventually came to the public’s attention. Only 36 (1.16%) of the total 3,100 employees at Ottogi are irregular workers. As news spread that even the employees sent to supermarkets to hand out free samples were regular workers, Ottogi‘s reputation as a nice company got a boost.

The company’s inconspicuous efforts to give back to society have also made a quiet impression. In Nov. 2015, the elder Ham donated 30,000 shares of Ottogi stock (worth 31.5 billion won, or US$21.8 million) to the Miral Welfare Foundation. This was a private donation made without any fanfare, but it inevitably was made public when the elder Ham reported the reduction in his stock to the Financial Supervisory Service. Since 1992, Ham had also given 4,242 children with congenital heart disease a new chance at life through the Korea Heart Foundation. The company’s good deeds with Sukbong Toast also eventually came to light. Kim Suk-bong, the president of Sukbong Toast who became famous for handing out 100 sandwiches a day to the homeless in the Mugyo neighborhood of Seoul in the early 2000s, shared in his autobiography that Ottogi had given him its sauce for free.

The consideration that the company gives to underprivileged members of society is another reason for its deification as “God-togi.” While food prices have steadily risen from last year’s influence-peddling scandal until this year, Ottogi has refused to budge. Since raising the price of ramen noodles by 100 won in 2008, Ottogi has held prices steady for 10 years. “There have been lots of reasons to raise prices, but we decided that unilaterally raising the price of food products like ramen that are directly linked to the working class‘s standard of living would put a strain on their budgets,” said Ottogoi. Last year, the company surpassed sales of 2 trillion won (US$1.78 billion) for the first time.

By Kim So-youn, staff reporter

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